Prompt Payments

The Prompt Payment Act requires State agencies who acquire goods and services, or conduct business through contractual agreements with nongovernmental and privately-owned businesses, to pay by the "required" payment due date for delivered goods and services.

  • A State Agency is any authority, board, department, institution, or any other unit of State government.
  • The required payment due date is established by the terms of the contract; or if a contract is not in existence, thirty calendar days after the receipt of a proper invoice, or thirty days after the receipt of goods or services, whichever is later.

Additionally, the Prompt Payment Act provides for the following:

  • Promotes timely vendor payments;
  • Improves vendor relationships;
  • Promotes competition;
  • Reduces the cost of goods and services provided to the Commonwealth;
  • Facilitates sound cash management; and,
  • Increases the investment potential for the Department of the Treasury (DOT).


The Code of Virginia provides that interest shall accrue on all amounts owed by a State agency to non-governmental or privately-owned businesses which remain unpaid for seven days following the required payment due date.

Commonly Encountered Problems Contributing to Departmental Late Payments

Problems Impact Resolution
Vendor's invoice not annotated with receipt date Using the vendor's invoice date shortens the 30 day prompt payment period Departments must annotate vendor invoices with receipt
Invoices held for dispute not documented Without any indication of the problems, AP must use the vendor's invoice date or departmental receipt date Departments must document invoice and/or receiving problems and clearly indicate the date of resolution
Vouchers received with multiple invoices Delays AP processing, increases likelihood of keying errors Departments must include only one invoice per voucher
No approving signature on voucher AP must return invoice to department, creating processing delays All vouchers must be signed before sending to AP
Vouchers received without correct PO# AP must research prior to processing, creating processing delays Validate PO# prior to forwarding to AP
Vouchers received without correct documentation Vouchers must be sent back to dept. Ensure proper backup is attached
Endowment invoices being sent to A/P with wrong coversheet Delays process Ensure Endowment voucher is correctly processed
Vouchers received in AP without the vendor's ID numbers AP must research prior to processing creating processing delays Provide the vendor's correct ID number on all vouchers
Vouchers received in AP with insufficient processing lead time Vouchers will be late Vouchers should be submitted to AP within one week of their receipt