Early Payment Discount Offers

You can pay invoices early in return for discounts with the Payables Early Payment Offers feature.

Mass onboarding of suppliers into an early payment discount campaign
One-click process to extend early payment discount offers to all targeted suppliers
Automated processing of accepted early payment discount offers
Higher return for buyers in comparison to other investment opportunities for available working capital
Access to extra short-term working capital for suppliers

These discount offers are calculated each day based on the number of days paid early. The discounts decrease over time, depending on the annual percentage rate (APR) that the supplier and you've agreed upon for taking discounts.

Here are three ways you can use early payment discounts:

Through campaigns and automated processing of offer responses, for both standing offers and one-time offer
Through enrollment in standing offers
Through dynamic offers (on an ad hoc basis) for single payments

Campaign Management

Identify suppliers that you intend to target for an early payment discount campaign by applying selection criteria on the Payment Discounts page in Oracle AI Apps for ERP. You can use the criteria filters to add multiple suppliers to an early payment discount campaign and to define your offer terms. Use the campaign to send early payment offers to applicable suppliers. Responses to these early payment offers are automatically processed and applied in your payment process requests.

Campaign managers can select suppliers for a dynamic discounting campaign based on payment terms, payment method, and payment currency. To maximize the effectiveness of the campaign, the campaign manager can select suppliers according to these criteria: suppliers with longer payment terms; suppliers who receive payments electronically; and currencies where the buyer has surplus cash.

Buying organizations can earn more return on surplus funds by applying a discount dynamically over the length of the payment terms. The earlier the invoice is paid, the larger the discount received. The campaign manager can select suppliers for a dynamic discounting campaign based on the payment terms, payment method, and payment currency. This helps the campaign manager to tailor the dynamic discounting campaign to their target suppliers.

For example, the campaign manager can select suppliers with longer payment terms as they're more likely to accept dynamic discounting offers. They can also create multiple campaigns with different APRs according to the range of payment terms. If the buyer has surplus cash in a specific currency, such as US Dollars, they can select only the suppliers who receive payments in US Dollars.

Standing Offers

When you enroll suppliers into standing offers, you're creating a set of criteria for recurring offers over an agreed time period. Standing offers use a combination of AI recommendations with manual overrides that you specify, such as APR and site assignment. Use the categories on the Payment Discounts page in AI Apps for ERP as a starting place to view and identify suitable suppliers and manage their enrollments. In your payment process request, select the options to take early payment discounts based on standing offers.

Dynamic Offers

Oracle Financials Cloud uses AI models to provide discount recommendations for single payments. When you create payments, you can accept or override the recommended APR for the selected transactions. The discount rate you accept, combined with the number of days paid early, decides the actual discount and payment amounts. Dynamic discounts are helpful when managing an ad hoc early payment request.

Required Setup for Early Payment Discount Offers

Before using Early Payment Discount Offers (commonly referred to as dynamic discounting), you must set up the connections that integrate with AI Apps for ERP. This application provides the dashboard to identify suitable suppliers to target for dynamic discounting.

To set up these connections, follow the steps described in the AI Implementation Workflow topic from the Getting Started with Your Financials Implementation guide.

Processing Early Payment Discounts for Dynamic Offers

Use the dynamic offers when creating a payment for a single supplier. When you create the payment, you've the following options available:

You retrieve the AI data science driven discount recommendations.
You can accept or override the AI discount recommendations.
The accepted discount rate combined with the days paid early decides the various discount amounts and payment amounts.

Automated Processing of Early Payment Discounts

After suppliers accept a one-time offer or enroll into standing offers, you can select all applicable early payment invoices. You can do this while initiating payments on the Submit Payment Process Request page. This table describes the options in the Select Early Payment Invoices list.

Option	Description
Yes	Selects the installments for payment based on pay through date, or installments with accepted early payment discount offers
Discounted Only	Selects only the installments for the supplier site assignments with accepted early payment discount offers, and subject to payment acceleration
No	Selects only the installments for payment based on pay through date

When you submit a payment process request, the request passes through various stages of processing. You can use the Review Installments stage to review and act on payment process requests. Here are the actions you can take:

Review installments eligible for early payments
Remove or add installments for early payments
Edit discount amounts, APR, and payment amount