How To Calculate Days Payable Outstanding in MultiView | Arithmix

Calculating Days Payable Outstanding (DPO) is an important metric for any business, as it helps to measure the efficiency of a company's cash flow management. DPO is the average number of days it takes for a company to pay its suppliers after receiving goods or services. In this article, we will discuss what DPO is, why it is valuable to calculate, and how to calculate it in MultiView.

What Is Days Payable Outstanding?

Days Payable Outstanding is a financial metric that measures the average number of days it takes for a company to pay its suppliers. It is calculated by dividing the total accounts payable by the average daily cost of goods sold. The resulting number represents the average number of days it takes for a company to pay its suppliers after receiving goods or services.

DPO is an important metric for businesses because it helps to measure the efficiency of cash flow management. A high DPO indicates that a company is taking longer to pay its suppliers, which can be a sign of financial distress or poor cash flow management. On the other hand, a low DPO indicates that a company is paying its suppliers quickly, which can be a sign of strong cash flow management.

When Is It Valuable To Calculate Days Payable Outstanding?

Calculating DPO is valuable for any business that wants to improve its cash flow management. By measuring the average number of days it takes to pay suppliers, businesses can identify areas where they can improve their payment processes and negotiate better payment terms with suppliers.

For example, if a company has a high DPO, it may be able to negotiate longer payment terms with its suppliers, which can help to improve cash flow. Alternatively, if a company has a low DPO, it may be able to negotiate shorter payment terms with its suppliers, which can help to improve relationships with suppliers and reduce the risk of late payments.

Overall, calculating DPO is a valuable tool for any business that wants to improve its cash flow management and build stronger relationships with its suppliers.

How to Calculate Days Payable Outstanding in MultiView

To calculate DPO in MultiView, you will need to follow these steps:

1. Log in to your MultiView account and navigate to the Accounts Payable module.
2. Select the "Reports" tab and choose "Aging Reports."
3. Select the "Accounts Payable Aging Detail" report and set the date range for the report.
4. Export the report to Excel.
5. Calculate the total accounts payable for the date range by summing the "Amount Due" column in Excel.
6. Calculate the average daily cost of goods sold by dividing the total cost of goods sold by the number of days in the date range.
7. Divide the total accounts payable by the average daily cost of goods sold to calculate DPO.

By following these steps, you can easily calculate DPO in MultiView and use this valuable metric to improve your cash flow management and build stronger relationships with your suppliers.

How Do You Calculate Days Payable Outstanding in MultiView

MultiView itself isn’t naturally geared towards letting you calculate complex metrics like Days Payable Outstanding. As an alternative, teams typically use products like Arithmix to import data from MultiView 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 MultiView, combine it with data from other systems, and create calculations like Days Payable Outstanding.

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 Days Payable Outstanding in Arithmix

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

Arithmix is designed to give you the power to build any calculations you want on top of your MultiView 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.