A front-end discount is a price reduction applied directly to the invoice at the point of sale. Unlike a back-end rebate, it takes effect immediately and requires no post-period reconciliation.
How front-end discounts are set
Typically as a fixed percentage, a customer-specific rate, or a promotional discount tied to a campaign window. The discount is reflected in the invoice unit price and does not require subsequent settlement.
Trade-offs against rebates
Front-end discounts simplify tracking but reduce the supplier's flexibility to modulate the effective price based on customer behavior. Rebates preserve that flexibility at the cost of reconciliation complexity.
