The Benefits of Dynamic Discounting

How does Dynamic Discounting work?

Juliette: "Dynamic Discounting works like this: as an organisation, you can choose to pay your suppliers' invoices before the contractual due date. In return, suppliers offer discounts for early payment, usually a percentage of the invoice amount. The amount of the discount depends on how early the company pays the bill. The earlier the payment, the higher the discount."

The benefits

Juliette lists the benefits of Dynamic Discounting for your company:

1 | Improved cash flow

"By paying early, an organisation receives discounts and saves money on invoices. Moreover, this also allows organisations to benefit from shorter payment terms and reduction in outstanding debts. In short, it can improve your cash flow."

2 | Stronger relationships with suppliers

"Dynamic Discounting helps build stronger relationships with suppliers. By paying early, an organisation shows its suppliers that it values and supports them. This creates more trust and loyalty between the two parties. This is conducive to smoother collaborations and better conditions for future transactions."

"This is conducive to smoother collaborations and better conditions for future transactions."

- Juliette Juffermans, Business Analyst | ISPnext

3 | Improved Procurement Processes

"Dynamic Discounting helps buyers improve procurement processes. By paying suppliers early, goods and services can be managed more efficiently. This provides an improvement in the quality of service and therefore also in customer satisfaction."

4 | More efficient financial processes

"Dynamic Discounting is also relevant for organisations looking to digitise and automate their financial processes. Using cloud software and other digital tools enables you to streamline processes and have more control of spending. This creates better transparency, the risk is manageable and it will increase operational efficiency."

Juliette concludes: "So by receiving discounts in exchange for early payment, you do not only improve cash flow but also the relationship with your supplier, the procurement process and operational efficiency. It’s quite an interesting and risk-free return!"