In many industries, an important cash flow strategy is to take advantage of what are often referred to as early pay discounts, or “2/10, net-30 discounts.” Such discounts allow companies to subtract 2 percent (and sometimes more) from the invoice amount if it is paid within 10 days instead of the normal 30.
These discounts can really add up, especially for companies with thin profit margins. The challenge for many companies, however, is managing their cash flow system in a way that enables them to take advantage of these discounts on a regular basis.
