How fast you pay suppliers.

AP turnover measures how many times per year a business pays off its suppliers. Divide total supplier purchases by average accounts payable balance. Inverse gives Days Payable Outstanding (DPO), the average number of days taken to pay suppliers. Most businesses settle in 30-60 days; supermarkets famously push to 90+ days using scale leverage.

6M purchases against 500k average AP gives turnover 12.0, DPO of 30 days. That's on-time payment within standard net-30 terms. Stretch to 1.5M average AP and turnover drops to 4.0, DPO 90 days - supplier relations strained, likely paying late fees or losing early-pay discounts.

Paying slower (lower turnover, higher DPO) improves cash position but damages supplier goodwill. Best-in-class businesses negotiate 60-90 day terms contractually rather than paying late - the cash benefit stays but the supplier relationship remains intact. Any consistent stretch beyond contract terms is a signal of cash problems.

Quick example

With total supplier purchases of 6,000,000 and avg accounts payable of 500,000, the result is 12.00. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Total Supplier Purchases and Avg Accounts Payable. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

What's happening under the hood

AP turnover = purchases ÷ avg payables. Days Payable Outstanding = 365 ÷ turnover. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

What to do with a low result

A disappointing result is information, not a judgement. Pick the single input that dragged the figure down most and focus the next quarter on that one factor. Breadth-first improvement rarely works; depth-first on the worst input usually does.

What this doesn't capture

The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.