Everything you need to know about the Early Payment Discount
In the world of business, managing cash flow effectively is crucial to maintaining financial health and sustaining growth. One strategy that businesses can employ to improve cash flow and strengthen relationships with their customers or suppliers is the Early Payment Discount (EPD). This article will explore everything you need to know about early payment discounts, including their benefits, how they work, and best practices for implementation. What is an Early Payment Discount? An Early Payment Discount is a financial incentive offered by a seller to encourage buyers to pay their invoices before the due date. This discount is typically expressed as a percentage of the total invoice amount and is available for a limited time, often within a specific number of days from the invoice date. For example, a common early payment discount might be expressed as “2/10, net 30.” This means that the buyer can take a 2% discount on the invoice total if payment is made withi...