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Can Dynamic Discounting Take Accounts Payable to the End of the World?

By aishika bhattacharya
In E-Invoicing
Jan 25th, 2018
0 Comments
1519 Views

Earlier, very few organizations were fully aware of dynamic discounting as a solution to impact savings. But with time, this has changed. Now, dynamic discounting has found a solid grip in accounts payable.

The solution isn’t new, but its practice is with more and more organizations starting to benefit from dynamic discounting, buyers avail discount on early payment. Dynamic discounting is one of the top strategic savings scheme transforming accounts payable to a profit center.

Dynamic discounting is a ubiquitous part of the corporate expense control strategy. Unlike before, organizations are rapidly adopting discounting technology to realize potential savings opportunities. The technology has been undoubtedly disruptive in turning heads for saving organizations millions of dollars.

Dynamic Discounting- Key Features

Below we discuss eight salient features of dynamic discounting from an accounts payable’s point of view. These pointers would define how dynamic discounting adds value to the AP team.

  1. Zoom to the starting paragraph; Dynamic Discounting has blinds on and is determined to meet and even exceed the organization’s savings goal, which is of utmost priority.
  2. Not deferred but real-time savings data. This way, from the very beginning, you can show real-time results to the decision-making body.
  3. A Dynamic Discounting Management (DDM) tool is ERP friendly and easy to integrate with existing processes.
  4. As a buying organization, depending on the participation factor of the supplier, you would know which invoices you may prioritize.
  5. It’s flexible since discount terms can vary dynamically. Additionally, companies can also prioritize high-quality suppliers.
  6. Since dynamic discounting focuses on discounts, a higher number of invoices processed by leveraging dynamic discounting would mean cumulatively more significant savings for further investment in profitable portfolios.
  7. Dynamic Discounting allows suppliers the ability to request early-pay when in need of working capital. Encouraged suppliers inform their tribe that as the buying organization, they can leverage the feature to make more savings on discounted invoices, thus encouraging better business transparency and improving the supplier-buyer relationship.
  8. This entire feature contributes to business intelligence by providing rich reports and analytics available for review at any time.

Accounts Payable is engaged in one of the most critical tasks based on which an organization can maintain its supplier-buyer relationship. Granting it the status of strategic business partners ‘creating impact on both savings and supplier enablement’ would be the best move forward. And in that direction, implementation of Dynamic Discounting management tool is the nail in the horseshoe.

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