Dynamic Discounting
Dynamic Discounting is the early payment of supplier invoices in exchange for a sliding scale discount based on the due date of an invoice.
Dynamic Discounting can be funded internally using excess cash or a bank facility or a mixture of the two to achieve a balance sheet neutral arrangement.
Typical returns using internal funding are 12-14% APR, which is a big improvement on the returns treasury acheive investing cash in overnight money markets and other short term instruments.
The cost of cash for suppliers is far cheaper than factoring and and other forms of financing, so Dynamic Discounting is a rare example of a genuine win-win scenario.
The Dynamic Discounting Portal provides suppliers with additional benefits like being able to view the status of their invoices online, upload invoices using PO flip, online forms or file upload, manage disputes. and master data maintenance. Accounts Payable benefit by receiving less telephone calls, a reduction in the volume of paper invoices and audit trails for disputes.
Our solution provides all the tools and services you need to acheive a successfull Dynamic Discounting program including:
- SAP Certified Supplier Portal
- Treasury module to manage liquidity limits
- Supplier On-Boarding Service
- Banking facilities
- Optimisation
Go to our How it Works page for more details or Contact us to discuss how to build a business case for Dynamic Discounting in your organisation.