Definition

A price reduction that makes accountants slightly nervous because it means less margin, but customers absolutely love it.

Example Usage

We're offering a 20% discount on bulk orders to incentivize larger purchases.

Source: Common business terminology

Related Terms

Advanced

securitize

The financial alchemy of bundling loans or receivables together and selling them as securities to investors, because apparently individual mortgages aren't exciting enough. It's how banks turn illiquid assets into tradeable products, which worked brilliantly until 2008 when everyone realized some of those bundles were basically garbage wrapped in AAA ratings. Still practiced today, but with slightly more supervision.

💰 Finance / Accounting
Beginner

Bear Market

A prolonged period when stock prices fall and investors pretend they saw it coming all along. Named after bears because, like encountering an actual bear, the best strategy is to play dead and hope it goes away before it eats your retirement fund.

💰 Finance / Accounting
Intermediate

recourse debt

A loan where the lender can come after your other assets if the collateral isn't enough to cover the debt—the financial equivalent of co-signing for your irresponsible cousin. Sleep tight!

💰 Finance / Accounting
Intermediate

convertible

In finance, a security that's having an identity crisis—it starts as one thing (usually a bond) but can transform into something else (usually stock) like a financial Transformer. Investors love them because they get the safety of debt with the upside potential of equity. It's also a car with a roof that comes off, but that's significantly less exciting to accountants.

💰 Finance / Accounting
Beginner

debtor

A person or entity that owes money, making them the star of collection agencies' dreams and creditors' spreadsheets. In bankruptcy proceedings, they're the main character in a financial tragedy. Distinguished from a borrower by the implication that payment is overdue or the relationship has gone south.

💰 Finance / Accounting
Intermediate

Amortization

The process of spreading the cost of something over time so it hurts a little bit every month instead of a lot all at once. It's the financial equivalent of eating an elephant one bite at a time, except the elephant is debt and you're never not eating.

💰 Finance / Accounting

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Intermediate

discrepancies

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