Calculating Avg Days to Pay: Which formula to use? I want to find the average days to pay for a client based on last year's many invoices. Nearly all of them are paid.
Most formulas for this activity rely on outstanding amounts for the client. In this scenario, is there any reason I wouldn't just figure out the difference between bill and paid dates rather than using something more sophisticated? Also, generally speaking, why wouldn't I use the difference between bill and pay dates every time - what is the benefit of a more sophisticated formula using amounts outstanding?
If there is a better stack to use for this question, please let me know.

The average to use should reflect your purpose in averaging.
You might be evaluating policies for a particular customer, who has paid late in the past, Perhaps you are considering whether to continue offering them 30-day payment terms, or to insist that they pay cash upfront.
You might make that decision based on their unweighted average time to pay in the last year. Or if their extra approvals for payments over $10,000 is an issue, you might average just the payments over that amount. Or you might look at their 75th percentile or maximum payment time instead.
By contrast, you might be evaluating your overall needs for cash reserves given that payments are not immediate.
In that case, you might take the weighted average of payment times over all invoices, weighted by the invoice amounts. Then you can identify which customers contribute the most to that average using the corresponding weighted average of payment times for each customer.
