The incentive given to a buyer to encourage prompt payment is

A discount given to a buyer to encourage prompt payment is known as a "cash discount". This is a reduction in the price of the goods or services being sold, which is offered to the buyer if they pay their bill within a specified period of time. For example, a seller might offer a 2% discount on the total invoice amount if the buyer pays within 10 days of receiving the invoice. The purpose of the cash discount is to incentivize buyers to pay their bills quickly, which helps the seller to improve their cash flow and reduce the risk of bad debts.