Solutions
Dynamic discounting
The buyer pays early from its own cash, and the supplier chooses the discount it accepts in return.
Definition
What it is
Dynamic discounting is the simplest product in this family, because no funder from outside the relationship is involved. The buyer pays an approved invoice before its due date and receives a discount on the value in return.
Dynamic means the discount moves with the number of days. The earlier the payment, the larger the discount; the closer to the original date, the smaller. The supplier decides when to accept and when to wait, rather than facing a single fixed offer.
Mechanics
How it works
Who
The buyer
What
Approves invoices and sets how much cash is available for early payment
When
After the invoice is approved
Who
The platform
What
Shows the supplier the discount attached to each possible payment date
When
Continuously until the due date
Who
The supplier
What
Picks the date that suits its cash and accepts the discount attached to it
When
Whenever it needs to
Who
The buyer
What
Pays the discounted value on the chosen date, from its own cash
When
On the agreed date
Fit
Who it suits
- Buyers with surplus cash looking for a better use for it than a deposit
- Buyers who want to improve supplier relationships without introducing a third party
- Suppliers whose need for cash varies from month to month
- Programmes that start small on a defined supplier group and then widen
Cost
What it costs
There is no financing cost here, because the money is the buyer's own. There is a discount the two sides agree, and a platform fee for running the programme that is agreed with the buyer.
Priced per transaction, with no sign-up fee and no monthly fee. Four things move the price: the buyer's strength, the tenor, the size of the amount, and the track record behind it. The cost is shown in full before you confirm, and Fkah's own rates will be published at launch.
How supply chain finance is pricedQuestions about this product
How is it different from supplier finance?
Who sets the discount?
Does it work on every invoice?
Does it change the agreed payment terms?
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