Invoice Early Funding Cost Comparison
Compare immediate cash, released reserves and annualized financing cost for entered invoice-funding offers.
YOUR CALCULATION
Result
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Calculation steps
Work through one step at a time or reveal the complete calculation. The steps use your current inputs.
How to calculate
Deduct upfront fees and withheld reserve from invoice face for immediate cash. Treat the reserve as fully released at the original due date and calculate the cost of the net advanced amount.
Immediate cash=invoice−fees−reserve; period financing cost=(invoice−reserve)/immediate cash−1
Worked example
A 10000 invoice with fee 2%, no reserve and no fixed fee advances 9800. Waiting would receive 10000 at maturity; the period financing cost is 200/9800≈2.04082%.
Assumptions and input details
2–10 hypothetical offers. Reserve is assumed fully returned at the original due date; default, recourse, collections, late payment and taxes are not modeled. Fee percent uses invoice face. Immediate proceeds must be positive. Annual effective cost repeats the same financing period and is not statutory APR or an actual repeat-financing offer. No live market data or national tax rules are inferred. Enter consistent amounts in one currency unless explicitly stated otherwise.
References: OpenStax: early-payment trade discounts
Using this calculator
Can I enter my own problem?
Yes. Replace the example values with your own inputs. The result, calculation steps, tables and applicable diagrams update from those inputs. Blank or invalid values clear the result; example values are never silently substituted for missing inputs.
Are the results exact?
Results use floating-point arithmetic and displayed rounding. Read the formula, assumptions and any stated data precision before interpreting the result.
Is my input uploaded?
The calculation runs in your browser. No account, file upload or external AI service is required. Inputs are not saved between page reloads.
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