Metric of the Month: Days Payable Outstanding

For most companies, the answer is a combination of managing working capital, avoiding late fees and interest charges, the strength of the relationship with the creditor, and taking advantage of any fast-pay discounts. In a separate APQC study, 67% of companies said they extended payment terms to imp...

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Bibliographic Details
Published inCFO.com
Main Author Hinson, Michael
Format Trade Publication Article
LanguageEnglish
Published New York CFO.com 08.08.2017
Subjects
Cash flow
Credit management
Financial management
Open standards
Prices
Working capital
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Summary:For most companies, the answer is a combination of managing working capital, avoiding late fees and interest charges, the strength of the relationship with the creditor, and taking advantage of any fast-pay discounts. In a separate APQC study, 67% of companies said they extended payment terms to improve working capital, despite already having good cash flow. Nearly 45% said they felt shareholder pressure to protect their balance-sheet profile. [...]the decision today is more of a strategic one based on organizational context and strategy.