Prompt Payment Components

Federal agencies must follow the requirements set by the Prompt Payment Act. These requirements regulate the payment of commercial obligations.

Prompt payment features include these processes:

• Prompt Payment Due Date Calculation process

• Discount Calculation process

• Interest Calculation process

Prompt Payment Due Date Calculation Process

This process updates the due date and the discount date according to the Prompt Payment rules.

The due date on payment schedules is based on the invoice received date and the goods or services acceptance date. This process lets your agency take the later of the two dates as the due date. Here are some other factors that affect the due date determination:

• Invoice returns

• Constructive acceptance date

• Weekends and holidays

  Note:

  If the due date falls on a weekend or a federal holiday, the next working day is assigned as the due date.

Discount Calculation Process

This process determines whether a discount is economically beneficial by comparing the discount rate to the Treasury's Current Value of Funds rate. Beneficial discounts are automatically applied during the payment processing.

Interest Calculation Process

This process calculates the interest on late payments and also creates interest invoices if the Create Interest Invoice setting is enabled for the payment term. The interest calculation rules for prompt payment govern the interest rate.