Reverse synergy in AR ·
What the acquisition will likely look like in AR

Peak cash stuck across both books
Year-one P&L leakage

Assumptions

The deal
Sets the industry average DSO the rest of the model is built from. Ten groups covering PE-backed mid-market B2B.
Estimated from public data. Replace with the real figure if you have it.
Used to weight the combined DSO line.
Receivables today
Days of revenue sitting in receivables. Benchmark by industry from D&B / CRF, Hackett and trade payment surveys; resets when the industry changes, drag it if you know better.
Serial acquirers run above industry DSO: every prior add-on left behind a legacy remit-to, a half-migrated customer base and an exception in the workflow.
A smaller business with less bargaining power and a thinner back office usually collects slower than the platform buying it.
Where the combined book settles once integrated: the revenue-weighted average of the two starting DSOs, improved by this much through scale and shared process.
The integration
Months both AR teams and both systems run in parallel.
New entity on invoices, new remit-to, customers re-onboarding the vendor in their AP system (30 to 60 days at larger buyers). Every invoice issued in that window stalls.
The chaos is not one-sided: the acquirer's own team is pulled onto the integration, so its book slips too, less than the target's.
Once the window closes both books glide smoothly to the combined DSO: operations migrate first, contract terms only at renewal.
Share of window revenue that is never collected: small balances abandoned in the handoff, old-entity invoices never re-issued, disputes lost between teams.
Team and capital
Double-touching accounts and reconciling across two ERPs with no single aging.
Sponsor's blended cost on cash stuck in working capital.
Only used to express leakage as a share of year-one EBITDA.

Where the money goes

Three views of the same model.

DSO after close: target, acquirer and the combined book

TargetAcquirerCombined (revenue-weighted)Combined without Daylit
Target DSO by month after close
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Year-one leakage by source

Without DaylitWith Daylit
Year-one leakage by source
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How wide the range is

Each dot is one combination of drift, bad debt and window length. The large dot is the scenario above.

Without DaylitWith Daylit
Peak cash trapped versus year-one leakage across assumption combinations
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With Daylit

Switch on to see the same acquisition when Daylit runs collections across both books from day one: a shorter window, less drift, the DSO premium reversed, and the duplicated AR work absorbed.

Synergy captured in year one
leakage avoided plus savings
Cash released vs. without Daylit
AR headcount absorbed
What Daylit changes
One collections workflow across both entities from close, so the parallel-run period is the migration itself.
Customers are walked through the entity change by the agent, invoice by invoice, instead of discovering it when a payment bounces.
One collections workflow across both books from close, so the target's customers are on the new process in months, not at contract renewal.
Where the combined book settles with Daylit working both sides: this far below the industry average DSO, regardless of where either company started.
Nothing ages out unchased: every open balance on both books is worked on schedule.
Share of the target's AR headcount whose work the agent takes on after the window.
One worklist across both ERPs, so the team is not reconciling two agings by hand.

Estimates built from public data and the assumptions above. Industry DSO benchmarks are compiled from Dun & Bradstreet / Credit Research Foundation receivables surveys, the Hackett Group 2025 Working Capital Survey, and construction and legal payment studies, adjusted for mid-market B2B. Cash and financing are measured against each book's starting DSO, month by month, across both the target and the acquirer.