The primary purpose of cash)settlement discounts is to:

Question

Quizplus · Accepted Answer

The primary purpose of cash settlement discounts is to encourage the customer to settle their account early. By offering a discount for paying the invoice within a certain timeframe, the seller is incentivizing the customer to pay sooner, which can improve cash flow and reduce the need for collections efforts. Option A is not correct because the point of offering cash settlement discounts is not to encourage the customer to buy on credit, but to encourage them to pay promptly if they do choose to buy on credit. Option B is incorrect as there are other pricing strategies that can be used to quote prices to different customer groups. Option C is not fully correct as while cash settlement discounts do reduce the invoice price, this is not the primary purpose of offering them.

The Primary Purpose of Cash)settlement Discounts Is To