Accounting & Finance
What is Creditor Days (DPO)?
- Creditor Days (DPO)
- Creditor Days (Days Payable Outstanding) measures how long a business takes to pay its suppliers — longer DPO improves cash flow but may strain supplier relationships.
DPO Formula and Benchmarks
DPO = (Trade Payables / COGS) × 365. Extending DPO from 30 to 45 days on ₹10Cr annual purchases frees up ~₹41L in working capital. Overly aggressive DPO (>90 days for SME suppliers) risks supply disruptions and loss of early payment discounts.
Managing Payables in ERPNext
ERPNext's Accounts Payable Aging report shows outstanding invoices by due date. Payment Terms on supplier invoices set exact due dates. ERPNext can schedule automatic payment reminders to AP staff. Prioritise paying suppliers who offer early payment discounts to maximise savings.
Need help with Creditor Days (DPO)?
Infonoxe Technologies specialises in ERPNext implementation and custom software for Indian businesses.
Related Terms
Accounts Payable
Accounts Payable in ERPNext tracks money your business owes to suppliers, helpin…
Payment Terms
Payment Terms in ERPNext define the due date schedule for invoices, supporting n…
Purchase Invoice
A Purchase Invoice in ERPNext records a bill from a supplier, creates a payable …
Working Capital
Working Capital is Current Assets minus Current Liabilities — the liquidity avai…
Implement ERPNext for Your Business
Expert ERPNext implementation, customisation, and support for Indian businesses.