Prompt Payment Act
Government Code Ch. 2251
The State of Texas Prompt Payment Act, Texas Government Code Chapter 2251, requires that for any contract executed after August 31, 1987, a state agency's payment is due by the 30th calendar day after the latest of the following:
- The day the agency received the goods;
- The day the services were completed by the vendor for the agency; or
- The day the agency received the invoice for the goods or services.
What does this mean?
- Interest due on late payments to vendors will be automatically calculated and included with the payment.
- Payments for goods and services must be paid no later than 30 days after the latter of receipt of goods/services or receipt of a completed invoice.
How can departments help reduce our prompt pay interest payments?
- Departments must establish procedures to document when invoices are received directly from the vendor. An automated date stamp on the invoice is the preferred method.
- Departments must establish procedures to notify Materials Management immediately when goods were received directly from the vendor.
- Departments must approve invoices and document services dates appropriately and timely.