Reverse factoring calculator
What early payment costs a supplier, and what the extension is worth to you.
How it works
Discount = invoice value × rate × (days ÷ 365)
Reverse factoring lets a supplier be paid early against the buyer's credit rating rather than their own, usually at a better rate than they could get alone. The discount is priced on actual/365, the money-market convention these facilities are quoted on. The effective annual rate shows what the discount really costs the supplier once it is annualised — it is always higher than the headline rate, and that gap is the number worth checking before signing.
This tool runs entirely in your browser. Nothing you type is sent to a server, stored or logged.
Frequently asked questions
- Who pays the discount?
- The supplier, out of the invoice. They receive the invoice less the discount; you pay the full amount later, on the extended term.
- Why is the effective rate higher than the discount rate?
- Because the discount is charged on the full invoice but the supplier only receives the net amount, and for part of a year. Annualising that gap always produces a higher figure.
- Is 365 or 360 correct?
- Both are used. This calculator uses actual/365, which is standard for these facilities in Europe; a 360-day basis makes the cost about 1.4% higher. Check which your provider quotes.