Cash Discounts

Cash discounts are calculated based on the check date and from the Cash Discount schedule for the product line that the product(s) on this order are from.  Unlike incentive discounts which are calculated from the order total, cash discounts are calculated from the payment amount as follows:

Cash Discount Example:

A cash discount applies to the payment so the net effect is the payment is increased by the applicable discount rate.

A payment of $10,000 when paid in a 5% discount period is calculated as

($10,000  /  (1 – .05))    -   $10,000    =    $526.32 cash discount

Incentive Discount Example:

An incentive discount applies to the order so the net effect is the order total is reduced by the applicable discount rate.

An order of $10,000 with a incentive discount of 5% discount is calculated as

$10,000 * .05 = $500 incentive discount

Cash discounts will reduce the net cost more than an incentive discount.