More than 80 percent of suppliers accelerate payments for discounts to improve cash flow, says a survey by Xign Corporation, which provides on-demand order-to-pay solutions.
• 25 percent of all suppliers currently offer early payment terms to customers
• 60 percent of all respondents accelerate payment on particular invoices
• 91 percent of large suppliers (over $1bn) offer accelerated payment terms on select invoices today
Xign says the top three factors influencing terms selection are the length of time it currently takes customers to pay, the number of days that payment is accelerated, and the amount of revenue the customer represents to the business.
"The insight from our supplier network suggests that expanding early payment discount programs present a tremendous opportunity for mutual financial gain," says George Fan, Xign vice president of marketing and supplier services. "For suppliers, early payment discounts accelerate collections and reduce DSO. For buyers, these discounts have a significant positive impact on earnings and cash return."
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