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Collaborate with suppliers on early-payment discounts using discount management with dynamic discounting

With SAP Ariba Discount Management and working capital management services, not only can you boost your suppliers’ liquidity, but you can also earn far greater returns than short-term cash investments provide.

This can be especially helpful for stabilizing your supply chain during rocky economic periods. Not only can you help your strategic suppliers maintain cash flow, but you can also better control your costs while optimizing working capital.

Collaborating with the suppliers you choose, you'll use on-demand tools for automating the early-payment discounting process, from initial offer through final capture. It all transpires over Ariba Network, the world’s largest business network. If a supplier isn’t already on it, it’s easy to enable them.

You’ll then be fully equipped to:

  • Manage payables and cash with greater precision, control, and visibility

  • Expand discount capture across targeted suppliers, spend, and invoices

  • Enforce pre-negotiated contract and discount terms

  • Employ tools for capturing additional sliding scale discounts

Product Features

Better returns on cash

Discounting can deliver better returns than playing float. For example, traditional 2/10 net 30 terms earn an APR of 36.5 percent.

Laptop with screen showing SAP Ariba discounting software

Reduced supply risk

Getting payments to suppliers when they are short on cash can help mitigate the risk of supply chain disruption while reducing your supply costs.

Under your control

You set business rules to initiate early payments only when you’re assured discounting will deliver your required internal rate of return.

Set it and forget it

With one option, you set your preferred discounting parameters once. Upon invoice approval, automation takes over to capture pre-determined discounts.

Discounting flexibility

Set always-on prorated discount terms that capture discounts on a sliding scale. Or use dynamic discounting, and capture discounts based on ad-hoc supplier cash flow needs.

Time and cost savings

Eliminate slow and costly processes and accelerate the cash conversion cycle. Minimize supplier inquiry calls with automated notifications of discount offers and approvals.

Boost supplier satisfaction

Web-based tools equip suppliers to collaborate with you on payment timing, while an easy-to-understand dashboard keeps them apprised of payment status.

Offer strategic on-boarding

Our dedicated services team can help you analyze, categorize, and organize your suppliers for participation based on their predisposition to discounting.

Adoption assistance

SAP Ariba’s solution experts can help drive adoption within your organization and among your supplier base.

Frequently Asked Questions

How does SAP Ariba Discount Management work?

SAP Ariba Discount Management combines dynamic discounting technology with consulting expertise in payment terms strategy, enabling you to increase net income and improve cash flow while helping your suppliers manage their cash better and gain visibility into their cash position. The solution delivers these benefits through four key functionalities: dynamic discounting, payment terms management, a self-service supplier portal, and working capital management services.

Read more in FAQ

What is dynamic discounting?

Dynamic discounting is a process that allows you and your suppliers to negotiate a continuous, sliding-scale discount that you receive for early payment of invoices. The sooner you pay, the higher the discount rate. For example, if you have a 30-day net term, you and your supplier might agree that you’ll receive a 2% discount if you pay on day 10 and a 1% discount if you pay on day 20, sliding down to a 0% discount if you pay at the full term of 30 days.

Read more in FAQ

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