Sales discount definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Sales discount can be defined as: Term used by a seller to describe a cash discount granted to a buyer who pays within the discount period. Sales discount is a discount, discounts lowering the sales price, but sales discount is usually used in more of a specific way then just any discount, sales discount generally being granted for early payment, sales discount being used as a tool to increase cash flow. One confusing aspect of understanding sales discount is knowing what side of the transaction we are on. Are we the seller giving the sales discount or the buyer? We generally think of sales discount from the perspective of the seller, the seller giving the discount. The buyer receiving the discount would call the discount a purchase discount.
