Early Payment Discount Calculator
Discover the hidden value in your vendor payment terms. Calculate potential savings from capturing early payment discounts.
Early payment discounts like 2/10 Net 30 can yield an annualized return of 36% or more. Yet most organizations capture less than 20% of available discounts due to slow invoice processing. Our calculator helps you understand the opportunity cost of missed discounts.
How It Works
Enter your annual vendor spend, average discount terms, and current capture rate. We calculate your potential annual savings and the effective annual return of capturing these discounts.
Input Your Data
Total annual spending with vendors offering discounts
Typical discount offered (e.g., 2% for 2/10 Net 30)
Days to pay to capture discount
Normal payment due date (days)
Percentage of available discounts you currently capture
Expected capture rate after AP automation
Your Results
How We Calculate
Effective APR = (Discount % ÷ (100 - Discount %)) × (365 ÷ (Net Days - Discount Days)). For 2/10 Net 30: (2/98) × (365/20) = 37.2% APR.
Capture more discounts automatically
See how Nexus AP helps you process invoices fast enough to capture every available discount.
Frequently Asked Questions
What does 2/10 Net 30 mean?
2/10 Net 30 means you receive a 2% discount if you pay within 10 days, otherwise the full amount is due in 30 days. This seemingly small discount translates to a 36%+ annualized return on your money.
Why do companies miss early payment discounts?
The most common reasons are: invoices arrive late or get lost, approval workflows take too long, exception handling delays payment, and cash flow constraints. AP automation addresses the first three issues.
How does AP automation help capture discounts?
AP automation accelerates invoice processing from weeks to days through: instant capture via email or scan, AI-powered data extraction, automated 3-way matching, mobile approval workflows, and scheduled payment optimization.
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