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AP metrics
March 30, 2021
Q. 1. How do you calculate DPO in the AP process?
2. How do you determine what number to use when considering the invoice processing cycle? Is it all the outstanding documents which are already overdue? All the documents which are not yet due? Or, all the documents which were processed and ready for payment?
3. Also what do you mean by cost of goods sold?
A.
(Answered by IOFM's Executive Editor Jess Scheer)
Days Payable Outstanding = (Average Accounts Payable / Cost of Goods Sold) x Number of…
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