By choosing our dynamic invoice discounting software, you are entering the world of state-of-the-art technology and improved business operations, where a high-quality solution can make a significant difference between success and failure.
Dynamic discounting software by STAGE11
Some main features you can expect from Stage11 dynamic discounting software are:
- Fully automated invoice discounting on early payments
- Instant dynamic or fixed pricing & invoice offers
- AI-powered invoice reading and data extraction
- Online electronic-ID verification and sign-off
- Easy integration with accounting and core-banking software
- Open API connectivity = build on top of our solution
What is invoice discounting?
Traditional invoice discounting is a way to use unpaid invoices as collateral for a loan. The loan is issued by a finance or factoring company that makes money from interest rates on the loan and other maintenance fees. Invoice discounting is a good opportunity for SMEs to find quick funds and grow their business network more quickly and efficiently.
The recently invented Dynamic Discounting simplifies the whole process since the invoice discount is offered directly to the buyer upon early payment.
The practical process
The invoice discounting process starts out by sending invoices to customers as usual, including the amount due, payment date, but also an offer for early payment discount. Traditional invoice discounting platform automatically generates an offer for the same invoice, which upon acceptance is verified by the platform administrator. You receive the cash for your business expenses usually within a few hours. When the invoice is paid, you repay this loan to the discounting platform provider, including additional fees and interest rate.
In Dynamic Discounting scenario the buyer receives the option of price reduction in exchange for paying the invoice before the due date. This is usually around 2% discount for payments settled within 10 days from invoice issue date. However, our platform also offers the opportunities of sliding scale discount and calculation on dynamic discount depending on when exactly the payment was made.
The dynamic discounting process can be performed as:
- Internal, or direct process between supplier and buyer
- External, where factoring company or financial institution is involved
Internal dynamic discounting is simplified and requires no specific license since you communicate the entire deal with your customer directly, using our basic module.
External dynamic discounting is on the other hand involving many entities at the same time and requires larger administration and managment of the approved invoices and purchase orders, fees, and other financial terms involved. Both versions are easily managed on our plattform.
Unlike other types of invoice financing, dynamic discounting can be performed in two directions:
- Supplier to buyer as a standard B2B process
- Buyer to supplier, where the process is initiated by the buyer, similar to reverse factoring
In both scenarios dynamic discounting creates a win-win situation, where suppliers are being paid earlier to continue investing in new production, while byers earn a risk-free return instantly.
Differences between traditional and dynamic invoice discounting
One major difference between these two types of invoice discounting is how the customers notice it. Traditional invoice discounting is confidential in the sense that your customer will not see that you are using it. Dynamic discounting is on the other hand presented to the customer directly upon issuing an invoice.
When using any of them, you are still in control of collecting the payments. A common case is that businesses that grow quickly use invoice discounting to speed up cash flow for new investments.
As any other Stage11 financing platform, dynamic discounting software offers features like direct online pricing and fast approval processes. You can immediately receive the information regarding the costs and benefits of discounting to make the best decision to move your business forward. This financing model surpasses traditional banking due to many reasons, including:
- Greater agility and flexibility
- Retained control over the sales ledger
- Good effect on business relations between seller and buyer
- No asset as collateral required
Cloud-based SaaS solution platform
Our dynamic invoice discounting software is a cloud-based SaaS (Software as a Service) solution. Depending on the client`s needs, it can also be offered as a Private Cloud (on-premise), with dedicated server resources. This means that the software does not need to be installed locally. A cloud-based solution means flexibility and mobility. Security and loss prevention are two other good reasons to use a cloud-based platform. Hosting operations will be provided as close as possible to your business and target market. Cloud-based SaaS solutions also mean that you only pay for using the service, not full ownership of the platform.
White label dynamic discounting software
Stage11 platforms are all white label financial solutions. We provide the platform, but you can still brand it using your own brand. This allows you to use our software expertise to showcase and grow your brand online. We are also open to the possibility of providing the application source code under specific terms.
