Oracle Exam 1Z0-1055-24 Topic 6 Question 9 Discussion

Comprehensive and Detailed In-Depth

Oracle Payables Cloud, enhanced with Adaptive Intelligence (AI), offers a feature known as Early Payment Discounts. This functionality enables organizations to optimize their cash flow by taking advantage of discounts offered for early invoice payments.

Key Features of Early Payment Discounts:

Variable Annual Percentage Rate (APR) Based on 'Days Paid Early' (Option B):

The discount amount is calculated using a variable APR, which is determined based on the number of days the payment is made ahead of the due date. The earlier the payment is made, the higher the discount percentage applied.

The Earlier the Payment, the Greater the Discount (Option C):

This principle aligns with the time value of money, where paying invoices earlier results in greater discounts. The discount decreases as the payment date approaches the invoice due date.

Clarification of Option A:

Eligible Discounts Decrease on a Sliding Scale Based on the Supplier's Discretion:

While the discount offered decreases over time, this scaling is typically predefined in the payment terms agreed upon between the buyer and the supplier, rather than being adjusted at the supplier's discretion on a case-by-case basis. The terms are set during the establishment of the early payment discount program and are systematically applied, ensuring consistency and predictability in discount calculations.

Therefore, Option A is not a feature of the early payment discounts as implemented in Oracle Payables Cloud with Adaptive Intelligence.

Early Payment Discounts

Early Payment Discount Offers

Once enrolled, a supplier discount is set and applies to all payments indefinitely, until supplier unsubscribes.