u/Other-Range-5822

We have a supplier offering 2% net 10 instead of our normal net 30 terms and on paper taking the discount seems like the obvious choice. I'm trying to figure out is how people think about this when you have a decent amount of AP going out every month. Cash isn't particularly tight for us but paying 20 days earlier across multiple vendors obviously starts pulling forward a meaningful amount of cash.

Right now this is only one supplier but it got me wondering whether we should have an actual rule for these discounts instead of deciding invoice by invoice so for any of you guys who regularly get early payment terms are you generally taking 2% net 10 whenever liquidity allows or is there a point where you'd rather hold onto the cash until the normal due date?

We've had about $180k in our Chase corporate checking account for close to two years now and everything was working fine hence it was easier to just let everything remain the way it was.
Then I said I’m going to do some basic calculations.

Now bear with me because I tried to be very thorough! With 0.01% APY on $180k we made $18 last year. EIGHTEEN DOLLARS. On the other hand Tbills and money market accounts have been yielding about 4% or more for close to two years now. Hence we were losing close to $7k in a year which was a significant amount for my business.

I retained some of the money in the chase account to keep the automatic withdrawals running but moved most of it to an account where I could earn up to 4.35% interest while maintaining an APY of 2% on the checking account. There is an automatic sweep that takes any extra cash from the checking account and parks it in higher yielding investments.
To be perfectly clear I am not an expert in finances. I’m a guy that operates a 12 people company and managing treasuries has never been one of my concerns but still $7k is a substantial number(at least for me it is).