How to Calculate a Sales Discount

by Carter McBride; Updated September 26, 2017
Calculating sales discounts

In business, often one company will offer a discount to another company if the company pays its bill early. Companies express sales discounts in specific terms. These terms look like the example 2/10 n/30. This term means, if the company pays in 10 days, they receive a 2 percent discount. The full bill is due in 30 days. Once a company has these terms, it is a matter of performing simple math to determine the discount.

Step 1

Determine the sales terms on the invoice. For example, an invoice uses the terms 2/10, n/30 for the sale of $100,000 in widgets.

Step 2

Determine if you qualify for the discount. In the example, the company pays eight days after the invoice date, so it will qualify for the discount.

Step 3

Multiply the discount rate by the invoice price. In the example, 2 percent times $100,000 equals a discount of $2,000.

About the Author

Carter McBride started writing in 2007 with CMBA's IP section. He has written for Bureau of National Affairs, Inc and various websites. He received a CALI Award for The Actual Impact of MasterCard's Initial Public Offering in 2008. McBride is an attorney with a Juris Doctor from Case Western Reserve University and a Master of Science in accounting from the University of Connecticut.

Photo Credits

bibliography-icon icon for annotation tool Cite this Article