![]() ![]() There are a number of factors to consider when determining how much of a cash discount you should offer for early payment. The screenshot below shows how payment terms are generally shown on an invoice:Įmail Download My PDF How Much of a Cash Discount a Seller Should Offer ![]() If you pay after 10 days, you must pay the full $1,000. In other words, if you pay in 10 days or less, the invoice can be settled for $980 instead of $1,000. On the invoice, these terms would be noted as 2/10 – net 30. If you pay the invoice within 10 days of receiving it, you may be able to deduct 2%, or $20, from the payment. Say you are a buyer and receive a $1,000 Net 30 invoice. Visit QuickBooks Example of How an Early Payment Discount Works Get started with up to 50% off QuickBooks Online. You can create custom invoices, add early payment discounts, and send automated reminders to let customers know payment is due. Managing early payment discounts is a breeze with QuickBooks. A $500 invoice would be discounted to $490. ![]() A common discount is 2/10 – net 30, which means buyers can earn a 2% discount by paying in 10 days. An early payment discount (also called a prompt payment or cash discount) is a reduction in an invoice balance when it’s paid before the due date.
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