Signal · Cash

Free-float giveaway

Supplier bills settled well before their due date without an early-pay discount to justify it — money leaving faster than it needs to.

Cash

What the signal measures

Supplier bills settled well before their due date without an early-pay discount to justify it — money leaving faster than it needs to.

Why it matters

Paying supplier bills materially before their due date, without an early-pay discount to justify it, is a silent transfer of your working capital to your supplier's balance sheet. It is a common pattern in owner-run businesses because the owner "likes to pay promptly" — an admirable habit that costs real money on a Net-30 bill settled on day 3. Compass quantifies the free float you are giving away.

How to act on it

For any bill you are settling >7 days ahead of due, either (a) negotiate an actual discount for early pay — 1-2% is common — or (b) pay on the due date and hold your working capital. The drafted action is a supplier-specific email opening the discount conversation.

Worked example — fixture consultancy

On the fixture, Regus Offices and the SaaS suppliers are paid within days of receipt rather than at the end of terms. Compass estimates the £ of free float being given away and drafts a template for the discount ask — some suppliers will say no, some will offer 1%, and either result is more useful than the current default.