Early-Pay Discount Calculator
A take-or-hold calculator for supplier early-pay discounts.
It measures the APR-style annualised return of the discount vs your cost of capital.
Use it to decide when paying early beats holding cash for the full net terms.
Your numbers stay in this browser. Export only — nothing is uploaded. Illustrative, not financial advice.
Early-Pay Discount Calculator
An early-pay discount is a % off for paying before net terms. Compare the APR-style annualised return to your cost of capital (the hurdle rate / opportunity cost of cash) — take or hold.
Sample figures: AU AP (accounts payable) invoice.
Invoice terms and cost of capital
Classic 2/10 net 30 style. Persist locally · Jump to decision
Take or hold
APR-style annualised return vs cost of capital. Traffic light on the decision.
Equations
- DaysSaved = NetDays − DiscountDays
- AnnReturn (APR-style annualised return) = (d ÷ (1 − d)) × (365 ÷ DaysSaved) · d = DiscountPct ÷ 100
- Saving = Invoice × d · Take if AnnReturn ≥ CostOfCapital
- Pay early = Invoice × (1 − d) · residual = Cash − early pay (if take) else Cash
How this is calculated
- Early-pay discount — % off the invoice if paid within discount days instead of waiting until net days
- APR-style annualised return = (d / (1 − d)) × (365 / DaysSaved), where d is the discount as a decimal — comparable to an annual interest rate
- Take when APR-style annualised return ≥ your cost of capital (hurdle rate); otherwise Hold cash until net
- Optional cash residual: after take you pay Invoice × (1 − d); after hold residual is unchanged
Illustrative AP decision aid — not financial advice.
What-if dials
Discount % and cost of capital — live Take / Hold.
Discount & capital
Dials override the form values for the what-if readout. Invoice and days stay fixed.
Take it with you
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