Incentives to Pay

Offering incentives to pay through cash discounts can increase cash flow, reduce risk, and minimize bad debt. This calculation is based on the time value of money. If there are rumors of a customer in distress or your company needs cash-flow for payroll, payables or any other reason, this is an option to consider.

The break-even formula provides a percentage for cash discounts that can be offered without losing profits. The cash must be received within the number of days saved to realize the benefit.

Example: If the cost of funds is 11% and payment is normally received on the 45th day after the invoice date, offering up to a 1.06% discount will not result in a financial loss as long as payment is received in 10 days.

B-Right trucking has contracted collection accounts to Aguirre, Aikman + Brown since November 15, 2001. We have been extremely pleased with their outstanding ability to collect our past due accounts. My company is completely satisfied with the service that Aguirre, Aikman + Brown has provided to us and I highly recommend them.

Susan J Lunsford
Accounts Receivable Manager,
B-Right Trucking Company

More Testimonials