accounting

Y company offers its customers credit of 2/10,n 30. Most customers take advantage of the cash discount, mailing their payment to arrive on the 10th day following the date of the invoice. However X comany, Y largest customer, has recently begun sending payments to arrive on the 30th day after invoice, while still taking the 2 percent discount. Y company colletion department has been in toch with X company regarding the taking of the discount outside the discount period ,and X company response is that it deserves to take discount whenever payment is made. After all, it is Y company biggest customer. Identify Y company possible courses of action as well as the consequences of these actions.

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  1. Sometimes it "works" stating that you'd love to do that, but it is against company policy and if it's broken for one, everyone will want to do that. They might except a "smaller" discount for being late. It would depend on how much you want to do to keep that customer.

    Give someone an "inch" and they always want a "mile." It's best to adhere to company policy, saying that you'd "like" to break that rule, but you cannot. It could cost YOU your job!

    Sra

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