Reference: Collections Dashboard Metrics Calculations
Workday delivers several collections metrics. Workday performs all calculations only for open invoices as of the schedule run date.
Average Days Late Metrics
To understand how Workday calculates the average days late, consider this scenario for 4 past due customer invoices:
Invoice Number | Past Due Invoice Amount | Days Late | Weighted Invoice Amount | |
|---|---|---|---|---|
#1 | $350 | 30 | 350 × 30 = $10,500 | |
#2 | $5,000 | 25 | 5000 × 25 = $125,000 | |
#3 | $200 | 15 | 200 × 15 = $3,000 | |
#4 | $600 | 10 | 600 × 10 = $6,000 | |
Sum
| 4 invoices | $6,150
| 80 days late
| $144,500
|
Workday includes only those invoices paid in full and when the paid date isn't null. Workday determines average days late using these calculations:
Metrics | Formula | Description | Scenario |
|---|---|---|---|
Average Days Late (ADL)
| Sum (days late) ÷ number of invoices paid late | Days late are the number of days between the invoice due date and the invoice paid date.
This value is an important indicator of your collections performance and can help you identify the customers that are taking longer to make payments. | 80 ÷ 4 = 20 ADL
Your customers are paying you 20 days late on an average. |
Weighted Average Days Late (WADL)
| Sum (Each invoice amount × Days late) ÷ Sum (Past due invoice amount) | It's the average number of days for invoices paid late, weighted by the total amount due.
Use this value when you want to assess delinquent customers with large invoice amounts. | $144,500 ÷ $6,150 = 23 WADL
Customers are paying you 23 days late on an average. |
Days Sales Outstanding (DSO) Metrics
DSO helps you determine the number of days that it takes on average to collect payments from credit sales during a specific time period. Use this measure to assess your cash flow for that period and identify collection issues. In these examples, you have an AR balance of $75,000 and credit sales revenue of $100,000.
Workday uses these calculations for DSO metrics:
Metrics | Formula | Description | Example |
|---|---|---|---|
Days Sales Outstanding (30 Days)
| (Sum of open Account Receivables (AR) amount) ÷ (Credit sales revenue in last 30 days) × 30 | Workday considers invoices that have an invoice date in the last 30 days from your last run date. | (75,000 ÷ 100,000) × 30 = 22.5
Your AR balance is 75 percent of the revenue. In the last 30 days, you take on average 23 days to collect payment after making a sale. |
Days Sales Outstanding (60 Days)
| (Sum of open Account Receivables (AR) amount) ÷ (Credit sales revenue in last 60 days) × 60 | Workday considers invoices that have an invoice date in the last 60 days from the last run date. | (75,000 ÷ 100,000) × 60 = 45
In the last 60 days, you take on average 45 days to collect payment after making a sale. |
Days Sales Outstanding (90 Days)
| (Sum of open Account Receivables (AR) amount) ÷ (Credit sales revenue in last 90 days) × 90 | Workday considers invoices that have an invoice date in the last 90 days from the last run date. | (75,000 ÷ 100,000) × 90 = 68
In the last 90 days, you take on average 68 days to collect payment after making a sale. |