Dynamic Cash Discount

Financing payables or receivables in order to boost working capital performance is easier than ever. Companies on the TBXONE unified commerce network now have multiple options–whether they are buying or selling, cash rich or cash poor. Multiple options when designing a payment strategy–Komodo Cash, TBXFSCM, and Dynamic Cash Discount.

Cash Discount on TBXONE is a deduction initiated by the supplier or buyer in order to pay within a specified time. The seller or provider often refers to the cash discount as a sales discount. The buyer often refers to the same discount as a purchase discount. Cash discount can be either a fixed amount or a percentage of the total invoice. If an invoice for example is due in 30 days, a supplier could offer the buyer a cash discount of perhaps 2% if the invoice is paid within the first 10 days of receipt; in global trade terminology: 2/10 net 30.

What is Dynamic Cash Discount? Both supplier and buyer can set, offer, and negotiate on the cash discount as they prefer. When one party accepts the cash discount it is captured by early payment of the remittance note (RN).  TBXONE offers a flexible cash discounting approach, where supplier and buyer can accelerate early payment, e.g., 2/5 net 30 or 2/30 net 30.

Not taking advantage of cash discount of 2/10 net 30 is equivalent to paying the supplier an interest rate of 2% over 20 days, which equals a 36% effective annual interest rate. Due to cash-flow pressure, buyers do not accepting cash discounts, though suppliers treat buyers that pay earlier or on time far better than ones who need to be reminded of past due amounts. TBXONE Cash discount is FREE to use before releasing the invoice to the buyer. To start benefiting your business, register or login to TBXONE.

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