Latest / Cash Flow Conversations with Fexingo: Working Capital, Receivables, and Small Business Finance
How Dynamic Discounting Replaced Net-30 at One Supplier
In episode 73 of Cash Flow Conversations, Lucas and Luna explore dynamic discounting through the lens of a mid-sized industrial supply company, Allied Components. Facing a cash crunch from Net-60 terms demanded by a major buyer, Allied offered a sliding-scale discount for early payment — 2 percent off for paying in 10 days, 1 percent for 20 days, full price at 30. The result? Within six months, 40 percent of invoices were paid in 10 days or fewer, and Allied shaved 12 days off its average receivables cycle. Lucas breaks down the math: a 2 percent discount for 20 days early equates to an…
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