Accounts Payable Days Calculator

Accounts payable days (DPO) calculator for supplier payment speed

Accounts payable days, often called days payable outstanding (DPO), is a simple way to estimate how long your business takes to pay its suppliers. If you sell products or rely heavily on supplier invoices, this metric helps you understand working capital and cash timing. A higher number usually means you are holding on to cash longer before paying, while a lower number usually means you pay suppliers faster. Neither is automatically good or bad. It depends on supplier terms, discounts, service levels, and your cash position.

This calculator is designed for real-world use. You can get a quick answer using your current accounts payable balance and an annual cost base (either COGS or purchases). If you have a beginning accounts payable balance for the same period, you can include it to use an average payables value. Using an average tends to be more stable, especially if your payables fluctuate at month-end or around seasonal purchasing cycles.

The core idea is straightforward: convert your annual cost base into a per-day amount, then compare your payables to that daily cost. If your daily cost is high, a given payables balance represents fewer days. If your daily cost is low, the same payables balance represents more days. The output gives you an estimated number of days, plus a payables turnover figure that shows how many times per year your payables cycle through.

Assumptions and how to use this calculator

• If you do not know your period length, the calculator uses 365 days by default.
• Use COGS if you want a standard DPO approach for product-based businesses; use purchases if that better matches your supplier invoices and cost structure.
• If you enter a beginning payables balance, the calculator uses the average of beginning and ending payables; otherwise it uses the ending balance as an estimate.
• This is an estimate of timing, not a contractual statement of supplier terms. Actual payment behavior can differ by supplier, invoice date, and approval workflow.
• Large one-off purchases, seasonality, or changes in payment policy can skew the result; compare across multiple periods for a clearer trend.

Common questions

What is a “good” accounts payable days number?

There is no universal target. Many businesses aim to align DPO with supplier terms. If your suppliers offer 30-day terms, a DPO near 30 can indicate you are paying roughly on time. A much lower number could mean you pay early (sometimes intentionally to secure supply or discounts). A much higher number could indicate strong negotiating power, deliberate cash management, or cash strain. The right number is the one you can sustain without harming supplier relationships or losing early-payment benefits.

Should I use COGS or purchases in the calculation?

COGS is common for benchmarking and for businesses where inventory and product costs dominate. Purchases can be more direct if you track supplier purchases cleanly and want DPO to reflect what you actually buy on credit from suppliers. If you are unsure, start with COGS for consistency, then compare the result using purchases to see how sensitive your DPO is to the chosen base.

What if I do not know my beginning accounts payable balance?

Leave it blank. The calculator will use your ending payables balance as an estimate. This is often good enough for a quick check, especially if your payables do not swing wildly. If you want a more reliable trend, pull beginning and ending payables for the same period (for example, start and end of the year, or start and end of a quarter) and compare across periods.

Why does DPO change even when my payables balance looks similar?

DPO depends on both payables and your cost base. If annual COGS or purchases rise, your daily cost rises, which can lower DPO even if payables stay flat. The opposite is also true. That is why DPO is usually more informative than payables alone. It puts payables into context of how much you are buying or consuming over time.

When might this calculator not apply?

If your costs are not primarily supplier-driven, or if your payables include large non-trade items that do not relate to COGS or purchases (for example, payroll taxes or unusual accruals), the estimate may be misleading. In that case, refine the inputs by using trade payables only, or use a cost base that better matches the payables you are measuring. Also, if you pay many suppliers immediately (cash on delivery) then DPO may be naturally low, which is not necessarily a problem.