Business
Invoice Payment Impact Calculator
Enter invoice amount, days early or late and an annual rate to see timing cost or saving.
What does paying early or late cost?
Paying an invoice early or late has an interest-like cash effect even when no bank loan is drawn. This calculator applies simple interest: amount × annual rate × days ÷ 365. Positive days mean you paid late relative to the reference date (a financing cost at your chosen rate); negative days mean you paid early (a saving or opportunity cost framed the same way). A £12,000 invoice fourteen days late at 8% is roughly £36.82. Use your overdraft, WACC or supplier early-pay discount rate — whichever decision you are testing. Working-capital timing also shows up in the cash conversion cycle; margin context sits in gross margin.
Worked example
£12,000 × 8% × 14/365 ≈ £36.82 late-payment impact. Paying 14 days early at the same rate is a £36.82 early-payment figure.
Limits and assumptions
Simple interest, 365-day year. Not compound APR, statutory late-payment interest or contractual penalty tables.
Frequently asked questions
What rate should I enter?
Use the cost of capital or overdraft rate you care about, or the early-settlement discount rate a supplier offers.
Why negative days?
Negative days mean payment earlier than the reference — the same formula reports the cash timing benefit or opportunity cost.
Is this compound interest?
No — it is a straight-line day count for quick comparisons.
Does it include VAT?
Enter the cash amount you actually pay (with or without VAT) consistently with how you fund payables.