How this calculator works
Offering “2/10 net 30” means giving up 2% of the invoice to be paid 20 days sooner. Annualised, that is cost = (discount ÷ (100 − discount)) × (365 ÷ days saved).
For 2/10 net 30 the answer is about 37% a year. That is the number worth holding onto, because it is the figure the decision actually turns on — and it is dramatically higher than most people assume from looking at “2%”.
When it is still worth it
A 37% annualised cost is not automatically a bad deal. It is worth paying when your own cost of capital is higher, when the cash converts into something that earns more, or when the discount reliably removes collection effort and late-payment risk on accounts that would otherwise need chasing.
It is a bad deal when customers take the discount and pay late anyway, which is common enough to check before renewing the terms. That pattern shows up as a widening gap between the discount given and the change in DSO.
The uptake field matters more than it looks
The annualised rate is a per-invoice figure. The second output multiplies it by how much of your book actually takes the discount, which is what turns an abstract percentage into a line someone has to defend in a margin review.