Prompt Payment and a Proper Invoice

The Prompt Payment Act, which was enacted in the mid-'80s, requires the government to pay a small business within 30 days after receipt of the invoice, if the business completes its end of the contract. However, as you might expect, there is an important catch. The clock on this Act starts only if your invoice, as received, is deemed "proper" under the law.

If your invoice is not deemed "proper," it will get sent back to you within seven days after the billing office received it, with a statement of the reasons why it is not considered proper. You will then have to correct it, resubmit it to the government, and restart the 30-day wait. Therefore, "prompt payment" by the government is directly tied to the "properness" of your invoice.

To make sure that your invoice is correct and proper the first time around, include the following items:

• The name and address of your company.
• Invoice date. You are encouraged to date invoices as close as possible to the date of mailing or transmitting the invoice.
• Contract number or other authorization for supplies delivered or services performed. Be sure to also include the order number and contract line item number.
• Description, quantity, unit of measure, unit price and extended price of supplies delivered or services performed.
• Shipping and payment terms, such as shipment number and date of shipment, prompt payment discount terms, etc. Bill of lading number and weight of shipment will be shown for shipments on government bills of lading.
• The name and address of the person at your company to whom payment is to be sent. This must be the same person specified in the contract or in a proper notice of assignment.
• Name, title, phone number and mailing address of the person to be notified in the event of a defective invoice.
• Any other information or documentation required by the contract, such as evidence of shipment.
• While not required, you are strongly encouraged to assign an identification number to each invoice.

In addition, your invoice may be deemed not proper, for purposes of prompt payment, if the information you furnished in the CCR (Central Contractor Registration) database regarding EFT (electronic funds transfer) is incorrect or not current. (For details on CCR, see Get Registered.)