Your money in sooner — your customer decides
How to collect your sales invoices faster without a factoring contract: your customer chooses an earlier payment date in exchange for a discount, and you improve your DSO.
You have delivered, the invoice is out the door — and then the waiting starts. Thirty days, sixty days. You know the money is coming, but until then it is not in your account. The familiar route to speed that up is factoring: a fixed facility across your entire receivables portfolio. It can also be done more finely, per invoice.
You put your sales invoices on the platform and invite your customers to pay earlier. You force nothing: in the calendar your customer chooses a date before the due date and gets a discount for it. So he pays earlier voluntarily — for instance because he has spare cash — and settles the invoice amount minus that discount. You have your money in sooner.
Who does what
The nice thing about this arrangement is that both sides get something out of it, without putting pressure on the relationship.
Pay earlier, with a discount
Money sooner, lower DSO
You decide what you give away at most
You send the invoice, so you keep control. You set for yourself how much discount you are willing to give away at most to be paid thirty days earlier — for example 2%. It never becomes more than that.
Your customer then chooses a payment date somewhere between today and the due date. The earlier he pays, the higher his discount — sliding from your maximum back down to almost nothing:
Example: you set the maximum at 2% for thirty days earlier. From there the discount tapers neatly back to 0.1% as your customer pays closer to the due date.
What it delivers: structurally earlier liquidity
One invoice coming in a few days earlier feels like little. But it adds up. Averaged across all your invoices, even a small acceleration means you have access to your money earlier all year round. The rule of thumb is simple:
Average number of days earlier ÷ 365 × annual revenue = the amount you have at your disposal earlier on average.
Let’s fill it in, purely as an illustration: with an annual revenue of € 5 million and paid on average 3.5 days earlier, you arrive at roughly € 48,000 (3.5 ÷ 365 × € 5,000,000). That is working capital available earlier all year round — without a factoring contract and without credit, purely because your invoices come in a bit earlier on average.
Your money faster, without a factoring contract
Factoring is not bad — it is just a different kind of instrument. Usually an ongoing facility across your entire receivables portfolio, sometimes with a third party between you and your customer. This works per invoice:
Fixed facility
Per invoice
- You improve your DSO and liquidity exactly where and when you want.
- It runs per invoice through your existing invoices and ERP — no fixed facility, no covenants.
- Your customer chooses himself and gets a discount for it — no pressure on the relationship.
You decide what you give away at most, your customer chooses how much earlier he pays — and a few days of acceleration means you have your working capital at your disposal structurally earlier all year round, without a factoring contract.
Want to see what this does for you? Read on about SmartDSO — ready to start straight away, without a long-term contract.
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.