Invoice Discount Calculator
See what an invoice discount is worth. Enter the invoice amount and a percentage or fixed discount to get the amount to pay. For early-payment terms – for example 2% off if paid within 10 days, otherwise due in 30 – the calculator also shows the yearly interest rate you implicitly pay by skipping the discount, both simple and compounded.
- Runs in your browser
- No sign-up
- Free to use
For early-payment terms such as 2/10 net 30.
If the yearly cost of skipping an early-payment discount is above your cost of borrowing, taking the discount is usually worth it.
How to use Invoice Discount Calculator
- Enter the invoice amount.
- Choose percentage or fixed discount.
- Add the early-payment days and the normal due date.
- Compare the yearly cost with your borrowing cost.
Invoice Discount Calculator features
Two discount types
Percentage or fixed.
Early-payment terms
Discount days and net days.
Implied interest
Simple and compounded.
Clear savings
Amount saved.
Formula shown
Every result explains how it was calculated.
Any currency
Choose from 30+ currencies; amounts are formatted for it.
When to use Invoice Discount Calculator
- Deciding whether to pay suppliers early.
- Offering early-payment terms.
- Cash management.
- Accounts payable reviews.
Invoice Discount Calculator FAQ
What does 2/10 net 30 mean?
2% discount if paid within 10 days; otherwise the full amount is due in 30 days.
Why is the yearly cost so high?
Giving up 2% to keep the money for 20 more days is like borrowing at about 37% a year.
When should I take the discount?
When its yearly cost is above what it costs you to borrow or what your cash earns.
Should I offer such terms?
They speed up payments but cost margin; compare with your cost of financing.
What does 2/10 net 30 mean?
A 2% discount if paid within 10 days; otherwise the full amount is due within 30 days.
The hidden interest rate
Early-payment discounts look small but carry a high implied interest rate. For most businesses with access to credit, taking the discount is cheaper than paying late.
For sellers, offering a discount can be cheaper than chasing late invoices or factoring them.
Early-payment terms such as “2/10 net 30” give 2% off if the invoice is paid within 10 days instead of 30. That looks small, but paying 20 days early to save 2% is equivalent to an annual return of about 37% (2 ÷ 98 × 365 ÷ 20), so taking the discount is usually worth it when cash allows.
For the supplier, the same figure shows how expensive the discount is as a way of getting paid sooner. How discounts are treated for VAT or sales tax depends on local rules; check them before changing invoices.