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Accounting Terms
Discount
Definition
A reduction in the standard price of goods or services.
Overview
Discounts can be percentage-based or fixed amounts. They're used to incentivize purchases, reward loyalty, or clear inventory.
Example
A 10% discount on a $1,000 invoice reduces the total to $900.
Best Practices
Clearly show original price, discount amount, and final price. Document reasons for discounts.
Common Mistakes to Avoid
Not documenting discounts
Excessive discounting hurting margins
Inconsistent discount policies
Frequently Asked Questions
Should I offer discounts?
Strategically, yes—for early payment, volume purchases, or customer retention. Avoid undermining your value.