Early payment discount calculator
A supplier offers 2% if you pay within 10 days instead of 60? Or you want to offer it to your customers? The calculator turns the discount into an annual rate and compares it with the cost of your credit line.
How the annual rate of the discount is calculated
The discount is what you get for paying a few weeks earlier. To see what it is worth, look at what it yields over a year:
annual rate = discount ÷ (100 − discount) × 365 ÷ (payment term − discount period)
Example: 2% if you pay within 10 days, otherwise net 60. You pay 50 days early and save €2 for every €98 paid: 2 ÷ 98 × 365 ÷ 50 = 14.9% a year. That is far more than a normal bank credit line costs, so paying early pays off.
When paying early pays off
- If the discount's annual rate is higher than the cost of your credit line or loan, pay early even if you draw on the credit line.
- If you have idle cash, it almost always pays: no deposit yields 10-15% a year.
- It does not pay if paying early leaves you short for salaries, taxes or other suppliers: check your cash forecast first.
If you are the one offering the discount
Offering 2% to customers who pay at once gets you paid sooner, but it has a cost: the same annual rate is the cost of the money you receive early. Compare it with bank invoice financing: the discount often costs more, but needs no bank and no fees.
On Italian e-invoices the early payment discount goes in the payment data (fields ScontoPagamentoAnticipato and DataLimitePagamentoAnticipato). For VAT and bookkeeping ask your accountant.
Knowing when cash comes in decides the discount
Paying early only makes sense if the account holds. CassaChiara reads Italian e-invoices (also from Fatture in Cloud) and shows a 90-day cash forecast: you see in advance whether you can afford to pay early, or whether offering a discount to get paid sooner is worth it.
Try it free with your invoices See pricingFrequently asked questions
What does 2/10 net 60 mean?
You may deduct 2% if you pay within 10 days of the invoice; otherwise you pay the full amount within 60 days.
Is a 2% discount worth it?
With 2/10 net 60 the equivalent annual rate is about 14.9%: pay early if your credit line costs less.
How is the annual rate of the discount calculated?
Discount ÷ (100 − discount) × 365 ÷ (payment term − discount period).
Should I offer customers an early payment discount?
Only if you need cash and the alternatives (invoice financing, credit line) cost more, or if it really cuts late payments.
Is the data I enter sent anywhere?
No: the calculation runs in your browser.