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Supply Chain Finance Discount Calculator

Work out supply chain finance discount instantly with clear inputs, formula shown and shareable results.

About Supply Chain Finance Discount Calculator

Supply chain finance lets a supplier be paid early at a discount priced off the buyer's credit standing, which is usually stronger than its own. The effective annual cost is the correct comparison against the supplier's own borrowing rate.

Formula

Early payment discount

Discount = invoice × rate × days early / 365; effective cost annualises charges on the amount received

Worked example

With the default values below, Supply Chain Finance Discount Calculator returns Amount Received Early of $5,938,520.55. Change any input above and every figure here is recalculated in your browser.

Inputs used

Invoice Valueminimum 0
6,000,000
Days Paid Earlyaccepts 1–180
45
Annual Discount Rateaccepts 0–30 %
7.5 %
Platform Feeaccepts 0–2 %
0.1 %

Results

Amount Received Early
$5,938,520.55
Discount Given Up
$55,479.45
Platform Fee
$6,000.00
Effective Annual Cost To The Supplier
8.3972%

Step by step

  1. 1Values used
  2. 2Early payment discount
  3. 3Amount Received Early= 5,938,520.55
  4. 4Discount Given Up= 55,479.45
  5. 5Platform Fee= 6,000.00
  6. 6Effective Annual Cost To The Supplier= 8.3972

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 or tax 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 it cheaper than the supplier's own borrowing?

Because the credit risk priced is the buyer's, not the supplier's, and the payment obligation is already approved.

Does it affect the buyer's balance sheet?

It can. If terms are extended materially, the arrangement may be reclassified as borrowing rather than trade payables.

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