The total number of outstanding days for payable amount

KPI Definition

Days Payable Outstanding (DPO) refers to the average number of days it takes for an organization to pay its suppliers for goods or services received. This metric measures the efficiency of accounts payable management by evaluating the time taken to settle outstanding invoices.

Business Value

A company with a higher value of DPO takes longer to pay its bills, which means that it can retain available funds for a longer duration, allowing the company an opportunity to use those funds in a better way to maximize the benefits. A high DPO, however, may also be a red flag indicating an inability to pay its bills on time.