B2B Payments Content

The state of dynamic discounting in B2B payments

There is no argument that the demand for early payment on invoices is as strong as ever — that is to say, if you have invoices to generate. In the coronavirus era, many businesses have lost significant revenue. For example, businesses serving the U.S. hotel & food-services industry have shed 40% of jobs from January to May, and received only 8% of the government’s small business loans.

Many see early pay via dynamic discounting as a win-win — help suppliers get cash, and buyers manage cash at much better yields than alternatives.

For suppliers, it’s easy to present the advantages to make a yes/no decision — get paid early with a known discount, predictable cash flow and don’t worry about onboarding hurdles that most supply chain finance programs are burdened with.

But let’s explore the supply-side for a second. There are a number of factors at play in a COVID-19 world, some favorable and some not-so-favorable, that make one pause for consideration.