DPO — Days Payable Outstanding

Definition

The average number of days you take to pay suppliers. Higher DPO means suppliers finance more of your operations.

Formula

DPO = (Accounts Payable / COGS) x Days in period

Worked Example

AP balance $12,000, monthly COGS $21,000:

DPO = ($12,000 / $21,000) x 30 = 17.1 days

With DSO = 15.3: DPO > DSO — suppliers fund the gap. Structural cash advantage.

Interpretation & Pitfalls

Stretching DPO improves cash but strains supplier relationships; track it against agreed payment terms, not just in isolation.

In TupicFinance

The AP aging data from Pay Later liabilities yields DPO directly.