--- title: "What Is Days Payable Outstanding (DPO)?" url: https://www.uncap.com/glossary/days-payable-outstanding author: "Denis Dyli" published: 2026-10-28 updated: 2026-10-28 summary: "Days payable outstanding (DPO) is a measure of how many days, on average, a business takes to pay its suppliers. Microsoft's Business Central documentation divides accounts payable by cost of goods sold and multiplies the result by the number of days in the period. Infor LN's version divides by purchases instead. It is the payables side of days sales outstanding." --- # What Is Days Payable Outstanding (DPO)? > Days payable outstanding (DPO) is a measure of how many days, on average, a business takes to pay its suppliers. Microsoft's Business Central documentation divides accounts payable by cost of goods sold and multiplies the result by the number of days in the period. Infor LN's version divides by purchases instead. It is the payables side of days sales outstanding. **Days payable outstanding**: Days payable outstanding (DPO) is a measure of how many days, on average, a business takes to pay its suppliers. Microsoft's Business Central documentation divides accounts payable by cost of goods sold and multiplies the result by the number of days in the period. Infor LN's version divides by purchases instead. It is the payables side of days sales outstanding. ## How it works Days payable outstanding (DPO) turns the amount you owe suppliers into a number of days, so you can see how long supplier invoices stay open before you pay them. Microsoft's documentation for the Business Central Power BI Finance app gives the formula as: DPO = (accounts payable / cost of goods sold) x number of days - Accounts payable: what you owe suppliers on open invoices. See accounts payable. - Cost of goods sold: the cost of the goods sold in the same period. See cost of goods sold. - Number of days: Business Central counts the total number of days within the selected period. Not every system uses the same denominator. Infor's documentation for Infor LN Analytics Foundation calculates DPO as trade accounts and notes payables divided by purchases, times the number of period days. Check which formula your ERP uses before you compare DPO across systems or with another company. ## DPO vs. DSO - DPO: how long you take to pay your suppliers. Business Central: (accounts payable / cost of goods sold) x number of days. - DSO: how long your customers take to pay you. Business Central: (accounts receivable / revenue) x number of days. See days sales outstanding. The same open invoice sits in the seller's receivables and the buyer's payables, so your buyers' DPO shows up in your DSO. Both feed the [cash conversion cycle](/glossary/cash-conversion-cycle), which Business Central calculates as days sales of inventory plus DSO minus DPO. This is general information, not financial or accounting advice. ## Example An industrial supply distributor buys on net 30 terms. For the year: - Cost of goods sold: $3,650,000, or $3,650,000 / 365 = $10,000 a day - Accounts payable: $400,000 Using the Business Central formula, DPO = ($400,000 / $3,650,000) x 365 = 40 days. On average, the distributor takes about 40 days to pay suppliers, about 10 days longer than its 30-day terms. If accounts payable were $300,000, DPO would be ($300,000 / $3,650,000) x 365 = 30 days, in line with the terms. ## On Shopify On Shopify you usually sit on the other side of DPO: your B2B buyers' payables are your receivables. Shopify B2B runs on the Basic, Grow, Advanced and Shopify Plus plans. - Payment terms: the available terms are net 7, net 15, net 30, net 45, net 60, and net 90, and all terms start from the day the order is placed. - Collection: payments aren't automatically captured when the payment terms expire. How long your buyers take inside and past those terms is what their DPO looks like from your side. ## How Uncap helps Uncap's guide to [Shopify net terms](/post/shopify-net-terms) explains that with [Uncap Connect](/products/connect), Shopify orders sync to your ERP automatically, including net terms orders with payment due dates and outstanding balances, so your AR stays accurate without manual entry between systems. ## Related terms - Accounts payable - Days sales outstanding - Cash conversion cycle - Cost of goods sold - 2/10 net 30 - Trade credit ## Sources - Microsoft Learn: Power BI Finance app KPIs and measures (Business Central) - Infor LN Analytics Foundation: Days Payable Outstanding - Shopify Help Center: Payment terms for B2B ## Frequently asked questions ### How do you calculate days payable outstanding? In Microsoft's Business Central documentation, days payable outstanding is accounts payable divided by cost of goods sold for the period, multiplied by the number of days in the period. With $400,000 of payables and $3,650,000 of annual cost of goods sold, days payable outstanding is ($400,000 / $3,650,000) x 365 = 40 days. Infor LN's report divides by purchases instead of cost of goods sold. ### Is a high days payable outstanding good? It depends on your supplier terms. A higher days payable outstanding means cash stays in the business longer before it goes to suppliers, but a DPO well above your agreed terms means invoices are, on average, being paid late. Compare DPO with the terms you buy on, such as net 30. This is general information, not financial advice. ### What does outstanding payables mean? Outstanding payables are supplier invoices a business has received and recorded but not yet paid. Their total is the accounts payable balance, the number that days payable outstanding divides by cost of goods sold or purchases. ### How do you calculate DIO, DSO, and DPO? Microsoft's Business Central documentation uses (inventory / cost of goods sold) x number of days for days sales of inventory, also called days inventory outstanding; (accounts receivable / revenue) x number of days for DSO; and (accounts payable / cost of goods sold) x number of days for DPO.