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