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Prompt Payment Act

Texas Government Code - Chapter 2251

The State of Texas Prompt Payment Act, Texas Government Code, Chapter 2251, stipulates 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?

  • Late payments will automatically have interest calculated and included with the payment.
  • Payments for goods and services must be paid no later than 30 days after the latter of the 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 service dates accurately and timely.