Cost of Credit Calculator

Instructions: Enter supplier terms to estimate the annualized cost of skipping the early payment discount.

What you’re building: Fill in the 3 inputs to generate terms like x/y, Net z.

x = discount %, y = discount days, z = full term days.
Inputs
Terms ? Auto-built summary of what you entered.

Format: x/y, Net z (example 2/10, Net 30).

x = discount %, y = last day to take the discount,
z = full due date if you skip the discount.
x/y, Net z
Discount % ? Early-pay discount offered by the supplier.
Discount Days ? Last day you can pay and still receive the discount (example: in 2/10, Net 30, this is 10).
Full Term Days ? Due date if you do not take the discount (example: in 2/10, Net 30, this is 30). Must be greater than Discount Days.
COC
Effective Cost of Credit
? Annualized rate implied by skipping the discount and paying at the full term instead of the discount date.
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Business impact Enter inputs

Add your terms, then press Calculate to see the implied annualized borrowing cost of skipping the discount.

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Disclaimer: This model is provided for informational purposes only. Use at your own risk. Coltivar makes no guarantees regarding the accuracy of formulas or outputs and is not responsible for any decisions, outcomes, or losses resulting from the use of this tool.

What Is the Real Cost of Not Taking Supplier Discounts?

If you’ve ever wondered,Β β€œShould I take the 2% discount?” orΒ β€œIs it better to hold onto cash and pay later?”,Β this calculator is built for you.

The Cost of Credit Calculator shows the annualized cost of skipping an early payment discount and paying suppliers at full term instead. By entering your supplier terms (discount %, discount days, and full term days), the calculator reveals the implied interest rate you are effectively paying by delaying payment.

This tool is ideal for business owners, CFOs, controllers, and finance leaders who want to make smarter working capital decisions based on math, not habit.

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