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Days Payable Outstanding (DPO) is the mirror-image metric to Days Sales Outstanding: instead of measuring how long it takes to collect from customers, it measures how long a business takes to pay its own suppliers.
This calculator finds your DPO from accounts payable, cost of goods sold, and a period length.
How it works
Enter your accounts payable, cost of goods sold, and the period length in days (defaulting to 365 for a full year). The tool divides accounts payable by COGS, then multiplies by the period length.
- Enter accounts payable ($).
- Enter cost of goods sold ($).
- Enter period (days, default 365).
- Click Calculate to see your results.
Examples
A full-year DPO
$50,000 in accounts payable against $600,000 in COGS over 365 days gives a DPO of about 30.4 days.
Who should use it
- Analyzing a business's cash conversion cycle alongside DSO and inventory turnover.
- Benchmarking supplier payment timing over multiple periods.
Industry applications
- Financial analysis and accounting
- Supply chain and accounts payable management
Advantages
- Simple way to track how quickly a business pays its suppliers.
- A standard metric used alongside DSO and inventory turnover for full cash-conversion-cycle analysis.
Limitations
- A single blended DPO can obscure differences in payment timing across different suppliers or expense categories.
Common mistakes to avoid
- Comparing DPO across companies in very different industries, where typical payment terms vary widely.
- Treating a rising DPO as automatically positive without checking whether it's straining supplier relationships.
Best practices
- Compare DPO against your actual negotiated supplier payment terms to see whether you're paying earlier or later than agreed.
Tips
- Combine DPO with Days Sales Outstanding and Inventory Turnover to calculate the full cash conversion cycle: DSO + Days Inventory Outstanding − DPO.