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Finance Tool

Credit Period Calculator — Know the Real Cost of Giving Credit

Calculate receivables tied up in credit and the monthly interest cost of funding customer credit.

Use the Calculator

Formula & How It Works

Receivables = (Monthly Billing ÷ 30) × Credit Days
Monthly Interest = Receivables × Rate ÷ 100 ÷ 12

Worked Example

₹50L/month, 30-day credit, 12% rate, supplier 21d → Receivables ₹50L | Cost ₹50,000/month | Net gap 9 days

When to Use This Calculator

  • Calculate true cost of credit
  • Decide early payment discount viability
  • Compare net working capital across credit terms

Frequently Asked Questions

Days buyer gets to pay after invoice.
Longer credit = more capital locked in receivables.
Balance customer demand vs your cash flow. Net gap = credit given − supplier credit.
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