Calculation and optimization of accounts payable turnover

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How to calculate accounts payable turnover and optimize your financial management

Accounts payable turnover is an important indicator for a company's financial management . It refers to the frequency with which an organization pays its invoices to its suppliers. As such, it has an impact on credit strategies in companies since efficient management can result in better credit conditions with them, as well as the possibility of obtaining more competitive prices.

In this Moonflow post we tell you more about this financial indicator, how to calculate it and improve it.

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Importance of knowing the accounts payable turnover
Accounts Payable Turnover Calculation
How to optimize accounts payable?
Importance of knowing the accounts payable turnover
Basically, it is important to know this KPI because that way we can know buy sms list well the organization is managing the payment of invoices. In addition, it is relevant to know it because:

A positive accounts payable turnover indicates that the company's financial health is healthy, as it has cash to meet its obligations.
It allows the organization to have a clear understanding of how to manage its debts in the short term.
Knowing the turnover of accounts payable helps to optimize cash flow, allowing the company to take advantage of the credit terms offered by suppliers without making unnecessary advance payments.