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.
Requirements for the early payment discount:
- Specific discounts and rebates must appear on the invoice.
- Please provide the exact amount of the discount.
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.
Fast billing with Northgate Logistics through the ALEO platform is the easiest way to efficiently turn invoices into money.
To ensure comfort and financial liquidity to our suppliers, Northgate Logistics has introduced a supplier financing program on the ALEO business transaction platform.
When the freight forwarder registers the order as “executed” in the system, the carrier receives an e-mail with a proposal to use ALEO. If the carrier wishes to receive the funds prior to the invoice due date, the Bank will transfer the amount due less the cost of financing to the carrier’s account. The cost will be known to him beforehand, allowing him to decide which invoices he wants to fund through the Supplier Financing program.
The shorter the time to invoice due date, the lower the cost. An early withdrawal can be requested not later than 5 business days prior to the date indicated on the invoice.
Important! If payment of the invoice is to be made by the due date thereunder, there will be no cost to the Northgate Logistics partner.
What are the benefits of using ALEO?
- Minimised risk of late payments
- Money at hand in different currencies, without any contracts and formalities
- Projected cost known before commissioning of funding
- Up-to-date information on invoices and payment orders
How to do that?
All you need to do is register on ALEO, an open trading platform for companies.
This allows you to check the cost of previous disbursements and electronically request funding for selected invoices.
Registration in ALEO
Financing of an invoice