How Disputes Inflate DSO
Consider two invoices for the same amount:
- Invoice A (not disputed): Sent Day 1 → Paid Day 45 = 45 DSO
- Invoice B (disputed): Sent Day 1 → Questioned Day 30 → Back-and-forth → Paid Day 90 = 90 DSO
If 15% of your invoices are disputed, your blended DSO increases significantly. That's cash sitting in accounts receivable instead of in your bank account.
The Cash Flow Ripple Effect
Slower payments create cascading problems:
- Payroll pressure: You need cash to pay contractors, but it's stuck waiting for client approval
- Credit line usage: Higher DSO means more borrowing at 8-15% interest
- Missed opportunities: Cash tied up in AR can't be invested in growth
- Supplier relationships: Slow inflows lead to slow outflows to your vendors
How Visual Proof Accelerates Payment
With Visual Timesheets, invoice approval becomes straightforward:
- Invoice arrives with visual timesheet report attached
- AP reviewer sees screenshot documentation for all hours
- No questions needed — proof is right there
- Approval granted — often same day as review
Result: Invoices that would have been disputed move through approval as quickly as undisputed ones.
Industry DSO Benchmarks
Here's how DSO typically looks across industries:
- Staffing agencies: 45-60 days (65-90 with frequent disputes)
- BPOs: 45-75 days (can exceed 90 with offshore billing)
- MSPs: 30-45 days (60+ with scope disputes)
With visual proof, companies typically see DSO improvements of 15-30 days.
Action Steps
- Calculate your current DSO — including the impact of disputes
- Identify high-dispute clients — these are dragging your DSO up
- Implement visual proof — Start with Visual Timesheets
- Track improvement — Monitor DSO monthly to see the impact