What is days payables in SAP EPM-SCP - Supply Chain Performance Management?

SAP Term: days payables

• Component: EPM-SCP

• Component Name: Supply Chain Performance Management

• Description: The length of time from purchasing materials until cash payments must be made expressed in days.

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• Key Concepts: 
  Days Payables is a metric used to measure the average number of days it takes a company to pay its suppliers. It is calculated by dividing the total amount of accounts payable by the total cost of goods sold, and then multiplying by the number of days in the period. This metric is important for companies to understand their cash flow and liquidity, as well as their ability to pay suppliers on time.
  
  How to use it: 
  Days Payables can be used to measure the efficiency of a company's accounts payable process. It can also be used to compare a company's performance against industry standards or other companies in the same sector. Additionally, it can be used to identify areas where improvements can be made in order to reduce the amount of time it takes to pay suppliers.
  
  Tips & Tricks: 
  It is important to ensure that all accounts payable are accurately recorded in order to get an accurate Days Payables calculation. Additionally, it is important to ensure that all invoices are processed in a timely manner in order to reduce the amount of time it takes to pay suppliers.
  
  Related Information: 
  Days Payables is closely related to Days Sales Outstanding (DSO), which measures the average number of days it takes a company to collect payments from its customers. Additionally, Days Payables is often used in conjunction with other metrics such as Cash Conversion Cycle (CCC) and Working Capital Ratio (WCR) in order to gain a better understanding of a company's financial health.