For Treasury Teams at commercial banks looking to deliver deeper client insights, one underutilized metric could be the key to unlocking stronger relationships.
Ask most banks how they assess a client’s financial health, and you’ll hear the usual suspects: cash balances, credit exposure, revenue trends.
What you rarely hear? How long the client takes to pay their suppliers.
That’s where Days Payable Outstanding (DPO) comes in. It’s not headline-grabbing. It won’t dominate boardroom discussions. But it may be the clearest window into how a business manages its working capital, and by extension, its capacity to grow, sustain liquidity, and weather economic shifts.
For Treasury Consultants and Commercial Card teams, especially those aiming to build deeper, more strategic client relationships, DPO is one of the most underutilized (but high-leverage) diagnostics available. When understood and acted on, it unlocks powerful insight into a company’s cash posture, supplier strategy, and spend behavior.
What is DPO and why should banks care?
DPO = (Accounts Payable / Cost of Goods Sold) × Number of Days
DPO measures how many days, on average, a business takes to pay its suppliers. A higher DPO can indicate effective cash retention and liquidity optimization (as long as it doesn’t come at the cost of strained vendor relationships). A low DPO might suggest operational efficiency or a missed opportunity to improve working capital by extending float.
For commercial banks working with mid-market clients, especially those with $100M+ in revenue, this matters more than ever. According to the National Center for the Middle Market, 37% of these firms cite working capital management as their top financial concern.
Even marginal shifts, like extending payables by five days or speeding collections by three, can unlock millions in free cash flow. But, these are levers few clients are pulling, simply because no one is showing them how to.
What to look out for
Treasury and Commercial Card teams should watch for the following DPO patterns and flags and use them as springboards for proactive, insight-led conversations:
| Observation | What it could suggest | Next steps |
| Most invoices paid in <15 days | Early payments draining liquidity | Recommend shifting key suppliers to card to extend payable window |
| Static DPO after onboarding | Product adoption may be stalled | Flag for supplier enablement or deeper review |
| Top vendors still paid via check | High-friction payment process | Suggest migrating to digital or virtual card |
| No use of early-pay discounts | Missed opportunity for yield | Explore tailored term structures or financing options |
It’s also worth watching out for excessively high DPO (+30–45 days) which can flag deeper issues like unresolved vendor disputes or strained supplier relationships. While short-term liquidity may improve, long-term supplier trust and partnership value may erode.
Being able to spot these signals in real time empowers Treasury teams to deliver timely, relevant, and actionable advice, the kind of high-impact support mid-market clients truly value.
In fact, a recent Codat survey found that having dedicated Account Managers who understand their business, offer strategic guidance, and serve as consistent points of contact was the second most important factor mid-market businesses consider when selecting a bank.
DPO isn’t the whole story, but it’s where the story starts
Working capital isn’t shaped by single, sweeping decisions. It’s driven by a series of everyday choices: when to pay, how to pay, how soon to collect. Get those choices right, and cash becomes a lever for growth. Get them wrong, and liquidity quietly slips away.
In today’s high-rate, low-margin environment, those details could determine whether your client thrives or struggles.
For Treasury professionals looking to move beyond transactional conversations, this is a prime opportunity to lead with insight.
Now you can see it
Historically, understanding a client’s DPO meant asking a lot of questions:
- “How quickly do you typically pay invoices?”
- “Are you optimizing payment methods for float, rebates, and control?”
- “Are you leveraging flexible terms or just sticking to default payment schedules?”
- “Are you using cards? Early-pay programs?”
Often, the client didn’t have the answers, or if they did, the data was anecdotal. This left banks with limited visibility, and even less ability to intervene with timely, tailored recommendations.
With Codat, banks can connect directly to their clients’ ERP systems, giving them real-time visibility into:
- Actual payment behavior (not just stated policy)
- DPO trends and changes over time
- Vendor mix, invoice timing, and payment methods
- AP patterns to inform commercial card strategy
Imagine being able to say:
“I see you’re paying 72% of invoices within 12 days, even though 40% of those suppliers offer 30-day terms. That’s tying up about $2.4 million you could redirect into growth or debt reduction. If we move key vendors to card, we can extend DPO without hurting relationships, and give you an additional 30-day float.”
This level of insight turns DPO from a back-office metric into a frontline opportunity and helps Treasury teams position themselves as indispensable strategic partners.
Curious what this could look like for your clients?
Complete the form below to learn how Codat can help you turn DPO insights into growth opportunities, for both you and your clients.
The information and advice provided in this article is for informational and educational purposes only and does not constitute financial advice. The author and our company are not financial advisors, and nothing in this content should be interpreted as professional financial guidance.