Discount lost

A discount lost is an opportunity to take a deduction on a payment to a supplier that has offered a reduced payment in exchange for paying early. A discount lost usually occurs when the buyer either does not have sufficient funds to make an early payment, or because a processing error failed to reveal the existence of the discount offer. Discounts lost tend to represent a relatively high effective interest rate, and so are to be avoided as much as possible.

Related Courses

Payables Management