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Dynamic Discounting
Dynamic discounting is a strategic approach to supply chain financing that benefits both buyers and suppliers by improving cash flow, working capital management, and business relationships. It enables an enhanced cash flow, reduced financing costs and strengthens supplier relationships. It’s a pivotal solution in the ever-evolving landscape of supply chain finance, reliant on effective communication, collaboration, and technology to streamline processes.
Understanding Mynd Fintech Dynamic Discounting
Mynd Fintech’s Dynamic discounting is a strategic approach to supply chain financing that offers early payment incentives to suppliers in exchange for cash discounts. This mutually beneficial practice enhances cash flow for the vendor, ensuring on tap liquidity and offers a better treasury yield for the company. Simultaneously, suppliers benefit from timely payments, fostering stronger relationships and reliability. This collaborative strategy streamlines operations ultimately contributing to improved profitability and working capital management for all parties involved
Features:
Improved Cash Flow Management:
Accelerate cash outflows by offering early payment discounts to suppliers, ensuring liquidity for immediate expenses.
Reduced Borrowing Costs:
Cost-effective short-term financing compared to traditional borrowing methods, with lower supplier discounts than interest rates or loan fees.
Flexibility in Invoice Selection:
Choose when and which invoices to pay early, tailoring short-term financing to immediate cash flow needs.
Strengthened Supplier Relationships:
Foster collaborative relationships by offering early payment options, resulting in enhanced reliability and preferential treatment.
Reduced Reliance on External Financing:
Decrease dependence on external financing sources, ensuring stability during financial uncertainty or tight credit periods.
Operational Efficiency:
Streamline payments and reduce administrative overhead through automated dynamic discounting platforms, benefiting short-term financing needs.
How it Works
01
One Time Credit Limit Set-up
- Limit amount and period finalized basis risk assessment of Anchor Corporate and Dealers
- Digital on-boarding of Anchor and Dealers
02
Digital flow of Anchor confirmed invoices
- Integration with Anchor’s ERP for online invoice flow
- System for uploading digitally signed POs, if ERP integration is unavailable
03
Online Disbursement
- Authenticated PO’s are funded within 24 hours
- Disbursement done in Seller’s designated Bank account
- Limits revised post each disbursement
04
Online Repayment before due date
- Flexibility for Dealer to pay Lender anytime prior to due date
- NACH presented on the due date for payment from Dealer to the Lender
- Limits get replenished after every payment
Benefits of Dynamic Discounting
Cost Savings
Cash Flow Management
Supplier Relations
Risk Reduction
Financial Control
Cash Flow Enhancement
Risk Mitigation
Flexibility
Improved Relations:
Operational Efficiency
FAQs Frequently Asked Questions
Mynd Fintech Dynamic Discounting is a supply chain financing strategy that offers early payment discounts to suppliers in exchange for prompt payment. It helps companies manage cash flow by providing flexibility in invoice payment timing.
Dynamic Discounting offers several advantages for buyers, including cost savings, improved cash flow management, enhanced supplier relationships, reduced payment risk, and greater financial control.
Suppliers benefit from Dynamic Discounting through improved cash flow, reduced payment risk, increased flexibility, stronger buyer relationships, and operational efficiency improvements.
Technology is crucial in Dynamic Discounting for automating the payment process, real-time visibility into cash flow, and efficient management of invoices and discounts. Mynd Fintech technology platform enables you to easily and quickly access dynamic discounting