Early Payment Discounts

Once upon a time a company wanted to buy a tractor (true story). But the company was small and a little short on cash. So the accounts receivable team came up with a plan: they would bill their customers with an incentive to pay early — an early payment discount. Enough customers took the discount, paid early, and the small company purchased its new tractor, debt free. So goes an example of George Fan's experience with the thousands of companies he helps negotiate AR functions through JPMorgan…