Capture the Early-Pay Discount Hiding in Your AP

Your suppliers offer 2% to pay in ten days. Manual AP makes you miss it. That discount is an annualized 36% return you're handing back.

The problem, in your words

A stack of supplier invoices. Someone matches each one to a PO and a receipt, keys it, routes it for approval, schedules payment. It's slow. Invoices sit. The 2/10-net-30 window closes while the invoice is still in someone's inbox.

So you pay full freight — and never notice, because nobody reports the discounts you didn't take. The miss is invisible, which is exactly why it's expensive.

Why it persists

AP is a cost center nobody's been asked to optimize. Matching is manual, and exceptions — price mismatches, missing receipts, quantity disputes — stall the whole queue behind them. Approvals wait on people who travel. And the early-pay discount is small on any single invoice, so it's easy to forgive. Until you add up a year of them.

There's also a reporting blind spot. Your system tracks what you paid. It does not track what you could have saved and didn't — the discounts that expired in the queue. A cost that never appears on a report never gets a budget line, an owner, or a deadline. So the leak runs indefinitely, funded by the float you're giving your suppliers for free.

The teach — the math you're skipping

2/10 net 30 means: pay 20 days early, save 2%. Annualize that 2% over the 20 days you accelerated and it's roughly a 36% return on the cash.

There aren't many places a distributor earns 36% on working capital. Skipping it isn't neutral — it's choosing not to take the best-yielding use of cash on your balance sheet, one invoice at a time.

The play

1. Baseline AP cost-per-invoice and cycle time. Fully-loaded labor ÷ invoices. Days from receipt to posted.
2. Count the missed discounts. Pull a quarter of discount-eligible invoices. See how many you actually captured. The miss rate is your opportunity, in dollars.
3. Automate the match. Resell a proven AP engine (Conexiom, Esker) for PO-to-invoice-to-receipt matching. Straight-through for clean matches; route the exceptions to a person.
4. Move approvals off the desk. Threshold-based routing, so small, fully-matched invoices don't wait on a signature that's out of office.
5. Schedule payment to hit the window on purpose — capture the discount by design, not by luck.

How to measure it

• AP cost per invoice and invoice cycle time (receipt → posted).
• % of discount-eligible invoices captured.
• Exception rate — the share that can't auto-match.
• DPO — so you're paying optimally, early enough to catch discounts, not so early you give up free float elsewhere.

The number it moves

Manual AP runs $10–22 per invoice (APQC: ~$21.40 median, ~$10.18 top-quartile). Best-in-class automated is around $2.78 (Ardent Partners). Conexiom cites roughly a 49% AP cost reduction ($12 → ~$6). Woodhill Supply, an Epicor Eclipse distributor, reported a ~4-week payback (per Conexiom).

And the discount itself: 2/10 net 30, captured consistently, is an annualized ~36% return on the cash you put to work paying early. Cheaper invoices, freed-up hours, and a return on working capital you're currently forfeiting — three numbers from one fix.

[PLACEHOLDER: MarginArc client AP capture rate — to be added]

The discount isn't a perk. It's a 36% yield your suppliers are offering and your inbox is declining.

Every number here is either yours (the calculator, the audit) or an attributed benchmark. Talk to us about your number →