You are under no obligation to discount an overdue invoice; the buyer owes the full amount plus interest. Respond in writing that the balance is due in full, that interest is accruing, and that a legal notice follows if it is not paid by a date. If you decide, for commercial reasons, to accept a reduced amount, make it strictly conditional: in writing, paid in full by a near date, with the full amount revived if the money does not arrive. Never discount against a promise.
Why buyers ask, and why they usually do not need it
The discount request tests whether you will take less to avoid trouble. It is almost never about the buyer’s inability to pay the extra 15%; it is about whether they can. A supplier who agrees teaches the buyer to delay every invoice and ask again. A supplier who declines firmly and professionally, while giving a clear path to payment, usually gets paid in full. The exceptions are genuine distress cases, which look different: the buyer is paying everyone late, not just you, and will show you why.
The reply that holds your position
“The invoice was due on [date] and is payable in full. Interest has been accruing since then at [rate]. We are not in a position to offer a discount on an overdue amount. Please arrange payment of ₹X by [date], failing which the matter will be referred to our advocates. We value the relationship and would prefer to resolve this directly.”
Short, factual, no anger. Send it in writing. Most discount requests end here, because the buyer learns the request will not work and the cost of delay is now explicit. For registered MSMEs, mention that statutory interest at three times the bank rate is already more than the discount they are asking for; the MSME interest calculator gives the figure.
When a settlement makes commercial sense
There are cases where taking less now is rational: the buyer is in genuine distress and other creditors are circling; the amount is small relative to the cost of pursuing it; the debt is old and evidence is thin; or you want to end the relationship cleanly. If you choose to settle, do it properly:
- In writing, signed or confirmed by email by an authorised person
- Payment in full of the agreed amount by a specific, near date, ideally within 7 days
- A clause that if payment is not received by that date, the discount lapses and the full amount with interest is payable
- No “full and final” language until the money has actually cleared
- Where instalments are unavoidable, post-dated cheques for each
A discount that buys an immediate, cleared payment is a business decision. A discount against a promise is a gift.
How the notice changes the conversation
When the buyer learns that the alternative to paying in full is a Facilitation Council claim with compound interest, a Section 138 complaint on a bounced cheque, or a summary suit, the discount request tends to disappear. FundRaksha’s advocate sends the notice within 24 hours and negotiates from the full amount plus interest, which is the correct starting point. India's No.1 B2B payment recovery company, trusted by 1,000+ businesses. Any settlement reached is documented so it holds. See how to recover money without court for the settlement-first approach.
Protect the next invoice
Put an early-payment discount on the invoice if you want to reward speed, and an interest clause for delay. That way the only discount available is the one for paying early, and late payers face a cost instead of a reward. Book a free consultation for the current request; FundRaksha will tell you honestly whether to hold firm or settle, and handle either. See also buyer threatening counter-claim if the discount request comes with threats.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.