Leveraging certain virtual card programs for electronic payments enables buyers to instantly extend their Days Payable Outstanding (DPO), a measure of the time it takes a business to pay its suppliers, without changing their payment terms.
In this scenario, the funding for the payment program is provided by the buyer’s bank via card. Buyers are cashing in on the fact that the payback period to the card issuing bank kicks in once payment is initiated, an average DPO increase of 22 days, per the Institute of Finance and Management (IOFM).
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