Days payable outstanding (supplier payment days)
Days payable outstanding shows how many days, on average, a chain takes to pay supplier invoices; it is the trade payables balance divided by daily cost of goods sold.
Also calledDPO, creditor days, supplier payment days, average payment term
Formula
Trade payables balance ÷ Cost of goods sold × Days in period- Trade payables balance
- Total of unpaid supplier purchase invoices at period end or averaged over the period
- Cost of goods sold
- Purchase cost of goods sold in the same period
- Days in period
- 30 for a monthly calculation, 365 for an annual one
Calculator
Enter your own figures and the result updates instantly. The defaults are the figures from the worked example below.
Result36 days
Worked example
How to read it, and what good looks like
In finance terms, payment days are a source of working capital: a chain that pays suppliers on credit and collects from customers at the till carries its stock on supplier funding. BİM's reports list negative net working capital among the features of its business model. In Turkey, however, this period has a legal ceiling for agricultural and food products.
Under Article 7 of Law No. 6585 (added by Law No. 7435 on 26 January 2023) and Article 5 of the Regulation, for agricultural and food products that can perish within 30 days of production, payment is due within 30 days if the creditor is micro or small and the debtor medium or large, or the creditor medium and the debtor large, and within 45 days in other cases. For other agricultural and food products, the ceiling in the same size relationship is 60 days. The period runs from delivery or transfer of ownership, whichever is earlier, and the burden of proof sits with the debtor.
The chain average is therefore not enough; the period is tracked by product group and supplier size. A chain averaging 36 days may still be paying small fresh-produce suppliers after more than 30 days. The right report calculates the days between delivery date and payment date invoice by invoice and lists the invoices over the limit with their owners.
| Context | Value | Note |
|---|---|---|
| Agricultural and food products perishable within 30 days; creditor micro/small and debtor medium/large, or creditor medium and debtor large | At most 30 days | Law 6585 Art. 7, Regulation Art. 5 |
| Products perishable within 30 days, other size relationships | At most 45 days | Law 6585 Art. 7, Regulation Art. 5 |
| Other agricultural and food products, same size relationship | At most 60 days | Law 6585 Art. 7, Regulation Art. 5 |
Where it misleads
- Measuring compliance on the chain average: individual invoices can breach the limit while the average sits below it; compliance is measured per invoice.
- Starting the clock at invoice date: the period runs from delivery or transfer of ownership, whichever is earlier.
- Leaving credit-term interest out of cost: Migros's 2025 report lists interest on credit purchases among the items affecting gross margin; if it is not reflected in cost, margin is misread.
- Reading every product against one limit: the limits in Law 6585 are written for agricultural and food products; non-food purchases are reported separately.
Data you need
- Purchase invoice: supplier, product group, delivery date, amount
- Payment record: date and amount
- Supplier size (micro, small, medium, large)
- Shelf life on the product master (perishable-within-30-days flag)
Mindpera products that calculate this KPI
Mind Cost
The cost of what you buy for the shelf and the cost of what your bakery, deli and kitchen produce are calculated on the same model; in both, where the gap comes from is visible line by line.
Mind Stock
Stop treating stock accuracy as something that waits for a count and a month-end close. See movements in and out, expiry dates and profitability on one screen.
Frequently asked questions
- What is the maximum payment term for suppliers in Turkey?
- Under Article 7 of Law No. 6585, for agricultural and food products that can perish within 30 days of production, payment is due within 30 days if the creditor is micro or small and the debtor medium or large, or the creditor medium and the debtor large, and within 45 days in other cases. For other agricultural and food products, the limit in the same size relationship is 60 days. The period runs from delivery or transfer of ownership, whichever is earlier.
- How is days payable outstanding calculated?
- The period-end trade payables balance is divided by cost of goods sold for the same period and multiplied by the number of days in it. A chain with ₺30,000,000 of monthly cost of goods sold and ₺36,000,000 of trade payables has 36 days payable outstanding. For legal compliance, the days between delivery and payment are tracked invoice by invoice rather than on average.
- Is a longer payment period better?
- In financing terms a longer period means stock is carried on supplier funding, which reduces working capital need. For agricultural and food products, however, the ceilings in Article 7 of Law No. 6585 are binding and the burden of proof sits with the debtor. The target is therefore not the longest possible period but one that stays within the limit and is tracked per invoice.
Sources
- Law No. 6585 on the Regulation of Retail Trade (Turkish)
- Regulation on Principles and Rules in Retail Trade (Turkish)
- Ministry of Trade, principles and rules in retail trade (Turkish)
- Migros 2025 Integrated Annual Report (KGK archive, Turkish) — 2025-12-31
- BİM 2024 Integrated Annual Report (Turkish) — 2024