Supplier Payment On-Time Rate
Percentage of supplier invoices paid within agreed payment terms
What is Supplier Payment On-Time Rate?
Supplier payment on-time rate is the percentage of supplier invoices paid by their due date. It shows how reliably a business meets its payment commitments.
Paying on time builds trust with suppliers and can avoid late payment charges, and it is often a legal or contractual duty.
How this KPI is measured
- Function
- Finance
- Sub-function
- Accounts Payable
- Industry
- All Industries
- Type
- Lagging
- Impact
- Financial control
- Unit
- %
- Measurement frequency
- Monthly / Quarterly
- Formula
- (Invoices paid on time / Total invoices due) × 100
How to calculate it
Divide invoices paid on time by total invoices due, and multiply by 100.
For example, if 1,850 of 2,000 invoices due were paid on time, the rate is 92.5%.
Measure against the agreed due date, and also look at value-weighted results and at critical suppliers.
Where it is used
Protecting supplier relationships
Keep suppliers confident.
Meeting legal duties
Comply with prompt payment rules.
Finding process delays
See where invoices stall.
How to improve it
Tips and common mistakes
- Late payment can hurt small suppliers badly.
- Follow late payment regulations that apply to you.
- Separate genuine disputes from process delays.
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