Dynamic discounting
In accounting, dynamic discounting means a buyer-funded early-payment arrangement in which the discount slides with how early a bill is paid, rather than a fixed 2/10 net 30. The buyer pays from its own cash; no third party is involved.
Not a rule. Commercial practice — not codified. US GAAP governs recognition, measurement and presentation, not bookkeeping mechanics. Sources
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- supply chain finance (a funder pays the vendor)
- early-payment discount (the fixed version)
Nearby in the catalog
No component names this concept outright. These sit in the same part of the system.
Also in Payables
Defined in Lexicon. This page is generated from that document, so the two can't disagree.