What is an early payment discount?
An early payment discount is a reduction in price by a certain percentage in exchange for accelerated payment by the trade partner. It is voluntary and its terms may be agreed individually between the parties.
It involves tax. If a contractor gives a discount to a client, it must be stated on the invoice.
What is discount settlement skonto in practice and why is it becoming increasingly common in the transport industry?
In this conversation, we discuss a topic that has very real importance for carriers — financial liquidity and payment terms for completed transport services. We explain what skonto in NGLT actually is, when it can be used, and why fast payment is often crucial for many companies in their day-to-day operations.
In this episode, you will hear about:
• What skonto in the transport industry is and how it works in practice
• How the skonto process looks when settling a transport order
• Who can benefit from faster payment
• In what situations carriers decide to use skonto
• Why there is growing demand for fast payments in the transport industry
• How skonto differs from standard payment terms
How does fast payment work at NGLT?
These questions are answered by Weronika Rogucka – Senior Cost Analysis Specialist in the latest episode of the Northgate Logistics podcast.
Fast billing with Northgate Logistics through the ALEO platform is the easiest way to efficiently turn invoices into money.
Requirements for the early payment discount:
- Specific discounts and rebates must appear on the invoice.
- Please provide the exact amount of the discount.
Example:
The entrepreneur issued an invoice for the gross amount of PLN 1,500 (net amount: PLN 1,219.51, VAT: PLN 280.49), where VAT is 23%.
A contractor offers the trade partner … – percentage of early payment discount on the gross value.
- On the invoice, please enter the full value owed as a result of the sale as well as the percentage value of the discount.
In this situation, you also need to write specific statement on the invoice, such as:
“If an invoice is paid within 14 days, a 4% discount is given”and then the amount due is reduced by the early payment discount.
