Suppose your coffee shop also supplies offices on credit, and they owe you $50,000. Experience says some will not pay, so accounting makes you set aside a cushion in advance: you estimate, say, $5,000 will never arrive, and book that $5,000 as an expense now, before anyone actually defaults. That cushion is a reserve (the "allowance" met in the DSO entry).
The game: the cushion is an estimate, and estimates can be revised. If next year you declare "actually, my customers are more reliable than I thought, $2,000 is enough," the $3,000 difference flows back through the income statement as profit. Nothing was sold, no coffee was made, profit appeared from re-guessing a guess. Estimate pessimistically in fat years, release the excess in lean ones, and reported profits look beautifully smooth. See cookie jar reserves for the fuller pattern.