Dynamic discounting is a form of financing in which supplier obligations are settled on the grounds of negotiated discounts before the initial payment terms. This will allow you to provide your provider with liquidity and financial flexibility sooner. And you receive a discount income while successfully utilizing your excess funds.
True Contracts allows you to benefit from analytical tools that help you optimize the deployed liquidity for both models. Moreover, two distinct models are supported by True Contracts: the buyer-centric model and the supplier-centric model.
The buyer takes the lead in the buyer-centric approach, in which the buyer decides on a yearly discount rate for individual suppliers or supplier groups. This rate is completely open and accessible to the suppliers on our decentralized smart contracts marketplace. For this discount, suppliers may perform an early payment of their invoice. The buyer is responsible for the condition and limits management. The purchaser is able to attach new suppliers immediately to groups and, by extension, to the predetermined financing terms.
In the supplier-centric model, suppliers can submit a quote for the annual discount rate they prefer. The buyer may accept or reject the offer based on the anticipated return. The buyer's return expectations may be modified at any time and made optionally apparent to the vendor. The availability of liquidity is established solely by the buyer.
