‘Discounts‘ is a business term with four distinct meanings: 1) Original Issue Discounts, 2) Incentives for customers to purchase, 3) Early payment reduction and 4) Discounted cash flows. All four meanings have the same underlying element of getting more for less.
Many of the business performance standards are measured against a baseline. For the bulk of production and operation performance tools the baseline is net sales. The key to an accurate performance standard is having an exact sales figure.
The term ‘discounts’ is a broad and varied meaning word when it comes to use in business. It literally has four distinct definitions. Each definition is used within a certain context of business. The first and most dollar expensive use is with original issue discount related to bonds in the market. The second use and most common is as an incentive in business.
