Early Payment Discount Optimizer

Find out whether paying a supplier early to claim the discount beats keeping your cash or borrowing to fund the payment. This tool turns the offer into a rate you can compare.

3-minute tool
Free in your portal

Use the calculator

Financing Decisions

$9,600Beats financing

Annual savings from the discount

37.24%Effective annualized rate

$26,667Capital to pay early

$480,000Annual supplier spend

Paying 20 days early for a 2% discount returns 37.24% annualized, above the 12% cost of financing.

What you get

Whether the early-payment discount is worth taking

A discount for paying early instead of at term looks small until you annualize it. From your monthly supplier spend, standard terms, discount terms, and discount percentage, this tool shows the effective annualized return on paying early. Then it shows whether that return beats the cost of the financing you would use to fund the payment, or the yield on holding the cash.

Converts the discount offer into an annualized rate you can compare
Weighs paying early against your cost of borrowing or keeping the cash
Scales the decision across your monthly supplier spend

The tool

Run your numbers

Portal preview. See the full tool below. Sign up free to use it and every tool in your portal.

Early payment discount

Should you take the early-payment discount?

Terms like 2/10 Net 30 pay you to settle early. See the annual savings, the effective annualized rate, and whether it beats the cost of financing.

Monthly supplier spend · What you pay this supplier each month.

Standard terms · Net days you'd normally pay in.

days

Discount terms · Pay by this day to earn the discount.

days

Discount offered · e.g. 2% for 2/10 Net 30.

Need financing to pay early? · Whether you'd borrow to capture the discount.

Loading…

More financing decisions tools

CalculatorFree tool

Industry Financing Solution Matrix

Choose your industry and see which financing structures actually fit it. Each option is ranked by fit, with a typical cost range and how long it takes to fund.

2-minute tool · Free, no signupOpen

CalculatorPortal toolPortal

True Cost Comparison Calculator

Put every financing option side by side and rank them by true annualized cost, so factoring, a bank loan, an MCA, a card, ABL, and a line of credit compare apples-to-apples.

5-minute tool · Free in your portalOpen

CalculatorPortal toolPortal

Working Capital ROI Calculator

Enter the capital you plan to deploy, what the financing costs, and the return you expect from it, whether that is an early-payment discount, growth, or a large order. See whether the move actually pays.

4-minute tool · Free in your portalOpen