Q: I was receiving a 2.5% early payment discount. I contacted my Sales Representative and explained regarding the 2,5% discount not being allowed for me and to amend my pricing structure.
1. I wanted to know if I should continue to make payment deducting that amount and then paying it over to the poor or some other institute that takes interest monies while my pricing structure is being amended?
2. What must I do regarding past years transactions?
3. Can the supplier give me a fixed price on the current invoice and discount the 2.5% that I would have received on my next invoice. Eg. Current invoice R100000. I pay in full within 30 days. Next invoice R50000 - R2500 (2,5% of previous).
To avoid early payment discount, I requested suppliers to give me a fixed pricing with the discount applied at the outset and I promised payment within 30 days. Most of the bigger companies have fixed operating procedures and will not adjust pricing structure to provide a fixed pricing. I make all payments diligently before 30 days as the reduced price allows us to price competitively. What would be the best way to proceed?
A: If you confirm with the supplier that you will be paying within the 30 days, it will be permissible.
And Allah Ta'ala (الله تعالى) knows best.
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