It’s important for both parties to know that when goods are sold, what are the price of the item and the timing of the payment. It’s also good to know what are the stipulations if any that apply to the return of merchandise. Different companies quote their prices by using different methods. A lot of merchants will generally quote the price that they will like to sell it.

On the other hand, some merchants such as manufacturers or wholesalers will usually quote their prices as a percentage of their catalogue prices, generally around 30 percent or more, and this reduction I known as a trade discount. For example, if something is listed as $1,500 with a trade discount of 30 percent or $450 then the seller writes the sell as $1050, and the buyer records it as $1050. From there the seller can raise or lower the price depending on the quantity that is being sold. The terms of sales are usually on the sale invoice and tell the type of terms to the agreement.

In a lot of industries the payment is expected within a short time of the purchase. If it’s for 15 days then the invoice will have “n/15” (net 15) or “n/20” (net 20) which means that the amount is due 15 or 20 days later. In most industries a discount is usually offered for an early payment. This type of discount is called a sale discount which has the purposes for increasing a seller liquidly by reducing the amount of money associated with accounts receivable. An invoice with a discount may look like “3/10, n/20,” which that the purchaser can pay within 20 days and receive a 30 percent discount, or they can pay within twenty days and pay the full price for it.  To read the rest of this article please follow this link >>>>>

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