A cash discount, also known as a cash discount period or a sales discount, is a reduction in the purchase price of a product or service offered to a customer if the payment is made within a specified period. .Cash Discount It is a way for businesses to encourage prompt payment from customers and improve cash flow.
Here's an example to illustrate how a cash discount works:
Let's say a company offers a cash discount of 2% if the customer pays the invoice within 10 days. The customer receives an invoice for $1,000 for goods purchased. If the customer pays within the discount period, they would only need to pay $980 ($1,000 - $20 discount). However, if the customer delays payment beyond the discount period, they would need to pay the full $1,000.
started by gokuzeus78 on 25 Mar 23
Here's an example to illustrate how a cash discount works:
Let's say a company offers a cash discount of 2% if the customer pays the invoice within 10 days. The customer receives an invoice for $1,000 for goods purchased. If the customer pays within the discount period, they would only need to pay $980 ($1,000 - $20 discount). However, if the customer delays payment beyond the discount period, they would need to pay the full $1,000.