When paying my company’s bills, should I take advantage of early payment discounts or pay late?

Top voted answer
Hitesh Mohanlal

Hitesh Mohanlal, Director at WOW! Advisors & Business Accountants

Good question. Yes if you have the funds it is worth taking the discount because on an annual basis the discount can save you money. I once did a calculation for one of my clients which showed that it was worth him increasing his overdraft and take the discount. Paying late can also work but this generally affects goodwill. If you pay on time and then find you are in a tricky position, suppliers will give you a bit more time to pay. If you are constantly late it can affect your relationship. You need to do some quick calculations but i usually take advantage of early payment arrangement.

Jef Lippiatt

Jef Lippiatt, Owner at Startup Chucktown

Your answer is spot on Hitesh.