Weighted Average Terms vs. Weighted Average Days to Pay

August 31, 2021


REL Consulting, a division of The Hackett Group, recommends many metrics when working with clients. One metric uses weighted average terms (WAT) versus weighted average days to pay (WADTP) to gauge AR's performance. REL claims the calculation is a better measurement than DSO because it is not influenced by sales or terms. It reflects an average over time. REL recommends tabulating WAT and WADTP, and then subtracting the totals. The difference or number of days is an indicator of AR's…

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