What is “Dynamic Discounting”?

Think of it as a discount window that closes as the days go by. On day one the discount is at its maximum and as time elapses the discount reduces accordingly, as demonstrated below.

Static vs Dynamic Discounting

Static Discounting

Example: 30 days less 5% allows a buyer to pay on day 29 and take a 5% discount. Worse, many buyers pay late and still take the discount.

Dynamic Discounting

Time-based, reduces as the discount window closes. In the diagram below, an invoice with 30 days less 5% terms settled on day 9, would attract a discount of 3.67% or on day 20, only 2%.

Buyers want to take discounts as early as possible to maximise returns. Suppliers have the option to receive payment when best suited to their cash flow needs.

B’yond embraces a hybrid approach that offers both dynamic discounting and supplier finance over the same platform enabling buyers to use both methods seamlessly according to their strategic needs.