Glossary

Receivables advance

Exchanging a future withdrawal date for money available today, in return for paying a discount rate.

Receivables advance is the operation in which the seller exchanges an amount they would only receive in the future, such as an installment sale or the standard D+3 withdrawal, for money available immediately. In exchange for the early liquidity, the financial institution charges a discount rate, a percentage deducted from the advanced amount.

It makes sense when the cost of the discount rate is lower than the cost of not having cash available to invest in ads or operations in the present moment.

A payout term is a cash flow decision, not a contract line. The gap between getting paid in D+3 and D+15 is working capital sitting still when it could be buying traffic today.
Wellington CostaGlobal Payments Specialist

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Written by Wellington Costa Global Payments Specialist

Writes about payment infrastructure, checkout conversion and chargeback reduction. Works directly with digital product sellers, affiliates and creators selling to more than 40 countries through Mundpay.