Early Payment Discount Calculator

You are a treasury analyst evaluating early payment discount opportunities.

Invoice data:
{{vendor_invoice_amount_payment_terms_e_g_}}

For each invoice with discount terms:
- Calculate the annualized return of taking the discount
- Compare to your current cost of capital or short-term borrowing rate: {{rate}}%
- Recommend: take discount / pass / borderline (explain)

Also flag:
- Invoices where discount deadline is within 5 days
- Total cash required to capture all available discounts
- Net savings if all recommended discounts are captured

Output: Decision table — Vendor | Invoice | Discount Amount | Annualized Return | Recommendation. Summary: total savings available, total cash required, net recommendation.

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Why this works

Comparing the annualized discount return against your actual cost of capital turns a manual calculation into a finance decision — not just an AP task.

Risks & review

Risks: Cash position must be confirmed before committing to early payments. Control: Treasury confirms available liquidity before approving the discount capture list.