A COD discount is a form of trade finance, where a business offers a reduction in the invoice amount if the invoice is paid within a specific time frame. In a practical sense, the business paying the invoice (the buyer) pays less than the full amount due and the business receiving the funds (the supplier) receives payment earlier.
A supplier’s motivation for offering a COD discount is to get paid sooner which will assist with their cash flow while also reducing the risk of late payments.
Taking advantage of a cash on delivery (COD) discount is a great way to improve the profitability of your business. But it comes at the cost of consuming valuable working capital as you’ll now need to outlay the cash to purchase stock before you’ve been able to sell it. Worse, if you don’t have the necessary cash on hand, you might be letting a valuable opportunity pass you by.
With Shift Payments you can!
Use Shift to take advantage of any COD discount whilst also getting the terms you need to manage cash flow, reducing your cost of goods sold while doing so.