AVERAGE DAYS DELINQUENT (ADD): 
Online ADD Ratio Calculator
Average Days Delinquent (ADD) is a measure of the average number of days that it takes for an Invoice to get paid.
It is one of the collection metrics that measures collection effort and effectiveness.
Formula:
ADD = Regular DSO – Best Possible DSO
Where DSO stands for 'Days Sales Outstanding'
Since the formulas for ADD & DSO have common elements, if one increases the other one should also increase and vice versa.
Your collection efforts will impact both measures favourably or unfavourably
Example:
First the Formulas:
Average Days Delinquent = Regular DSO – Best Possible DSO
Where:
Regular DSO (DSO) = (Total Accounts Receivables/Total Credit Sales) x Number of Days in the period that is being analyzed
Best Possible DSO = (Current Receivables/Total Credit Sales) x Number of Days in the period that is being analyzed
Data:
Total Accounts Receivable = $15,000
Current Accouts Receivable = $4,000
Credit Sales made in a 30 days period = $10,000
First Calculate the Regular DSO:
Regular DSO or (DSO) = (Total Accounts Receivables/Total Credit Sales) x Number of Days in the period that is being analyzed
Regular DSO = (15,000/10,000) x 30
Regular DSO = 45 Days
Then Calculate 'Best Possible DSO':
Best Possible DSO = (Current Receivables/Total Credit Sales) x Number of Days in the period that is being analyzed
Best Possible DSO = (4,000/10,000) x 30
Best Possible DSO = 12 Days
Now Calculate Average Days Delinquent (ADD)
Average Days Delinquent = Regular DSO – Best Possible DSO
ADD = 45 - 12
ADD = 33 Days