Early Payment Discount Calculator
See what a 2/10 net 30 discount is really worth
See how it works CRM Business Hub → - Payment Terms Explained: Net 30, Net 60 and 2/10 Net 30 Net 30 means the full amount is due 30 days after the invoice date. A table of common terms, worked examples with real d...
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About this tool
An early payment discount looks small on the invoice: 2 % here, 3 % there. Behind it sits a very high interest rate. This calculator shows you what you save, what you pay, by when, and whether paying early beats keeping the cash.
The discount amount is the invoice amount times the discount rate. The amount with discount is the invoice amount minus that discount. The discount deadline is the invoice date plus the discount days; the final due date is the invoice date plus the net days.
The effective annual rate compares the discount with the extra days you would get by paying late. In plain words: divide the discount rate by what is left after the discount (100 minus the rate), then multiply by 365 and divide by the days between the discount deadline and the net due date.
Example: an invoice of 5,000 EUR dated 1 March with terms 2/10 net 30. The discount is 100 EUR, so you pay 4,900 EUR by 11 March instead of 5,000 EUR by 31 March. Those 20 extra days cost you 100 EUR, which is an effective annual rate of about 37.2 % (2 / 98 x 365 / 20). Unless your money earns more than that, or your credit line costs more, taking the discount is the better deal.
On the other side of the table, the same figure tells you what an early payment discount costs you as the seller - and whether faster cash is worth it for your business.
How to use it
- 1 Enter the invoice amount.
- 2 Enter the discount in percent, for example 2.
- 3 Enter the discount days and the net days from the payment terms, for example 10 and 30.
- 4 Add the invoice date to see both deadlines as dates.
- 5 Read the discount, the amount to pay and the effective annual rate.
- 6 Compare the rate with your financing costs to decide whether to pay early.
What you get
- Discount and amount to pay in one step
- Discount deadline and net due date as real dates
- Effective annual interest rate of every discount offer
- A clear answer whether paying early pays off
- Works for buyers and for sellers setting payment terms
CRM Business Hub Do it for every case with CRM Business Hub
Calculate one discount here – then send invoices with clear payment terms and automatic reminders from CRM Business Hub.
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