Discount Flow · Dynamic Discounting
Dynamic discounting software. No Cost Enterprise Plan.
A supplier offers a small discount on an invoice. The buyer accepts in one click and pays days or weeks early. Both parties get an e-signed Confirmation Receipt. No fees, no minimums, no bank required — the agreed amount moves between the parties directly.
In one sentence
Dynamic discounting is a documented arrangement where a buyer pays a supplier's invoice early in exchange for a proportional discount — the earlier the payment, the larger the discount the supplier offers.
How it works
Four steps from offer to settled invoice.
- 01
Supplier sends an offer
Set the discount rate (e.g. 2%) and a payment window (e.g. 10 days). Attach the invoice. Send.
- 02
Buyer reviews
Email lands with clean terms: pay $9,800 in 10 days instead of $10,000 in 60 days. The Est. Annual % is shown alongside.
- 03
One-click acceptance
No login required for the buyer's first transaction. They accept; the agreed amount is locked in.
- 04
Direct settlement
Buyer pays the supplier directly via their normal payment channel. Both parties get an e-signed Confirmation Receipt.
The maths
How the Est. Annual % is computed.
For a dynamic-discount offer, the Est. Annual % the calculator shows you is:
(Discount ÷ (1 − Discount)) × 365 ÷ (Days accelerated − 2)2% discount
27 days early
~29% annualized
1.5% discount
20 days early
~30% annualized
1% discount
14 days early
~31% annualized
Worked examples of how the formula computes — not a promise of any return. Whether a particular discount is appropriate for any specific transaction is solely the parties' decision.
For suppliers
- Get paid in 48 hours instead of 30–90 days
- No debt, no credit check, no bank approval
- No third party collects from your customer
- No Cost Enterprise Plan — no transaction fees
- Set your own discount rate and expiry window
- Full audit trail with e-signed PDF confirmation
For buyers
- Document a discount you and your supplier agreed on
- See the Est. Annual % the offer computes to alongside the discount
- Strengthen supplier relationships and supply chain resilience
- No bank, no complex programme setup
- Live in under a day — no ERP integration required
- Transparent terms — both parties see exactly what they're agreeing to
Dynamic discounting savings
What a dynamic discount is worth: a worked example.
A buyer has $2,000,000 of approved invoices on 60-day terms. Its suppliers offer a 1.5% discount for payment 20 days early. The discount on those invoices comes to $2,000,000 × 1.5% = $30,000, and the Est. Annual % works out to about 30%.
Illustrative arithmetic only, not a promise of savings or return. The parties set every discount and payment date themselves.
Try the dynamic discounting calculatorWhat to look for in dynamic discounting software.
Whether you compare providers or build a spreadsheet process, check these five things first.
- Who funds the early payment? With dynamic discounting it is the buyer's own cash. If a bank or funder is involved, you are looking at supply chain finance.
- What does it cost? Look for per-transaction fees, subscription fees and fees that only apply when a deal closes.
- Is there a minimum invoice size? Some programmes only suit large suppliers. Smaller suppliers are often left out.
- How long does setup take? ERP integrations can add months. Software that works alongside your existing payment process can be live in a day.
- Do both sides get a record? An agreed discount should leave an audit trail both parties can open later.
Frequently asked questions
What is dynamic discounting?
Dynamic discounting is a documented commercial arrangement where a buyer pays a supplier's invoice before the due date in exchange for a proportional discount. The discount is 'dynamic' because it scales with how many days early the payment is made.
How is the Est. Annual % computed?
The Est. Annual % shown alongside every offer is computed as discount% × 365 ÷ (days accelerated − 2). It's an illustrative figure derived from the discount rate and term the parties select — not a promise of any return.
Is Discount Flow's No Cost Enterprise Plan really at no cost?
Yes. The Discount Flow product is covered by the No Cost Enterprise Plan — no transaction fees, no subscription, no minimum. The Profit Flow product (Refundable Customer Deposits) uses a separate monthly tier fee model based on volume.
What's the minimum invoice size?
There is no minimum invoice size. The tool requires a minimum offer amount of $500 to ensure the economics are worthwhile for both parties.
What is dynamic discounting software?
Dynamic discounting software lets a supplier and a buyer agree, document and track an early-payment discount on an approved invoice. Discount Flow is software, not a lender or a marketplace: the two parties agree the terms, the buyer pays the supplier directly, and both receive a Confirmation Receipt.
How much can a buyer save with dynamic discounting?
It depends on the discount the two parties agree and how early the payment is made. As plain arithmetic, a 1.5% discount on $100,000 of invoices is $1,500. The Est. Annual % shows how that discount compares with the number of days paid early. It is an illustrative figure, not a guaranteed return.
How is dynamic discounting different from supply chain finance?
Supply chain finance usually involves a bank or funder paying the supplier early and the buyer repaying the funder later. Dynamic discounting uses the buyer's own cash and a discount the two parties agree, so no third-party funder is involved.
What should I look for in a dynamic discounting provider?
Check who funds the early payment, what fees apply, whether there is a minimum invoice size, how long setup takes, and whether both sides get a documented record. Discount Flow uses no third-party funder, charges no transaction fees on the No Cost Enterprise Plan, sets no minimum invoice size, and issues a Confirmation Receipt to both parties.
Related topics
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