Early Payment Discount Accounting is a financial practice of offering discounts to customers who pay their invoices before the due date. This allows businesses to be paid quicker and manage their cash flow more efficiently. The goal is to entice customers to pay early, and in return, companies must record the discount as an expense. Companies also need to provide detailed reports showing the type and amount of discounts taken by each customer throughout the year as well as keep track of any unclaimed discounts. Early Payment Discount Accounting offers numerous benefits for businesses – improved cash flow, increased revenue and fewer overdue accounts.