Promptly Pay Vendors Offering Payment Discounts

Issues:

• • • Many vendors offer cash discounts for invoices paid within a set number of days
    • Payment terms may not be communicated to AP resulting in invoices being paid in full within the cash discount period

Example:

• • • A vendor offered a 3% discount for invoices paid within 90 days
    • Several invoices paid within 30 days, but the system did not apply the discount
    • TAG contacted the vendor to request credit for missed discounts
    • Vendor confirmed credit and agreed to deduct 5 months of discounts from the system’s next check run

TAG Tips:

• • • Give highest priority to invoices offering cash discounts for prompt payment
    • Use electronic invoicing, ACH or other payment options when available to speed up payment processing
    • Identify vendors that offer case discounts and set up automatic deduction