PAYDEX Score

PAYDEX is D&B's dollar-weighted payment score, built entirely from trade experiences that suppliers report. A score of 80 means the business pays, on average, exactly on terms. Scores above 80 indicate early payment (100 means paying roughly 30 days early); scores below 80 indicate lateness — 70 corresponds to about 15 days beyond terms, 50 to about 30 days late, and scores in the 20-40 range indicate serious slowness of 60-120 days. Because it is dollar-weighted, one large slow-paid account can move the score more than several small prompt ones.

PAYDEX measures behavior, not capacity. It says nothing about profitability, leverage, or whether the company can survive a downturn — only how it has treated reporting suppliers recently. That makes it a useful early-warning indicator (payment behavior usually deteriorates before a failure) but also gameable: a business can pay a handful of reporting vendors promptly while stretching everyone else. D&B typically needs at least two or three trade experiences to generate a score at all, so young and small businesses often have no PAYDEX or one based on very thin data.

In practice, use PAYDEX three ways: as a screening threshold on new accounts (many policies treat 75+ as acceptable, 50-74 as requiring review), as a trend alert on existing accounts (a drop from 78 to 62 in a quarter is actionable regardless of level), and as corroboration against your own aging — if a customer pays you 20 days late but shows PAYDEX 80, you are being singled out, which is worth understanding.