How To Calculate DPO in Sage Intacct | Arithmix

DPO, or Days Payable Outstanding, is a metric used to measure the average number of days it takes a company to pay its suppliers. This metric is important because it can give insight into a company's financial health and management of cash flow. In this article, we will discuss what DPO is, when it is valuable to calculate DPO, and how to calculate DPO in Sage Intacct.

What Is DPO?

DPO is a financial metric that measures the average number of days it takes a company to pay its suppliers. This metric is calculated by dividing accounts payable by the cost of goods sold and multiplying the result by the number of days in the period. The formula for calculating DPO is:

DPO = (Accounts Payable / Cost of Goods Sold) x Number of Days in the Period

The resulting number represents the average number of days it takes a company to pay its suppliers. A lower DPO indicates that a company is paying its suppliers more quickly, while a higher DPO indicates that a company is taking longer to pay its suppliers.

When Is It Valuable To Calculate DPO?

Calculating DPO can be valuable for a variety of reasons. For example, it can give insight into a company's financial health by indicating how well it is managing its cash flow. A low DPO can indicate that a company is paying its suppliers quickly and efficiently, which can be a positive sign for investors and creditors. On the other hand, a high DPO can indicate that a company is struggling to manage its cash flow and may be at risk of defaulting on its payments.

DPO can also be useful for benchmarking purposes. By comparing a company's DPO to industry averages or competitors, investors and analysts can gain insight into how well the company is performing relative to its peers.

How to Calculate DPO in Sage Intacct

Sage Intacct is a cloud-based accounting software that can be used to calculate DPO. To calculate DPO in Sage Intacct, follow these steps:

1. Go to the Accounts Payable module in Sage Intacct.
2. Select the time period for which you want to calculate DPO.
3. Divide the total accounts payable for the period by the cost of goods sold for the same period.
4. Multiply the result by the number of days in the period to get the DPO.

It's important to note that while Sage Intacct can help you calculate DPO, it's up to you to interpret the results and take action accordingly. A high DPO may indicate that you need to improve your cash flow management, while a low DPO may indicate that you are paying your suppliers too quickly and may need to negotiate better payment terms.

In conclusion, calculating DPO can be a valuable tool for gaining insight into a company's financial health and cash flow management. By understanding what DPO is, when it is valuable to calculate DPO, and how to calculate DPO in Sage Intacct, you can use this metric to make informed decisions about your business.

How Do You Calculate DPO in Sage Intacct

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

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 DPO in Arithmix

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

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