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Some firms may have lumpy cashflows and are unable to put up all of the cash at one time for a purchase or they simply just may not wish to part with current cash holdings.

Often if a firm is willing (able) to pay upfront in cash they will receive a discount such as being required to pay only 0.8x, for example. The key point is that the true cost of the goods is in fact 0.8x. while x is the financed cost.

Net 30,15 and so on is a form of financing the purchase to the purchasing company. The rate that one must pay to get the goods today and pay in thirty or fifteen days should be compared to other forms of financing. A firm should consult a bank for instance to determine if they can finance the purchase at a lower rate.