Work out bill discounting proceeds instantly with clear inputs, formula shown and shareable results.
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.
Bill discounting
Proceeds = bill - bill×rate×days/365 - commission; effective cost annualises charges on proceeds
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.
Because the commission is a flat charge and the cost is measured on the smaller amount actually received.
Under recourse discounting the drawer does; without recourse the bank does, at a higher price.