All business decision tools
Should you use cash to take the supplier’s discount?
Compare the invoice discount with the financing cost of paying earlier.
Example scenario
Editable demonstration inputs, not verified industry benchmarks. Enable JavaScript to calculate your own scenario.
- Invoice face value
- $100,000
- Early-payment discount
- 2 %
- Discount payment day
- 10 days
- Normal payment day
- 30 days
- Annual financing cost
- 12 %
Net benefit of paying early
Example result only, not a forecast or promise.
- Discount captured
- $2,000
- Financing cost of earlier cash use
- $644
- Simple annualized discount return
- 37.2%
What to do with this result
Check liquidity covenants and payment eligibility; the annualized simple return is a comparison aid, not a deposit yield.
Know what is inside the model.
Planning model, not personalized financial advice. Your inputs remain in your browser.
Calculation method
Financing cost = discounted invoice cash × annual financing rate × days accelerated / 365. Net = invoice discount − financing cost.
Assumptions and limitations
- Example inputs are editable scenarios, not Aryo results or independently verified industry benchmarks.
- Demand, lead times and service levels are scenario inputs. Validate variability, physical constraints and supplier terms before ordering.