Keywords: dynamic discounting, purchase to pay, procure to pay, P2P, Mediafly, Carson Conan

Technology supplier finds benefit with dynamic discounting

Matthew Garrow-Fisher | News | 24 May 2012

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Dynamic discounting can be used by suppliers to control the timing of payments and ensure that payment processes are accelerated. For small suppliers in particular, the system could save them from closure.

One technology supplier, Mediafly, has turned to dynamic discounting and e-invoicing, only to record triple-digit growth in little over a year.

The Chicago-based firm, which creates cross-device, business media solutions for Fortune 500 companies, turned to dynamic discounting software, giving customers the chance to pay early in exchange of discounts based on a sliding scale.

Explaining the benefits of the system, Carson Conant, Chief Executive Officer of Mediafly, told TechTarget.com that the company knows when a payment will come through, which is often early.

He described one order worth around $700,000 that took just 14 days to come through rather than 60 days.

"We got that deal done in record time because we have this capability we wouldn't have had without this discount program," he explained, adding that the cost of the discount on the company was "what we might spend at a happy hour for the engineering team".

Since using dynamic discounting, Mr Conant called it a "game changer" and has allowed the company to take on projects it might not have been able to fund without the extra capital.

Indeed, he explained that contracts taken on by the firm can last years and invoices are often six-figure deals. During the poor economic climate, this had led to customers delaying their payments to more than the 60-day limit, which can have a devastating effect on small firms.

"For a small company like us, and a very nimble company, that has a lot of effect on how you deploy capital," he told the news provider.

The chief executive suggested that dynamic discounting could benefit the wider economy because it allows smaller suppliers to access finance without going through traditional means such as a conventional loan.