How To Calculate Accounts Payable Turnover in SYSPRO | Arithmix

Accounts payable turnover is a financial metric that measures how efficiently a company pays its suppliers. It is calculated by dividing the total cost of goods sold by the average accounts payable balance during a specific period. This metric is useful for evaluating a company's cash flow and financial health, as well as identifying potential areas for improvement in the accounts payable process.

What Is Accounts Payable Turnover?

Accounts payable turnover is a ratio that measures the number of times a company pays its suppliers during a specific period. It is calculated by dividing the total cost of goods sold by the average accounts payable balance during that period. The resulting number indicates how many times a company pays its suppliers in a given period, such as a year or a quarter.

For example, if a company has a total cost of goods sold of $1 million and an average accounts payable balance of $200,000 during a year, its accounts payable turnover would be 5. This means that the company pays its suppliers five times per year on average.

When Is It Valuable To Calculate Accounts Payable Turnover?

Calculating accounts payable turnover is valuable for several reasons. First, it can help a company evaluate its cash flow and financial health. A high accounts payable turnover ratio indicates that a company is paying its suppliers quickly, which can improve its cash flow and reduce the risk of late payment penalties or damaged supplier relationships.

Second, accounts payable turnover can help a company identify potential areas for improvement in its accounts payable process. For example, a low accounts payable turnover ratio may indicate that a company is taking too long to pay its suppliers, which can lead to strained relationships and reduced access to credit.

Finally, accounts payable turnover can be useful for benchmarking a company's performance against industry peers. By comparing its accounts payable turnover ratio to those of similar companies, a company can identify areas where it may be falling behind and take steps to improve its performance.

In conclusion, calculating accounts payable turnover is a valuable financial metric that can help companies evaluate their cash flow, identify areas for improvement, and benchmark their performance against industry peers. By understanding how to calculate accounts payable turnover and using it regularly, companies can improve their financial health and build stronger relationships with their suppliers.

How Do You Calculate Accounts Payable Turnover in SYSPRO

SYSPRO itself isn’t naturally geared towards letting you calculate complex metrics like Accounts Payable Turnover. As an alternative, teams typically use products like Arithmix to import data from SYSPRO and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like SYSPRO, combine it with data from other systems, and create calculations like Accounts Payable Turnover.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Accounts Payable Turnover in Arithmix

Calculating metrics like Accounts Payable Turnover is simple in Arithmix. Once you've created your free account, you’ll be able to import your SYSPRO data, and use it to create natural language formulas for metrics like Accounts Payable Turnover.

Arithmix is designed to give you the power to build any calculations you want on top of your SYSPRO data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.