Dynamic Discounting
From Open Risk Manual
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Definition
Dynamic Discounting. It describes a number of supply chain methods through which early payment discounts on invoices awaiting payment are offered to vendors and funded by the buyer. The service is dynamic in the sense that the earlier the payment, the higher the discount.
It is a variant of payables finance whereby the buyer may utilise its own funds to pay an invoice or account payable prior to the original due date.
