How this calculation works

• Working capital effect is estimated as annual supplier spend divided by 365, multiplied by the change in payment days.
• Moving from shorter to longer payment terms improves buyer cash flow but may increase supplier relationship risk.
• Moving from longer to shorter payment terms reduces buyer cash-flow benefit but may support supplier relationships.
• Average affected spend per supplier is calculated by dividing affected annual supplier spend by the number of suppliers entered.
• This is a practical estimate, not financial advice. Actual impact depends on invoice timing, contract wording, supplier agreement and payment behaviour.