This means that the due date is calculated as of the date that goods are received, rather than the invoice date. This means that payment must be received before the business receiving the order will even fill the order. No credit going to be given in such an instance. It will, however, start and finish the product before then. This is a little complicated.
Buyer provides the seller with a sight draft drawn on the buyer.
Seller then sends a negotiable bill of lading, invoice, and the sight draft to the buyer's bank, which pays on the sight draft. The bank then holds the draft as a note until the buyer makes good. E.O.M. shifts the date used to calculate the discount and due dates from the invoice date to the end of the month in which the goods were received. The truth is that they do not. The initial discount price is the sales price as far as the seller is concerned.