Article ID: 849914
When and how is the Average Days to Pay calculated in the Customer Credit Summary window (Cards|Sales|Summary|Credit Summary)?
The Average Days to Pay field is updated when a debit document is fully applied. The average is recalculated as the document is fully applied and unapplied. The check date is always used when calculating the average. The Average Days to Pay (ADTP) is calculated after the first customer invoice has been fully APPLIED. The formula for the calculation is as follows:
(Current ADTP x Number of Paid Invoices) + Number of Days to Pay Invoice Just Paid ______________________________________________________________________
Number of Paid Invoices + 1
*The 'Current ADTP' is the last Average Days to Pay found in the Customer Credit Summary window.
*The 'Number of Paid Invoices' is the number of FULLY applied invoices, but NOT including the invoice just paid.
*The 'Number of Days to Pay Invoice Just Paid' is the check date minus the invoice date for the last invoice and check.
EXAMPLES: Assume that NO other invoices have been entered into Receivables yet. The invoices are being entered into Receivables in the other that they are given. All of the checks were entered in Cash Receipts (Transactions|Sales|Cash Receipts).
Invoice Date Check Date # of Days to Pay Calculation ADTP
1) 5/23/97 6/1/97 9 ((0x0) + 9) / 0+1 9
2) 6/1/97 9/1/97 92 ((9x1) + 92) / 1+1 50
3) 7/1/97 7/21/97 20 ((50x2) + 20) / 2+1 40
4) 4/1/97 6/15/97 75 ((40x3) + 75) / 3+1 48
Notice that in 1) the 'Number of Paid Invoices' used in the calculation is zero. That is because this is the first invoice being paid. When 2) was entered, there is now 1 paid invoice, so the calculation uses 1, NOT 2. The paid invoice is NEVER included in the number of paid invoices. Also, the ADTP result from the previous invoice is used in the calculation of the invoice which follows.
NOTE: The '"Number of Paid Invoices'" is a field in the Customer Summary window (Cards|Sales|Summary) that can be edited. This field also has values for Year-to-Date and Life-to-Date . The Average Days to Pay field on the Customer Credit Summary window (Cards|Sales|Summary|Credit Summary) can also be edited. Changing the number in EITHER one of these two fields will change the calculation of the next paid invoice. If the Year-to-Date value for the 'Number of Paid Invoices' is changed, it will NOT affect the Life-to-Date value and calculation. The following is an example: Before entering the next transaction, I accidently changed the Year-to-Date field for the 'Number of Paid Invoices' from 4 (the number of invoices fully paid from above) to 10. Here is the result:
5) 10/1/97 10/3/97 2 ((48x10) + 2) / 10+1 43
Notice that the 'Number of Paid Invoices' used in the calculation is now 10 rather than 4. If I hadn't changed the field, the calculation would have been: ((48x4) + 2) / 4+1 = 38
This article was TechKnowledge Document ID: 175