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Are longer supplier terms worth a higher purchase price?
Compare the annual price premium with the funding benefit of extra payable days.
Example scenario
Editable demonstration inputs, not verified industry benchmarks. Enable JavaScript to calculate your own scenario.
- Annual affected supplier purchasing
- $3,000,000
- Current payable days
- 30 days
- Proposed payable days
- 60 days
- Purchase-price increase for longer terms
- 1 %
- Annual marginal funding cost
- 12 %
Annual financing benefit net of price premium
Example result only, not a forecast or promise.
- One-time base purchasing cash released
- $246,575
- Annual funding-cost benefit
- $29,589
- Annual purchase-price premium
- $30,000
What to do with this result
Check price timing, supplier resilience and actual credit capacity; the one-time cash release is not recurring profit.
Know what is inside the model.
Planning model, not personalized financial advice. Your inputs remain in your browser.
Calculation method
Base purchasing cash released = annual purchasing × extra payable days / 365. Annual funding benefit = cash released × funding rate. Net = funding benefit − annual purchasing × price premium.
Assumptions and limitations
- Example inputs are editable scenarios, not Aryo results or independently verified industry benchmarks.
- Planning scenarios are not lending, investment, tax or legal advice. Rates, prices, probabilities and transaction terms are supplied assumptions.