What does paying earlier earn you?
Why paying your suppliers earlier with your own liquidity delivers an attractive return on your cash — instead of money sitting at the bank earning nothing.
Paying earlier is a return on your cash
If you have spare liquidity in your account, you can pay your suppliers before the due date — in exchange for a discount. That discount is not a cost: it is a return on money you were going to spend anyway.
Every euro you use to pay earlier earns you the discount. And because you do it continuously — invoice after invoice — your cash works at that return all year long, instead of standing idle and earning nothing.
So the question is not whether it costs something, but whether it earns more than the alternative: leaving that same money at the bank. And it does, by a wide margin.
The worked example: bank versus paying earlier
Say you have an invoice of € 100,000 due in 30 days. Your supplier offers a 2% discount if you pay now. You have the liquidity — so do you leave the money at the bank, or put it to work?
Illustrative and gross — before platform fees. With the self-service variant, 30% of the realised discount goes to NCN, so your net return is lower (but still a multiple of savings interest). Savings interest for reference ~1.5%; operational money in a current account is often at 0%.
This is why you may think in annual return here
You do not convert a one-off discount on a single invoice into an annual rate — that happens only once. But you put your cash to work continuously, invoice after invoice. So you are not judging the price of one transaction, but the return on your working capital — and that is exactly what an annual percentage is meant for.
That annual return applies to the working capital you actually and continuously deploy. If in a given month you have fewer invoices to accelerate, that portion simply earns savings interest. The platform provides the continuous stream of accelerable invoices, so your cash is put to work as much as possible.
When is this attractive for you?
- You have surplus liquidity that currently earns little at the bank.
- You are looking for a return without market risk — it is about your own, already approved invoices.
- You want to stay flexible: you decide yourself, per invoice, and are not tied to anything.
- You strengthen your supplier relationships along the way — both sides of the table win.
The return scales with how early you pay
NCN Capital works with an adjustable sliding scale — you set the level yourself. Take a maximum of 2% per 30 days as an example: the earlier you pay, the higher the discount, and converted to an annual basis the return keeps landing around the same level:
The perspective is what matters: this annual return applies because you deploy your working capital continuously, invoice after invoice. If instead you receive a single, one-off discount, annualising is misleading — why, you can read in Why you should not annualise an early-payment discount.
What is a small, one-off discount for your supplier is a continuous return on your working capital for you — a multiple of what your cash would earn at the bank.
This is one of four situations on the same calendar — earlier or later, discount or premium. The overarching picture is in One calendar, one principle.