The creators of
found that supply chain
buyers often under-estimate the demand for prompt
payment, a basic misunderstanding that may lead
you and many large supply chain buyers to ignore or
overlook lucrative discounting opportunities that
occur late in the payment cycle.
Traditionally, suppliers have obtained supply chain
and working capital financing from a variety of
bank and non-bank lenders. Credit facilities may
be restrictive, costly and unreliable. Suppliers that
are unable to obtain sufficient external financing
place your supply chain at risk.
reliable alternative for your suppliers that gives your
company greater supply chain control and income
opportunities previously reserved for lenders.
On average, short-term borrowing rates for well-
capitalized Fortune 500 companies are currently
less than 3% per year. Cash equivalents earn less
than 1% per year. Using cash, near-cash investments,
or short-term borrowings to finance the early
retirement of your trade payables at a discount
creates annualized returns of 10% to 20% on your
investment (net of your cost of short-term funds)
and millions of dollars annually of incremental net
Discounting trade payables never made more sense
than it does today. Payable discounting has no
adverse effect on your liquidity or leverage ratios
whether you use cash or short-term debt to fund the
early retirement of your accounts payable.
is also currency-neutral, so it is perfect for
your company or its subsidiaries with suppliers in
foreign countries where access to credit and capital
markets is scarce.
OF SUPPLIERS STATE
A WILLINGNESS TO
OCCASIONALLY OR ALWAYS
ACCEPT DISCOUNTS FOR