Work out supply chain finance discount instantly with clear inputs, formula shown and shareable results.
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.
Early payment discount
Discount = invoice × rate × days early / 365; effective cost annualises charges on the amount received
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 credit risk priced is the buyer's, not the supplier's, and the payment obligation is already approved.
It can. If terms are extended materially, the arrangement may be reclassified as borrowing rather than trade payables.