Today’s working capital needs aren’t static. Supplier cash requirements can change by time of year, business cycle, industry, or even purchase order. And not all invoices get approved in the same number of days. That’s why over the past decade, the Bavelos team invented a range of new early payment methods, known as “Dynamic Discounting”. Properly implemented, these tools can yield 15-25% more savings than traditional early payment programs. At Bavelos, we understand these methods, how and when to use them, and how to quickly and easily transform your supply chain from static to dynamic payment terms.
One Size Doesn’t Fit All
Most payment terms are standard fixed terms like “net 30″ or “net 45″. Traditionally, buyers offer early payment terms such as “2% 10 net 30″ to accelerate cash to suppliers in return for discounts. But not all invoices get approved in under 10 days. And not all suppliers will offer a 2% discount. Our Dynamic Discounting methods solve these challenges by accounting for variations in invoice approval time and helping you get the best terms available from each and every supplier.
- Micro-targeting of payment terms
- Choice of flexible early payment options
- As Soon As Possible Terms (“ASAP”)
- “Pay Me Now” – ad hoc discount offers
Get the Highest Returns on Cash
Leading companies are rapidly finding that early payment discounts are an attractive option for Treasury to invest cash at double digit, risk free returns. A 2% discount for a 20 days cash acceleration is a 36% annualized return. And while not all suppliers offer this level of savings, over 50% of early payment discounts yield better than a 30% return. Bavelos analytics and dynamic discounting methods ensure you have the insight and means to quickly capitalize on this opportunity.