Some suppliers will be prepared to offer discounts for prompt payment of their invoices. These offers should be negotiated with the supplier. When considering prompt payment discounts it is important to know
- whether the department will be able to authorise invoices for payment quickly enough to enable the Accounts Payable section to pay the invoice within the time period being considered
- whether there are any costs to the institution associated with prompt payment, for example, the need to run a specific payments process etc
The costs of making the prompt payment must not be more than the financial gains from the discount offered for the prompt payment.