Ask Joey ™ a Question

How to read early pay discount terms on an invoice?

If a company offers any early pay discount on your invoice, you better know how to interpret it! In the visual below, you can see how to break down terms that would be “5/10, net 30”. Basically, you would receive a 5% discount on your invoice if you pay the invoice 10 days from the invoice date. If you wait more than 10 days, then you might as well wait until 30 days, as you would no longer be able to receive the discount!


You might also be interested in...

  • What is the journal entry to record an early pay discount?

    Some companies offer an early pay discount to their customers if they pay the invoice early. For example, if the invoice is due within 30 days, then the company might offer a 5% discount if they pay within 10 days. The terms would be 5/10, net 30. So if the company pays within 10 days, […]