Bill Discounting Proceeds Calculator

Work out bill discounting proceeds instantly with clear inputs, formula shown and shareable results.

About Bill Discounting Proceeds Calculator

Discounting a bill converts a future receivable into cash today, less interest for the unexpired period and a collection commission. Annualising the total charge on the proceeds actually received gives the true cost of the funding.

Formula

Bill discounting

Proceeds = bill - bill×rate×days/365 - commission; effective cost annualises charges on proceeds

Worked example

With the default values below, Bill Discounting Proceeds Calculator returns Net Proceeds Received of $4,874,486.30. Change any input above and every figure here is recalculated in your browser.

Inputs used

Bill Amountminimum 0: 5,000,000
Discount Rateaccepts 0–40 %: 11 %
Days To Maturityaccepts 1–365: 75
Collection Commissionaccepts 0–3 %: 0.25 %

Results

Net Proceeds Received: $4,874,486.30
Discount Charge: $113,013.70
Commission: $12,500.00
Effective Annualised Cost: 12.5312%

Step by step

1Values used
2Bill discounting
3Net Proceeds Received= 4,874,486.30
4Discount Charge= 113,013.70
5Commission= 12,500.00
6Effective Annualised Cost= 12.5312

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

Frequently Asked Questions

Why is the effective cost above the discount rate?

Because the commission is a flat charge and the cost is measured on the smaller amount actually received.

Who bears the risk if the drawee does not pay?

Under recourse discounting the drawer does; without recourse the bank does, at a higher price.