Cash Discounts Policy
Almost all the companies provide Cash Discount on their Sales. Cash Sales provide security for Bad Debts & find liquidity. Cash discount of COD (Cash on Delivery) is a commercial discount provided by the companies to its Dealer /Customers if it receive payment immediately after receipt of material/Service by the Customer. Following is an example of Cash Discount Policy / Scenario provided by an Company:-
Customers/ Dealers/ OEMs/ Distributors are entitled for the cash discount based on the company’s overall policy as described below.
Almost all the companies provide Cash Discount on their Sales. Cash Sales provide security for Bad Debts & find liquidity. Cash discount of COD (Cash on Delivery) is a commercial discount provided by the companies to its Dealer /Customers if it receive payment immediately after receipt of material/Service by the Customer. Following is an example of Cash Discount Policy / Scenario provided by an Company:-
Customers/ Dealers/ OEMs/ Distributors are entitled for the cash discount based on the company’s overall policy as described below.
- Cash discount allowed @ 3.00% on advance or against delivery (30 days Credit Period) and 1% addition Cash Discount if payment received within 30 days from date of delivery.
- If the payment terms are in cash, no cash discount is allowed.
- If the Dealers/ Distributors/OEMs make the payment within 30 days of the invoice date, they are allowed cash discount on the total value of the invoice.
- The cash discount is calculated on monthly basis by SM-S&D at HO for the eligible Dealers/ Distributors/OEMs. The amount is decided by a committee comprising of RMH, GM F&A and MD.
- Based on the above calculations a credit note will be prepared & Adjusted with the customer Outstanding (Current Account).
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