Indian BPO companies readiness in adopting to emerging dynamic discounting models

Discounting is a practice where suppliers can be paid early by their buyers in exchange for a discount on the goods or services they provide, and has been around since the beginning of business. Dynamic Discounting is an incremental step forward and is the practice where the cost of the early payment depends on how many days prior to the original due date the payment will be received. The earlier the payment is received, the higher the cost to the supplier. Dynamic discounting can help buyers reduce their cost of goods or services while providing suppliers an infusion of capital. When all the variables that determine the optimal pricing for early payment are considered, the end result is a working capital marketplace model that delivers more income to buyers and more attractive rates to suppliers as opposed to a static model that places serious limitations on all parties. This paper addresses the growing concern and adaptability of Indian BPO companies as well as global majors in that direction.