Dynamic Discounting: Backdrop, Definitions, and Enablers [PRO]
With the launch of Trade Financing Matters yesterday, we thought it would be appropriate to double-click on one of the timeliest topics in receivables and payables finance: dynamic discounting. Note that by receivables financing we mean the selling or other leveraging of â€śreceivablesâ€ť as an asset on a supplying organizationâ€™s balance sheet to receive early payment. By payables financing, we mean the financing of early payment by a third-party (or the buying organizationsâ€™ balance sheet). In todayâ€™s analysis, with the input of David Gustin, Trade Financing Mattersâ€™ Managing Director, weâ€™ll discuss how dynamic discounting can reduce risk and create greater liquidity in the supply chain. If youâ€™re in procurement or accounts payable and are new to the topic, this brief will be a useful first step in understanding what dynamic discounting is, how it can help, and which technologies and technology vendors can enable it.