Prompt Payment Act

The Prompt Payment Act is a set of regulations governing the payment practices of federal agencies to ensure that invoices submitted by trading partners are paid on time by federal agencies.

If a trading partner submits a valid invoice, the agency must pay it on time. If an agency makes a late payment to the trading partner, it must pay interest to the trading partner. Prompt Payment rules determine the amount of interest penalties. Sometimes trading partners offer discounts for early payments. The Prompt Payment Act has rules that determine when a discount should be taken.

Prompt Payment Components

Federal agencies must follow the requirements set by the Prompt Payment Act. These requirements regulate the payment of commercial obligations. The prompt payment functionality includes these processes:

• Prompt payment due date calculation process
• Discount calculation process
• Interest calculation process