days accounts payable (Days A/P)



The average number of days a company takes to pay its bills, used as a measure of how much it depends on trade credit for short-term financing.

As a rule of thumb, a well managed company's days accounts payable do not exceed 40 to 50 days. Also called days sales in payables. Formula: Average accounts payable x 365 √∑ cost of sales.

Related Videos

Have a question about this term? Ask for help in the
Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z