Latest / Cash Flow Conversations with Fexingo: Working Capital, Receivables, and Small Business Finance
How Dynamic Discounting Beats Static Early Payment Discounts
Most small businesses offer a standard '2/10 net 30' early payment discount and never change it. In this episode, Lucas and Luna explore why static discounts leave money on the table and how dynamic discounting — where the discount shrinks as the payment date gets closer — actually aligns incentives better. They walk through a specific example: a $50,000 invoice where a buyer can choose to pay in 10 days for a 0.5% discount or in 20 days for 0.25%, and how the seller's cost of capital determines the optimal sliding scale. The hosts also share a real-world case from a mid-sized…
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