How To Calculate Days Payable Outstanding in Smartsheet | Arithmix

Calculating Days Payable Outstanding (DPO) is an important metric for any business that wants to keep track of its financial health. DPO measures the average number of days it takes a company to pay its suppliers and vendors for goods and services received. This metric is important because it can help businesses identify potential cash flow issues and improve their relationships with suppliers.

What Is Days Payable Outstanding?

Days Payable Outstanding is a financial metric that measures the average number of days it takes a company to pay its suppliers and vendors for goods and services received. This metric is calculated by dividing the total accounts payable by the average daily cost of goods sold. The result is the number of days it takes a company to pay its suppliers.

DPO is an important metric because it can help businesses identify potential cash flow issues. If a company has a high DPO, it may indicate that they are taking too long to pay their suppliers, which can strain relationships and lead to supply chain disruptions. On the other hand, a low DPO may indicate that a company is paying its suppliers too quickly, which can negatively impact cash flow.

When Is It Valuable To Calculate Days Payable Outstanding?

Calculating DPO is valuable for any business that wants to keep track of its financial health. This metric can help businesses identify potential cash flow issues and improve their relationships with suppliers. Additionally, DPO can be used to benchmark a company's performance against industry standards and competitors.

Businesses that rely heavily on their supply chain, such as manufacturers and retailers, may find DPO especially valuable. By monitoring DPO, these businesses can ensure that they are paying their suppliers in a timely manner and maintaining strong relationships with them. Additionally, businesses that are looking to improve their cash flow may use DPO as a tool to identify areas where they can optimize their payment processes.

In conclusion, calculating Days Payable Outstanding is an important metric for any business that wants to keep track of its financial health and maintain strong relationships with suppliers. By monitoring DPO, businesses can identify potential cash flow issues and optimize their payment processes to improve their financial performance.

How Do You Calculate Days Payable Outstanding in Smartsheet

Smartsheet 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 Smartsheet 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 Smartsheet, 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 Smartsheet 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 Smartsheet 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.