A supply company may encourage timely payment by offering what type of discount?

The correct answer is a cash discount, which is a reduction in the amount due when payment is made promptly. This type of incentive encourages clients to pay their bills quickly, improving the company's cash flow and reducing the risk of late payments.

In contrast, a bulk discount is offered for purchasing large quantities of goods and rewards customers for buying in volume rather than for making timely payments. A seasonal discount is typically used to encourage purchases during a specific time of the year, focusing on inventory turnover instead of payment timing. A trade discount is a reduction given to businesses to encourage them to sell a product and is more related to the nature of the business relationship rather than the timing of payment.

By offering cash discounts, the supply company fosters better financial management for both itself and its customers, making timely payment more advantageous for all parties involved.