Days payable outstanding

This measure evaluates how many days, on average, a company takes to pay its creditors. It is calculated as the average value of accounts payable balance divided by (cost of goods sold divided by 365 days). As part of a set of Cycle Time measures, it helps companies analyze the duration of the process "procure materials and services" from beginning to end.

Benchmark Data

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Measure Category:
Cycle Time
Measure ID:
100642
Total Sample Size:
5,922 All Companies
Performers:
25th Median 75th
- - -
Key Performance Indicator:
No
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Compute this Measure

Units for this measure are days.

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Days payable outstanding

Key Terms

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Cycle Time

Cycle time is the total time from the beginning of the process to the end. This includes both time spent actually performing the process and time spent waiting to move forward.

Measure Scope

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Cross Industry (7.3.1)

  • 4.2.1 - Develop sourcing strategies (10277)
    • 4.2.1.1 - Develop procurement plan (10281)
    • 4.2.1.2 - Clarify purchasing requirements (10282)
    • 4.2.1.3 - Establish materials management contingency plans (10283)
    • 4.2.1.4 - Match needs to supply capabilities (10284)
    • 4.2.1.5 - Analyze organization’s spend profile (10285)
    • 4.2.1.6 - Seek opportunities to improve efficiency and value (10286)
    • 4.2.1.7 - Collaborate with suppliers to identify sourcing opportunities (10287)
  • 4.2.2 - Select suppliers and develop/maintain contracts (10278)
    • 4.2.2.1 - Select suppliers (10288)
    • 4.2.2.2 - Certify and validate suppliers (10289)
    • 4.2.2.3 - Negotiate and establish contracts (10290)
    • 4.2.2.4 - Manage contracts (10291)
  • 4.2.3 - Order materials and services (10279)
    • 4.2.3.1 - Process/Review requisitions (10292)
    • 4.2.3.2 - Approve requisitions (10293)
    • 4.2.3.3 - Solicit/Track vendor quotes (10294)
    • 4.2.3.4 - Create/Distribute purchase orders (10295)
    • 4.2.3.5 - Expedite orders and satisfy inquiries (10296)
    • 4.2.3.6 - Reconcile purchase orders (10297)
    • 4.2.3.7 - Research/Resolve order exceptions (10298)
  • 4.2.4 - Manage suppliers (10280)
    • 4.2.4.1 - Monitor/Manage supplier information (10299)
    • 4.2.4.2 - Prepare/Analyze procurement and vendor performance (10300)
    • 4.2.4.3 - Support inventory and production processes (10301)
    • 4.2.4.4 - Monitor quality of product delivered (10302)