Managing Days Payable Outstanding to Improve Cash Flow

Published On:

May 22, 2024

Authored By:

APQC

Public Content:

Haphazard decisions about how promptly to pay bills can damage strategic relationships and cause organizations to miss out on business or investment opportunities. Haphazard decisions about how promptly to pay bills can damage strategic relationships and cause organizations to miss out on business or investment opportunities.

Finding the liquidity sweet spot requires intentionally balancing payment terms for customers and the average time between receiving and paying invoices from third parties. Doing so helps financial managers maintain alignment with strategic goals, market shifts, and external economic conditions. The key to striking this balance lies in tracking and managing two corresponding measures: days payable outstanding (DPO) and days sales outstanding (DSO).

Type:

Infographics

Topics:

Finance and Accounting, Accounts Payable

Tags:

Key performance indicators (KPIs)

Related Resources

Four Financial KPIs that Should be on Every CFO's Dashboard

Understanding Accounts Payable Benchmarks and Best Practices

Metric of the Month: Percentage of Error-Free Disbursements

Getting Disbursements Right the First Time is Good Business

Summary of Open Standards Benchmarking Measures: Accounts Payable and Expense Reimbursement

Accounts Payable Key Benchmarks

Accounts Payable Key Benchmarks: Cross Industry

Expense Reimbursement Key Benchmarks: Cross-Industry

Key Benchmarks at a Glance: Consumer Products/Packaged Goods Industry

Accounts Payable Glossary of Key Terms

Example AP Process Map and RACI

Accounts Payable Fundamentals