Companies are generating more data than ever before, but most of it just sits there. Getting good insights from it is often too hard, too costly or just takes too much time.
We’re here to tell you that this simply isn’t true.
To help companies better understand how Peerview Data’s process of Big Data, analytics and benchmarking software process works, we're continuing a series of blog posts that examine the individual performance metrics that are at the heart of this analysis.
- KPI: Accounts Payable (AP) Days
- DEFINITION: Accounts Payable Days keeps track of how long it takes your company to pay its vendors.
- FORMULA: Accounts Payable ÷ (Cost of Sales ÷ 360)
- BENCHMARK: AP Days vary by industry but are generally 30 to 90 days
- SIGNIFICANCE: How fast or slow you pay your suppliers can impact cash flow, operational efficiency and overall productivity because vendor relationships often influence terms, the timeliness of deliveries and sometimes the quality of whatever’s being supplied.
- RECOMMENDATION: Find the sweet spot where you are not paying too quickly or too slowly, but still maintain a good relationship with vendors.