Q: What is Dynamic Discounting?
A: Dynamic Discounting is a form of early invoice payment to suppliers, provided by buyers.
The buyer pays its supplier early in exchange for a discount on the invoice amount. The
discount itself is “dynamic;” that is, it’s calculated daily based on how many days early the
invoice is paid.
Q: What are the benefits of Dynamic Discounting for a supplier?
A: For a supplier, dynamic discounting can provide an affordable form of short-term working
capital from the buyer itself. Compared to other sources of working capital like loans or bank
lines, this form of early payment is fast, usually hassle-free, digital, and does not require
Q: What are the benefits of Dynamic Discounting for a buyer?
A: By deploying its excess capital to pay suppliers early, buyers can earn a discount on invoices
— thereby reducing their costs. Additionally, Dynamic Discounting can help to strengthen the
buyer’s supply chain by providing its suppliers with a source of working capital.
Q: Why doesn’t my customer offer Dynamic Discounting?
A: Not all buyers offer Dynamic Discounting to their suppliers, and many lack the technology to
do so. Among those that do, buyers don’t always have the capital to continuously fund their
Dynamic Discounting program. As a result, buyers may choose to target Dynamic Discounting
to only select suppliers, or for a limited period of time, or not offer it to any.
Q: Who is eligible for Dynamic Discounting?
A: Supplier eligibility for Dynamic Discounting is determined solely by the buyer. Some buyers
offer programs to all suppliers, some offer it to only a subset of suppliers, and some don’t offer
Dynamic Discounting at all. Also, availability may be sporadic, as buyers may not always have
excess cash to use for supplier early payment.
Q: Is Dynamic Discounting the same as 2/10 net 30?
A: No. 2/10 net 30 (and similar plans) refer to an offer by the supplier to accept a 2% discount
on the invoice if it’s paid within 10 days, with the entire invoice due in 30. Dynamic Discounting
differs in two key ways: First, it’s offered by the buyer to the supplier, not the other way
around. Second, the amount of the discount varies based on how many days early the invoice
is paid, which is why it’s called “Dynamic” Discounting.