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Average Days to Pay Calculation in Customer Maintenance

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Summary

This article explains how Customer Maintenance calculates Average Days to Pay and Average Days Overdue. The calculations use the most recent 20 invoices processed during the Cash Receipts Journal update

Resolution

Calculation overview

Note: This information is also available in the online Help screens. Use the Index search and enter "calculating average days paid".
The system performs the following calculations in the order shown for each invoice processed during the Cash Receipts Journal update.
The calculations use the most recent 20 invoices. This limit prevents the total invoice count and total days from becoming too large.

Average Days to Pay (ADP)

Field definitions

  • NOI = Number of invoices used in the calculation.
  • NOI ranges from 0 to 20.
  • ADP = Average Days to Pay.
  • ADP measures the days between the invoice date and posting date.

Field locations

Versions 3.71 through 4.05
  • AR1 file
  • Field 1
  • Starting Position 316
  • Length 3
Version 4.10 and later
  • AR_Customer file
  • Field 49

Formula

ADP = ((Previous ADP × Previous NOI) +
      (Posting Date - Invoice Date))
      ÷
      (Previous NOI + 1, limited to 20)
Where:
  • Previous ADP × Previous NOI = Total days for the previous invoices.
  • Posting Date - Invoice Date = Days for the current invoice.
  • Previous NOI + 1 = Updated invoice count, limited to 20.

Average Days Overdue (ADO)

Field definitions

  • ADO = Average Days Overdue.
  • ADO measures the days between the due date and posting date.

Field locations

Versions 3.71 through 4.05
  • AR1 file
  • Field 1
  • Starting Position 319
  • Length 3
Version 4.10 and later
  • AR_Customer file
  • Field 50

Formula

ADO = ((Previous ADO × Previous NOI) +
      (Posting Date - Due Date))
      ÷
      (Previous NOI + 1, limited to 20)
Where:
  • Previous ADO × Previous NOI = Total overdue days for previous invoices.
  • Posting Date - Due Date = Overdue days for the current invoice.
  • Previous NOI + 1 = Updated invoice count, limited to 20.

Number of invoices (NOI)

Field definition

NOI represents the number of invoices included in the ADP and ADO calculations.

Field locations

Versions 3.71 through 4.05
  • AR1 file
  • Field 1
  • Starting Position 322
  • Length 3
Version 4.10 and later
  • AR_Customer file
  • Field 48

Formula

NOI = Previous NOI + 1
The system limits NOI to a maximum value of 20.

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