What term refers to a discount offered by a seller for early invoice payment?

The term that refers to a discount offered by a seller for early invoice payment is often known as a prompt pay discount. This type of discount encourages customers to pay their invoices sooner than the standard payment terms, usually resulting in a percentage reduction in the total amount due. By providing this incentive, sellers can improve their cash flow and reduce the time between sale and receipt of payment.

Understanding the concept of prompt pay discounts is important in a pharmacy setting because it can affect pricing strategies and payment procedures within the business. Encouraging timely payments can aid in inventory management and financial planning. Other options, such as cash rebate or credit term, have different meanings in a financial context and do not specifically refer to the discount for early payment.