Cash discount
Cash discount is the amount by which a seller is willing to reduce the invoice price in order to be paid immediately, rather than in the future. A cash discount might be 2/10, net 30, which means a 2% discount if the bill is paid within 10 days and otherwise the entire amount is due within 30 days.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Cash discount. The amount by which a seller is willing to reduce the invoice price in order to be paid immediately, rather than in the future. A cash discount might be 2/10, net 30, which means a 2% discount if the bill is paid within 10 days and otherwise the entire amount is due within 30 days.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
