Days Payable Outstanding

Days payable outstanding measures how many days a company takes to pay suppliers.

Days payable outstanding, or DPO, measures how long a company takes to pay suppliers after purchases or costs are incurred.

Formula

DPO = Average accounts payable / Cost of goods sold x Days in period

DPO affects the cash conversion cycle because longer supplier payment timing can offset cash tied up in inventory and receivables. Compare DPO inside the full cycle with cash conversion cycle benchmarks by industry.