Days Payable Outstanding (DPO)
The average number of days a business takes to pay its own suppliers and vendors after receiving an invoice.
A higher DPO means a business holds onto its cash longer before paying vendors, which can improve short-term cash flow, though stretching payments too far can strain vendor relationships or trade credit terms.
DPO works in the opposite direction of DSO within the cash conversion cycle formula, a business generally wants to collect from customers quickly (low DSO) while taking reasonable time to pay vendors (higher DPO).
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