Days Payable Outstanding (DPO)

DPO Calculator

Accounts Payable ($)

Average outstanding amount owed to suppliers

Cost of Goods Sold - COGS ($)

Annual cost of goods sold

Number of Days

Period for calculation

Results

Days Payable Outstanding

Average time to pay suppliers

Daily COGS

Payment Velocity

Interpretation

Enter values to calculate DPO

Formula & How It Works

DPO Formula

DPO = (Accounts Payable / Cost of Goods Sold) × Number of Days

Measures the average number of days it takes to pay suppliers.

What DPO Tells You

• Higher DPO = Longer payment periods
• Better cash flow management
• Supplier relationship indicator
• Working capital efficiency

Industry Benchmarks

Retail

30-45 days

Fast inventory turnover

Manufacturing

45-60 days

Standard payment terms

Technology

60-90 days

Longer payment cycles

Tips for Managing DPO

Optimize DPO

Negotiate longer payment terms with suppliers
Take advantage of early payment discounts when beneficial
Use electronic payments to streamline processes
Monitor supplier relationships and credit terms

Balance Considerations

Don't damage supplier relationships with excessive delays
Consider cash discounts vs. extended payment benefits
Maintain good credit rating and payment history
Balance DPO with DSO and DIO for optimal cash flow