Days sales outstanding
The average number of days it takes the agency to get paid after invoicing — a direct measure of cash-flow health.
DSO is the gap between "the work is done and invoiced" and "the money is in the bank". An agency with a 90-day DSO has roughly three months of revenue locked in customer accounting departments at any given time — a quiet, expensive form of free credit.
For agencies, DSO under 30 days is excellent, 30–45 typical, and over 60 a sign of structural trouble. The causes are mostly operational: late milestone sign-offs, missing PO numbers, invoices sent to the wrong contact. Each one is fixable; together they decide whether payroll is comfortable or stressful.
DSO does not improve by accident. Standardise invoice timing, automate reminders, and make collections somebody actual job — not a thing the finance lead does between other priorities. The cheapest financing an agency can find is its own clients paying on time.