A negative cash discount is an attempt by sellers to improve their liquidity positions,reduce their bad-debt losses,and cut collection expenses.

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A negative cash discount is a discount offered by sellers to buyers who pay their invoices within a certain period of time. This is also known as an early payment discount. However, a negative cash discount is the opposite of this, in which the seller charges a penalty or extra fee to buyers who do not pay their invoices within the specified time frame. This can encourage customers to pay on time, thus improving the seller's liquidity position, reducing bad-debt losses, and cutting collection expenses.

A Negative Cash Discount Is an Attempt by Sellers to Improve