Invoice Early-Payment Discount Calculator
Decide if taking a "2/10 net 30" discount is worth it.
Open the Interactive CalculatorHow It's Calculated
Annualized Rate = [Discount% ÷ (100 − Discount%)] × [365 ÷ (Net Days − Discount Days)] × 100 — the standard trade-credit formula for the implied cost of forgoing an early-payment discount.
Example
Example: standard "2/10 net 30" terms on a $10,000 invoice save $200 if paid within 10 days instead of 30. Skipping that discount is equivalent to borrowing money at roughly 37% annualized — almost always worth taking if you have the cash.
Frequently Asked Questions
Why is the annualized rate so high?
Because the discount period is short (often just 20 extra days), a small percentage discount compounds into a very high implied annual rate.
Should I always take the early-payment discount?
Nearly always, unless your cost of capital (e.g., a credit line) is cheaper than the annualized rate shown here.