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Late Payments Ratio Days Payables Outstanding 51330 3 {{{keywords}}} {{{description}}}
AE133
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Latest revision as of 14:48, 10 June 2017
Late Payments Ratio measures the amounts paid after payment was due, as a percentage of total payments. The amounts paid include penalties that may have been applied for late payment.
Contents
Calculation
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where:
- Late Payments = Total amounts paid, in the reported period, after payment was contractually due
- Payments = Total amounts disbursed in the reported period
Unit of measure: %
Notes
Late payments may appear desirable from an Asset Efficiency perspective. But proponents of early/on-time payment point out that experience shows that financially healthy suppliers are better suppliers. Late payment may also have an impact on costs as late payment fees and price increases may result from consistent late payment.
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