Dynamic discounting is a working capital tool where buyers pay suppliers early in exchange for a discount that scales with how early payment occurs. It converts excess cash into supplier-side returns without changing standard payment terms.
How dynamic discounting works
The buyer offers early payment through a platform. Suppliers accept the offer if the implicit annualized return exceeds their cost of capital. Both sides benefit; the platform handles the accounting.
Where it fits alongside CPM
Dynamic discounting is a payment-side lever; Contract Performance Management captures rebate-side entitlements. Both extract additional value from the same supplier relationship, on different mechanisms.
