What Is The Subscription Economy? And How Does It Involve Cloud & SaaS Businesses? Days Sales Outstanding (DSO) Definition. Due to the high importance of cash in running a business, it is in a company's best interest to collect outstanding receivables as quickly as possible.
By quickly turning sales into cash, a company has the chance to put the cash to use again - ideally, to reinvest and make more sales. The DSO can be used to determine whether a company is trying to disguise weak sales, or is generally being ineffective at bringing money in. For most businesses, DSO is looked at either quarterly or annually. For more on DSO and how to lower it, read Understanding The Cash Conversion Cycle and Speed Up Receivables To Avoid A Cash Crunch. 10 Reasons for Entering the Subscription Economy. By: James Gagliardi, Vice President, Product and Innovation A recent Gartner Inc. research report issued a strong recommendation for businesses selling online: If you don’t offer subscription plans already, you need to make this popular offering a top priority.
The report, “Building a Strategy for the Subscription Economy,” makes a compelling case for why every digital and media content business – and even some high tech and life sciences companies – should add subscriptions to their online strategies. On-Demand Demand Consumers can’t seem to get enough of on-demand content. Subscription business model. The subscription business model is a business model where a customer must pay a subscription price to have access to the product/service.
The model was pioneered by magazines and newspapers, but is now used by many businesses and websites. Membership fees to some types of organizations, such as trade unions, are also known as subscriptions. Industries that use this model include mail order book sales clubs and music sales clubs, cable television, satellite television providers with pay-TV channels, satellite radio, telephone companies, cell phone companies, internet providers, software providers, business solutions providers, financial services firms, fitness clubs, and pharmaceuticals, as well as the traditional newspapers, magazines and academic journals.