The trade-off between direct payment of invoices to creditors and payment discount optimizing the credit side of the balance sheet can be complex and depends on a variety of factors. On the one hand, paying invoices directly can help a company to maintain good relationships with its creditors, as it demonstrates that the company is reliable and able to pay its debts on time. This can be particularly important for companies that rely on credit to finance their operations, as it can help to improve their creditworthiness and allow them to access more favorable terms from their creditors.
On the other hand, taking advantage of payment discounts can help a company to improve its financial performance by reducing its overall costs. When a creditor offers a payment discount, it is essentially offering to accept less than the full amount of the invoice in exchange for being paid sooner. This can be a good deal for the company, as it allows it to free up cash that would otherwise be tied up in outstanding invoices, and use it to fund its operations or invest in other areas. This can ultimately help the company to improve its bottom line and increase its profitability.
The trade-off between these two options ultimately depends on the specific circumstances of the company and its financial position. If the company is in a strong financial position and has plenty of cash on hand, it may make sense to pay its invoices directly in order to maintain good relationships with its creditors. However, if the company is facing financial challenges and is in need of additional cash, taking advantage of payment discounts may be the more attractive option. In either case, it is important for the company to carefully consider the pros and cons of each option and make a decision that is in the best interests of the business.
Qube Added Value
- Qube Financing (and its affiliates) have developed the Qube platform, supported by its proprietary PRI® inside infrastructure, front-end to back-end fully automated receivables financing platform (“Qube Platform”), as one of the earlier Fintech 3.0 initiatives in the market and is fully equipped to be the winning platform of the third wave.
- This Qube Platform is fully operational and has been fully adopted by institutional investors, including the standardized procedures, ‘modus operandi’ and underwriting process steps & criteria.
- Qube targets European SME and Mid Market Corporates with a fully standardized approach as well as tailored solutions for multinationals, predefined underwriting criteria that are agreed with institutional investors and supported by PRI® inside and the add-on credit & collection management application PRI® CrediSoft and PRI® Supply Chain.
- Offering consolidated multi jurisdictions multi operating companies fully automated working capital financing solutions based on invoiced turnover, whereby PRI® inside directly interfaces with the Corporate's ERP systems, the Connection.
- The Qube Platform benefits from a modular design and standardized processes and legal infrastructure.
- US version of PRI® infrastructure can be calibrated for US time zone and jurisdiction.