A days beyond terms (DBT) figure is calculated:
For a month
This DBT figure is used for the drill-down by period.
For the last 12 months, including the current month
This DBT figure is used on the KPI tile and in the drill-down by customer.
The formula for calculating a DBT figure is: DBT = [sum (payment amounts x days in arrears)] / [sum (payment amounts)].
Payment amounts must be cleared.
Note
Days in arrears can be within terms (early) or beyond terms (late). If a payment is within terms, days in arrears is a negative number. For more information, see Calculation of Days in Arrears.
The examples below show how a DBT figure is calculated for a payment that is made within terms and a payment that is made beyond terms.
Example 1: Payment is made beyond terms:
1000 should have been paid by April 30
1000 is paid on May 2
Days in arrears = 2
Payment is Beyond Terms
DBT = [sum (payment amounts x days in arrears)] / [sum (payment amounts)]
DBT = (1000 x 2) / 1000 = 2
Example 2: Payment is made within terms:
1000 should have been paid by April 30
1000 is paid on April 25
Days in arrears = -5
Payment is Within Terms
DBT = [sum (payment amounts x days in arrears)] / [sum (payment amounts)]
DBT = (1000 x -5) / 1000 = - 5
To calculate the DBT for all payments that are made within and beyond terms within one month:
The payment amounts are multiplied by the respective days in arrears and added up.
The payment amounts are added up.
The result from Step 1 is divided by the result from Step 2.
Example
Two invoices are paid as follows:
Invoice 1: 1000 paid 2 days late
Invoice 2: 50 paid 5 days early
Calculation [sum (payment amounts x days in arrears)]:
2 x 1000 = 2000
-5 x 50 = -250
2000 - 250 = 1750
Calculation [sum (payment amounts)]:
1000 + 50 = 1050
Calculation sum (payment amounts x days in arrears) ]/ [sum (payment amounts)]:
DBT = 1750 / 1050 = 1.666
For information on the Days Beyond Terms app, see Days Beyond Terms.