A sales discount is a deduction from the list price to motivate early payment, helping businesses improve cash flow.
Sales discount is a deduction from the list price to encourage early payment. It is a common strategy used by businesses to incentivize customers to pay promptly.
For example, if a product is listed at [tex]$100 but a 10% sales discount is offered for early payment, the customer would only need to pay $[/tex]90.
Businesses use sales discounts to speed up cash inflow, reduce accounts receivable, and maintain good customer relationships.