Days payables outstanding (DPO)

Days payables outstanding (DPO) shows the average number of days your business takes to pay suppliers. It uses your trade payables (trade creditors) and your costs of goods or services bought on credit to estimate how long cash stays in the business before invoices are settled.

A higher DPO usually helps short‑term cash flow but can strain supplier relationships; a lower DPO can support better terms or discounts but ties up cash sooner. Calculate it consistently each period, typically as average trade payables divided by cost of sales per day (or purchases on credit per day), so your trend and comparisons make sense.