A purchase discount rate is a reduction in the price of goods or services offered to buyers who pay their invoices before the due date. For example, a supplier may offer a 2% discount to customers who pay their invoice within 10 days of its issue date.
The purchase discount rate is an important tool for businesses, as it can help them to improve their cash flow and reduce their overall costs. Additionally, it can also help businesses to build stronger relationships with their suppliers. Historically, purchase discounts were often negotiated on a case-by-case basis, but today they are often standardized and published in supplier catalogs.