Request For Early Payment Discount

When and how to use this letter

Send this proposal when your cash position is strong enough to pay early consistently — the offer only works if you can actually deliver accelerated payment invoice after invoice. It carries the most weight with vendors where you are a significant customer, so mention your annual volume explicitly; a buyer representing six figures of revenue gets the finance director's attention, while a small account may only merit a standard published discount.

Propose concrete terms rather than asking vaguely for "a discount." The classic formulation is "2/10 net 30" — 2 percent off for payment within 10 days on 30-day terms — but scale it to your situation and always calculate the annualized return: a 2 percent discount for paying 20 days early equates to roughly 36 percent annualized, which beats almost any safe use of your cash.

Negotiate the mechanics, not just the rate: which invoices qualify, how the discount is applied (credit note vs. net payment), and what happens if a payment slips a day late. Get the agreed terms confirmed in writing and reflected on future invoices or a side agreement so there is no argument at payment time.

A non-obvious tip: time your proposal for the vendor's cash-tight periods — often month-end, quarter-end, or seasonal troughs. A finance manager staring at a quarterly cash target will agree to discounts in March that they would refuse in January, and you can lock the arrangement in for the whole year.

Frequently asked questions

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