Payment terms dating

There are many purposes for discounting, including to increase short-term sales, to move out-of-date stock, to reward valuable customers, to encourage distribution channel members to perform a function, or to otherwise reward behaviors that benefit the discount issuer.

Some discounts and allowances are forms of sales promotion.

A trade rate discount, sometimes also called "trade discount", is offered by a seller to a buyer for purposes of trade or reselling, rather than to an end user.

Similar to the Trade discount, this is used when the seller wishes to improve cash flow or liquidity, but finds that the buyer typically is unable to meet the desired discount deadline.

If a payment becomes overdue, businesses will rely on the timeline provided by the invoice date and the terms to take collection activity.

If customers receive a discount for early payment, these dates determine whether the invoice was paid in sufficient time to receive the bonus.

Businesses that send out a lot of invoices should have a system to generate unique invoice numbers for each sale.

A sequential numbering system ensures that invoices are easily tracked when they are produced and paid, even if several invoices are produced with the same invoice date.

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