Do you offer early payment discounts to your customers?

What is a payment discount?

Companies have been offering their customers a discount if they were to make their payments in 15-day net terms.  This is a great way to expedite payments to improve your accounts receivable process.

Have you ever offered a 2% discount to your customers for 15-day net terms?

These discounts should not be offered indiscriminately – There are customers that make payments within this time-period anyway, so offering a discount to these customers will only cost you money with no cash flow benefit.

A payment discount rewards your customers for having good payment behaviors.  It is also a way to convert slower paying clients to fast paying customers, by dangling a financial carrot in-front of their eyes.  Many companies simply do not have the cash-flow to take advantage of this discount by there are many that do.

Payment Discounts by using Invoice Factoring?

You can sell your invoices to a factoring company at a discounted rate for immediate cash.  Rather than giving your customers a 2% discount to get paid in 15 days, you can factor your invoices for about the discount rate you offer to your customers now and get paid in 24 hours.  If you factor your invoices, you can convert all your customers to one-day payers.  Complete our non-binding application and be one step closer to financial freedom.