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How to Start Dynamic Discounting in One Day
You can start dynamic discounting with one supplier and one approved invoice. Pick a relationship, agree a discount and a payment date, accept the offer, pay directly, and keep the confirmation. There is no ERP project, no bank and no credit check to get through first.
Most dynamic discounting programs stall because they start too big. A smaller start is one relationship and a handful of invoices, then a decision about whether to do more.
Before you start
You need three things:
- a supplier you already trade with, with regular invoices on terms of 30 days or more
- cash the buyer can spend earlier than the due date
- a discount the supplier is willing to give, and a date the buyer is willing to pay by
Longer terms leave more days to pay early, so a given discount can be worth more. The parties agree the discount themselves. Discount Flow does not suggest or recommend rates.
The steps
- Choose one relationship. Start with a supplier whose invoices are regular and whose timing matters to them. A first offer on a familiar relationship is easier to get right.
- Work out what the discount is worth. Put the invoice, discount and days early into the calculator to see the amount and the Est. Annual %.
- The supplier registers, attaches the invoice and sets a discount and an expiry window. Registering takes about two minutes.
- The buyer receives an email with the terms and can accept in one click. The buyer does not need to register to accept.
- The buyer starts the transfer of the discounted amount within 48 hours of accepting, by its usual payment method. The money goes from the buyer to the supplier directly.
- Both sides receive an e-signed Confirmation Receipt with the terms, the amount and the date. Keep it with the invoice.
What you do not need
- an ERP integration
- a bank or a credit facility
- a credit application for the supplier
- a minimum invoice size, although the tool asks for a minimum offer amount of $500
After the first invoice
Look at what happened. Did the supplier find the timing useful? Was the discount worth it to both sides? If so, add a second supplier or offer the same supplier more invoices. If not, you have learned that cheaply.
Everything above is illustrative. Every discount, date and payment is a decision for the two companies. For the full picture of how the tool works, see Discount Flow's dynamic discounting software, or read how to choose dynamic discounting software if you are still comparing options.
Frequently asked questions
Do I need to change my ERP or accounting system?
No. Discount Flow works alongside your existing payment process. The buyer pays the supplier by its usual method, and the tool records the agreed terms.
Who starts the offer?
Either side can. In most cases the supplier starts it, by attaching an invoice and proposing a discount and a payment window. The buyer then accepts or declines.
How long does the buyer have to pay after accepting?
The buyer has 48 hours from acceptance to start the transfer.
Who can use it?
Discount Flow is for U.S. trade counterparties only.
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