Business Insights—Accounts Payable Days

The Accounts Payable Days window shows the average number of days it would take to pay your total accounts payable at the average cost of goods sold per day. This rate is calculated as follows:

Accounts Payable collection rate = (Accounts Payable divided by Cost of Goods Sold)  x days in the specified month.

For information about how amounts are calculated and defined, see Business Insights—Introduction.

Amounts shown in this window are color coded:

■	Green indicates a decrease in the payment rate from the prior period. This is a positive trend and indicates you are paying debts when they are due and no sooner.

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Red indicates an increase in the payment rate from the prior period. This might have a short-term positive effect on cash flow, but your vendors might decrease your credit limit or change your credit terms if you regularly pay them late. You may also be missing out on discounts for early payments, which can also increase profits.

■	Blue means there has been no change in the payment rate from the prior period.

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Related Topics

■	Tracking financial information

■	Reviewing financial information