Off-invoice allowance
Off-invoice allowance is a discount or rebate that a manufacturer offers to a retailer or distributor at the time of sale. This allowance is deducted directly from the invoice amount, hence the name „off-invoice“.
Off-invoice allowances can be given for various reasons, such as promoting a new product, encouraging bulk purchases, or rewarding loyal customers. These allowances are usually temporary and can help boost sales and create goodwill between the manufacturer and the retailer.
For example, a manufacturer may offer a 10% off-invoice allowance to a retailer for purchasing a minimum quantity of their products. This discount is applied directly to the invoice total, reducing the retailer’s cost of goods sold.
It is important for both parties to clearly define the terms of the off-invoice allowance, including the duration of the promotion, the qualifying criteria, and any limitations or restrictions. This helps to avoid misunderstandings and ensures that the allowance is used effectively to achieve the desired objectives.
Benefits of off-invoice allowances:
- Increased sales: Off-invoice allowances can incentivize retailers to purchase more products, leading to increased sales for the manufacturer.
- Brand promotion: Offering off-invoice allowances can help promote a manufacturer’s brand and products, attracting new customers and retaining existing ones.
- Relationship building: By offering off-invoice allowances, manufacturers can strengthen their relationships with retailers and distributors, fostering loyalty and collaboration.
Overall, off-invoice allowances can be a valuable tool for manufacturers to drive sales, promote their brand, and build strong partnerships with retailers and distributors.
For more information on off-invoice allowances, you can visit Wikipedia.