Difference between Cash and Trade discount: A trade discount is a reduction in the price of a product or service that is given to a customer as a result of the customer’s relationship with the company, such as being a regular customer or purchasing a large volume of goods. Trade discounts are usually expressed as a percentage of the regular price.
A cash discount is a reduction in the price of a product or service that is given to a customer for paying their invoice promptly. Cash discounts are usually expressed as a percentage of the regular price and are offered as an incentive for the customer to pay their invoices within a certain period of time, such as 10 days.
The main difference between trade and cash discounts is the reason for the discount. Trade discounts are given to customers based on their relationship with the company, while cash discounts are given to customers for paying their invoices promptly.
