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Dynamic Discounting

Dynamic Discounting

Pay earlier to save money

Dynamic Discounting is a clever, flexible discount. The corporate buyer pays the invoice as early as its suppliers request, achieving tangible benefits. With your excess liquidity you generate attractive returns. At the same time, you strengthen your supply chain because your suppliers reduce their accounts receivable (“DSO”) and are better financed. Best of all, Traxpay makes it easy to implement and does not require any adjustments to your existing business processes.

We would be happy to further discuss how you too can benefit from the advantages of Dynamic Discounting – contact us!

 

Factsheet Dynamic Discounting

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Portrait Sven Weissmann | Traxpay
  • Dr. Sven Weissmann (CSO)
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Dynamic Discounting
is the smarter, more flexible discount

Many will be familiar with discounts for cash payments or the classic 2 to 3 percent discounts for early payments i.e., within a defined period. Dynamic Discounting is much more versatile. On the basis of a flexibly defined interest rate, a discount can be granted on any day up to the actual due date of an invoice. This process can be equally attractive for you as the buyer as well as for your suppliers. As a result, suppliers no longer have to wait for their money until the end of the agreed payment period, or in an emergency, call on expensive external financing. This is actually a double win for you. The more stable your suppliers’ financing is, the more robust the value creation in your supply chain will be.

With Dynamic Discounting, the individual discount depends on the time of payment and is available on favorable terms every day until the invoice is due.

Traxpay makes Dynamic Discounting very simple

As obvious as the advantages of Dynamic Discounting are, its implementation would be extremely complicated if you had to manually enter and record each discount condition for all invoices. But that isn’t necessary. The Traxpay Financing Platform takes care of everything for you. You determine how much liquidity is to be made available, at what conditions and for which suppliers. Conversely, your suppliers can use the Traxpay Financing Platform to determine which invoices they would like to have paid earlier and when.

Implementing a Dynamic Discounting program is easy: Traxpay supports you in determining the terms and conditions, your discount revenue potential, plus the selection and onboarding of your suppliers.

The three most important advantages for you as a buyer:

1

High returns on your liquidity

There is no end in sight to the low interest rate era. On the contrary, there is a continuous threat of penalty interest on bank balances. With Dynamic Discounting via Traxpay, you leverage your liquidity by providing your suppliers with an automated and sustainable early payment option in exchange for a dynamic cash discount. The earlier you pay, the higher your discounted yield. In addition, you create transparency for your suppliers regarding the invoicing process. All invoices approved by you are clearly displayed to your suppliers on the Traxpay Financing Platform. This eliminates time-consuming inquiries and reduces costs for you and your suppliers.

2

Strengthen supply chains

You decide which invoices you want to pay earlier. With Traxpay you have real-time insight into all invoice data and the potential liquidity requirements of your Dynamic Discounting program. By granting the early payment option, you strengthen your partners in a targeted way. Many of your suppliers receive the liquidity they frequently need and can thus avoid having to draw on bank credit lines and/or factoring programs. With Dynamic Discounting via Traxpay, you support the liquidity needs while strengthening your supplier relationships. This in turn improves the stability of your supply chain.

3

Setting an emphasis on sustainability

Sustainability criteria are becoming increasingly important to and for companies globally. How high your ESG score, or other sustainability rating is, depends largely on the sustainability of your supply chain. With Traxpay, you have the opportunity to consciously grant special conditions to suppliers who act in a (particularly) sustainable manner and thus promote sustainable business. Talk to us about the advantages of Dynamic Discounting to learn more!

The three most important advantages for you as a supplier:

1

Simple and free to use

Simply log in, select invoices and determine the desired payment date – done. All this without the need to install fee-based software or change underlying supply contracts. If you need support in setting up your Traxpay access, our competent service team is of course at your side.

2

Flexible and bank-independent

Unlike classic factoring, you have full flexibility. Accelerate only the invoice amounts you need; there’s no obligation to accelerate all receivables. This means that you can also use our bank-independent financing option for specific dates only, and request the funds you need to optimize your financial ratios.

3

A more stable business relationship

Flexible payment terms increase the attractiveness of your range of goods and services. With Dynamic Discounting, you simultaneously reduce your risk of non-payment while increasing your flexibility through the option of receiving funds earlier. You reduce the cost of hedging payment risks by no longer needing to purchase expensive credit default insurance. Dynamic Discounting maintains the access to liquidity when you need it and strengthens the partnership with your customers.

The three most important advantages for you as a buyer:

1

High returns on your liquidity

There is no end in sight to the low interest rate era. On the contrary, there is a continuous threat of penalty interest on bank balances. With Dynamic Discounting via Traxpay, you leverage your liquidity by providing your suppliers with an automated and sustainable early payment option in exchange for a dynamic cash discount. The earlier you pay, the higher your discounted yield. In addition, you create transparency for your suppliers regarding the invoicing process. All invoices approved by you are clearly displayed to your suppliers on the Traxpay Financing Platform. This eliminates time-consuming inquiries and reduces costs for you and your suppliers.

2

Strengthen supply chains

You decide which invoices you want to pay earlier. With Traxpay you have real-time insight into all invoice data and the potential liquidity requirements of your Dynamic Discounting program. By granting the early payment option, you strengthen your partners in a targeted way. Many of your suppliers receive the liquidity they frequently need and can thus avoid having to draw on bank credit lines and/or factoring programs. With Dynamic Discounting via Traxpay, you support the liquidity needs while strengthening your supplier relationships. This in turn improves the stability of your supply chain.

3

Setting an emphasis on sustainability

Sustainability criteria are becoming increasingly important to and for companies globally. How high your ESG score, or other sustainability rating is, depends largely on the sustainability of your supply chain. With Traxpay, you have the opportunity to consciously grant special conditions to suppliers who act in a (particularly) sustainable manner and thus promote sustainable business. Talk to us about the advantages of Dynamic Discounting to learn more!

The three most important advantages for you as a supplier:

1

Simple and free to use

Simply log in, select invoices and determine the desired payment date – done. All this without the need to install fee-based software or change underlying supply contracts. If you need support in setting up your Traxpay access, our competent service team is of course at your side.

2

Flexible and bank-independent

Unlike classic factoring, you have full flexibility. Accelerate only the invoice amounts you need; there’s no obligation to accelerate all receivables. This means that you can also use our bank-independent financing option for specific dates only, and request the funds you need to optimize your financial ratios.

3

A more stable business relationship

Flexible payment terms increase the attractiveness of your range of goods and services. With Dynamic Discounting, you simultaneously reduce your risk of non-payment while increasing your flexibility through the option of receiving funds earlier. You reduce the cost of hedging payment risks by no longer needing to purchase expensive credit default insurance. Dynamic Discounting maintains the access to liquidity when you need it and strengthens the partnership with your customers.

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