What is an early payment discount?
An early payment discount is a reduction in price by a certain percentage in exchange for accelerated payment by the trade partner. It is voluntary and its terms may be agreed individually between the parties.
It involves tax. If a contractor gives a discount to a client, it must be stated on the invoice.
Requirements for the early payment discount:
- Specific discounts and rebates must appear on the invoice.
- Please provide the exact amount of the discount.
Example:
The entrepreneur issued an invoice for the gross amount of PLN 1,500 (net amount: PLN 1,219.51, VAT: PLN 280.49), where VAT is 23%.
A contractor offers the trade partner … – percentage of early payment discount on the gross value.
- On the invoice, please enter the full value owed as a result of the sale as well as the percentage value of the discount.
In this situation, you also need to write specific statement on the invoice, such as:
“If an invoice is paid within 14 days, a 4% discount is given”and then the amount due is reduced by the early payment discount.
Fast billing with Northgate Logistics through the ALEO platform is the easiest way to efficiently turn invoices into money.
Beata Krzyżanowska
Chief Financial Officer
E: beata.k@northgatelogistics.plT: +48 696 001 507
