I believe it is based on all the paid invoices on file for that customer.   The Customer Inquiry window displays a value in the 'Avg days to pay' field to represent the average number of days it takes that customer to pay an invoice.  To reconcile the number shown:

1. Run a Payment Analysis Report for  All Transactions to display all available invoice information.
2. Add up all of the numbers in the 'days' column of the customer in question that do not have asterisks (these are the open invoices and are not included in the average days to pay calculation).
3. Divide by the total number of invoices that have "something" showing in the days column (excluding open invoices, but including the one's where days=0). The result of this should be the average days to pay figure plus or minus one day due to rounding.

Thanks for the response.  I tried some calculations to see if this is the case.  I'm not sure if I'm not calculating correctly or if this is not the accurate length of time used to calculate the average pay days shown in customer inquiry.

I ran a payment analysis report showing all transactions.  I added only the paid invoices and divided by the number of paid invoices.  The result matches the total shown on the report labeled customer totals based on payments in full.  However, customer inquiry shows a number 5 days more than my calculation.

I think I might have found the answer.  I ran a "summary" payment analysis report and checked the average shown over the last six months.  This figure is the same (give or take a day) as the figure shown in customer inquiry.  I assume this is correct.  If anyone else finds something different, please let me know.