Early Payment Discount Calculator
Evaluate the cost-benefit analysis of offering early payment discounts to encourage faster payments
Understanding Early Payment Discounts
Early payment discounts are incentives offered to customers who pay their invoices before the standard payment terms. They can help improve cash flow and reduce the cost of carrying accounts receivable.
Common Discount Types:
- Standard (e.g., 2/10 Net 30)
- Custom (e.g., 1% for payment within 10 days)
- Non-bucketed (linear decrease from day 1 to net term)
Best Practices:
- Align discount periods with your cash flow needs
- Consider your cost of capital when setting rates
- Monitor impact on profit margins
Calculate Your Discount
Enter your invoice details to calculate discount impact