Discount payment terms

Payment discount, such as "2 net 10," or a 2% discount if paid in 10 days, is good business to encourage customers who have the cash to pay early and save money. It can be a way of differentiating your company from competitors who don't offer discounts.

The key to offering discounts is to be able to turn that quick cash into savings for your business. If you can't, you've just cost your business 2%.

Remember, offering payment discounts alone will not solve aging accounts receivable. It's part of the total credit and collection best practices your company must employ.