The annual plan is 15% off. That cash costs about 35% a year.

Prepay discounts are usually priced against the cost of borrowing. That is the wrong benchmark, and it flatters the offer considerably.

By Steve 5 min read
Abstract bridge artwork for The annual plan is 15% off. That cash costs about 35% a year.

Almost every subscription, retainer and maintenance contract eventually acquires an annual option: pay for the year up front, take 10%, 15%, sometimes 20% off. The reasoning is rarely written down. It usually amounts to a feeling that cash now is better than cash later, and that a discount is a cheap way to get it. It is not cheap. It is one of the most expensive forms of funding a small business regularly gives itself, and the reason it goes unnoticed is that the cost never appears as an interest…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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