Discount Capture

Demica’s Discount Capture solution enables corporates to efficiently capture attractive early payment discounts offered by suppliers. Demica’s platform can handle the identification of discounts offered by thousands of suppliers with payment gateway integrations enabling us to make payments automatically to maximise the value of the discount captured and achieve the highest P&L benefit. If the client does not have sufficient working capital to make early payments, Demica can arrange third party funding lines to finance the programme. With supplier discounts ranging from 2% – 10% for early payment, corporates can achieve significant P&L benefit by reducing their cost of goods sold.

Want to know more?

If you would like to speak to us about our solutions, please contact:
Giovanni Lazzeri

Giovanni Lazzeri

Director - Working Capital Solutions

Languages EN IT

+44 (0) 20 7450 2551 Monday to Friday, 08:00 to 19:00 Contact Giovanni

HOW DOES IT WORK?

Suppliers often offer attractive early payment discounts to customers either because they have a lower credit rating and value early payment or because the supplier has reached internal credit limits on its customer and wish to reduce exposure while continuing to trade. These conditions create attractive opportunities for Demica’s Discount Capture solution.

Our flexible solution can be established to automatically calculate the applicable discount, select eligible payables, create a credit note for booking in a client’s ERP to adjust VAT and then make payment. 

Demica’s clients immediately benefit from lower cost of goods sold, increased EBITDA and a higher equity valuation due to the improved profitability.

Our solution supports all forms of early payment Discount Capture including the German discount solution SKONTO and Spanish structures.

The impact on working capital can be mitigated, if required, by using third party funding lines that we arrange either with your relationship banks or with Demica's Investor Partners.

Demica has extensive experience in establishing Supply Chain Finance solutions in various formats. Discount Capture, powered by Demica, provides a valuable bank agnostic solution that works seamlessly with other forms of Supply Chain Finance including Dynamic Discounting.  We have had particular success combining it with a Payment Extension structure: the profit captured from the discounts pay for a bank funded extension – in essence doubling DPO at zero cost to the client.

With early payments already agreed in many contracts or simply added by a one page contract variation, the decision to take the discount is taken by our client (as opposed to the supplier) resulting in there being limited need to onboard the supplier to the platform. This makes rolling out the programme extremely easy. One of Demica's clients automatically takes discounts on over €1bn of supplier spend within 12 months of launch.  

HOW DOES DEMICA DELIVER THIS?

Demica can undertake several different roles in a Discount Capture structure

ARRANGER

  • Access to over 400 global banks, institutional investors, and alternative finance providers  
  • Managing the complete end to end transaction process
  • With over $3.2bn of SCF transactions live, we have a unique understanding of investor appetite 

Advisor

  • Analysis of the buyer's vendor terms to identify the benefits of implementing a Discount Capture programme
  • Analysis of the impact on covenants and inter-quarter financing benefits against discounts offered to ensure correct selection of eligible payables

servicer

  • Advanced technology platform with market leading interfaces & payment gateways
  • Demica’s advanced rules engine enables clients to only fund inter-quarter payables ensuring covenant headroom is maintained during reporting periods

THE DEMICA ADVANTAGE

For Corporates

  • Material P&L improvement from the reduction of cost of goods sold
  • Fully automated solution from the selection of eligible invoices, credit note creation and supplier payments to maximise the discounts captured
  • Access to deep pools of capital to fund structures if the client has insufficient working capital
  • Ability to optimise the use of Discount Capture, Supply Chain Finance and Dynamic Discounting programmes 

For Funders

  • Opportunity to deploy capital efficiently and in scale 
  • Faster deployment than Supply Chain Finance programmes
  • No supplier onboarding or KYC collection required on suppliers
  • Excellent risk adjusted returns
  • End-to-end programme management 

CLIENT TESTIMONIALS

"Demica’s solution enabled us to benefit from early payment discounts offered by our suppliers. The solution works seamlessly with limited supplier onboarding and full integration with our funding partners”

Group Treasurer
-- Global Corporate

"We decided to engage Demica to enable us to reduce the amount of manual processing being conducted within our back-office teams. Demica’s solution enabled us to automate the processing of early payments while reducing our cost of sales”

CHIEF Financial officer and Group Treasurer
-- Global Corporate

Want to know more?

If you would like to speak to us about our solutions, please contact:
Giovanni Lazzeri

Giovanni Lazzeri

Director - Working Capital Solutions

Languages EN IT

Giovanni has more than 20 years of experience in origination, structuring and execution of domestic Italian and Pan-European structured finance transactions for corporates, financial institutions and public sector entities. He is a qualified chartered accountant and legal auditor in Italy.
+44 (0) 20 7450 2551 Monday to Friday, 08:00 to 19:00 Contact Giovanni

CASE STUDIES

Illustrating the depth of our client relationships, we have highlighted a few programmes powered by Demica

VIEW ALL CASE STUDIES