The law says that payments for goods and services are due 30 days after the goods are provided, the services completed, or a correct invoice is received, whichever is later. No discount for early payment is offered. The chairs are received on January 3, 2000. The state agency receives a correct invoice for all 50 chairs on January 10, 2000. The prompt payment law also says that interest is due to a vendor for goods and services payments that are late.
Interest starts accruing on goods and services payments on the first day that the payment is late.
The law sets the rate of interest at one percent per month. If interest was not paid and the vendor wishes to collect interest that is legally due under the prompt payment law, the vendor must submit a claim for that interest. The claim is submitted to the agency that paid the principal amount. The claim must be submitted not later than the sixth month after the date that the late payment is received. The vendor should be prepared to show the postmark date on the envelope for the warrant that was mailed, or banking information showing when the direct deposit transactions were received.