Days payable outstanding
The average number of days a business takes to pay its suppliers, measured from invoice receipt to payment. A standard liquidity and payment-behaviour metric.
Days payable outstanding (DPO) is the average number of days a business takes to pay its suppliers, measured from the receipt of an invoice to the payment of it. It is a standard finance metric, used to understand both liquidity and payment behaviour.
A higher DPO means a business holds onto cash for longer before paying suppliers, which can aid working capital but, taken too far, strains supplier relationships and can breach fair payment expectations. A lower DPO signals prompt payment. Read alone, the number is neutral; its meaning depends on sector norms and the terms agreed.
DPO becomes more useful when it is measured from real, shared invoice timelines and compared against peers, rather than estimated from period-end accounts.