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Under the Prompt Payment Act, federal agencies are required to pay for goods and services received within the payment terms specified in the contract or purchase order. Unless specified differently in the contract, payment must be made within 30 days. If payment is not made within the timeframe allowed, the contractor may be entitled to interest on the late payment. But when does the 30 days begin? Unfortunately for the contractor, the 30 days begins not when the goods or services are delivered, but when the designated agency office actually receives a complete invoice conforming to the terms of the contract. If you delay in submitting the invoice, or if it is lost or misdirected, the payment will likely be delayed. Be sure to note what information is required by the contract to be on the invoice. This will include information such as a purchase order or contract number, a description of the goods and services by line item, and, if applicable, a requisition number. It also includes Electronic Funds Transfer (EFT) information for your business. Federal agencies are required to make payments using EFT unless a special waiver is issued. Without this information, they will be unable to process your invoice, resulting in payment delays. Agencies are also required to take advantage when possible of discount terms if offered by the vendor and specified in the contract. For example, when negotiating your contract, you can offer payment terms as 2/15 Net 30. This means that full payment is due in 30 days, but the agency can take a 2 percent discount if payment is made within 15 days. Next: Getting Paid More Promptly Ð Accepting Commercial Payment Cards |
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