Commonwealth Bill Paying Policy
The Commonwealth's Bill Paying Policy is established by the Office of the Comptroller. This document outlines the Commonwealth's Bill Paying Policy and general payment policies that apply to the expenditure of Commonwealth Funds by Executive Departments. Statewide Contractors who are not paid within 45 days of the later of the Executive Department’s receipt of a correct invoice or the Executive Department’s receipt of the goods or services, are entitled to charge a late payment penalty as described in this document.
VendorWeb is the online application through which Statewide Contractors may view their payment transactions with the Commonwealth of Massachusetts. VendorWeb provides information on scheduled payments and payment history. To use VendorWeb, you must know your Vendor Code and the last 4 digits of your Taxpayer Identification Number (TIN). Your vendor code may be found on your signed copy of the Standard Contract form. If you are unable to locate your Vendor Code, contact your OSD Strategic Sourcing Lead (SSL). VendorWeb shows Prompt Payment Discounts as well as any intercepted payments.
VendorWeb only shows payments by Executive Departments and other agencies who use MMARS, the Commonwealth’s accounting system. Municipalities do not use MMARS.
Payments to vendors may be “intercepted” via MMARS for various reasons, for example, if the Statewide Contractor has not fully paid Commonwealth taxes. If this happens, the amount of the intercept is noted in VendorWeb.
Prompt Payment Discounts
Most Statewide Contracts have Prompt Payment Discount (PPD) terms – for example, 2% discount if payments are made within 10 days of the date the Commonwealth Buyer received the invoice, 1% for payments made within 30 days of the date the Commonwealth Buyer received the invoice. These are terms that were offered in the Statewide Contractor’s Bid Response or subsequent negotiations. For Executive Departments (as opposed to municipalities), the PPD is taken automatically by the Commonwealth’s accounting system, MMARS, which looks at the date the invoice was received by the Executive Department and calculates when to make the payment so as to receive the most favorable discount while retaining the money as long as possible.
In the example above (2% PPD for payments in 10 days, 1% PPD for payments in 30 days), if MMARS received authorization to make the payment within 10 days of the date a correct invoice was received by the Executive Department, MMARS would issue the payment just in time for the Statewide Contractor to receive it within 10 days of the date the invoice was received by the State Agency, and take the 2% discount. If MMARS received payment authorization 11 days after the State Agency received a correct invoice, MMARS wouldmake the payment just in time for the Statewide Contractor to receive it within 30 days of the date the invoice was received and take the 1% discount.
If no Prompt Payment Discount was offered by the Statewide Contractor, payment is made just in time for the Statewide Contractor to receive it within 45 days of receipt of a correct invoice.
The Comptroller’s Office, which operates MMARS, monitors Executive Departments’ invoice payment practices and urges them to make payments in time to receive the largest available PPD.
Statewide Contractors sometimes are confused by the amounts taken as PPD, generally for one of two reasons. Some Statewide Contractors are under the impression that the PPD is based on their invoice date. In fact, it is based on the date that the buyer receives the invoice or the date that the goods or services were received by the buyer, whichever is later. Also, if the invoice contains errors, it does not “start the clock” on the PPD. The clock starts only when a correct invoice is received.
Another issue is due to the fact that the “date the invoice is received by the State Agency” is manually entered into MMARS by Executive Department staff, who can make errors. Staff who are new to this task may enter the date they receive the invoice for processing, rather than the date it was received by the Executive Department. If a Statewide Contractor knows that the PPD taken is not consistent with the date the invoice was sent to the Executive Department, the Statewide Contractor must contact the Executive Department (not OSD) to resolve the problem. Once the Statewide Contractor and the Executive Department agree on the amount of the PPD, the Statewide Contractor typically sends an invoice to the Executive Agency for the amount that was underpaid.
The amount of the PPD for each invoice is shown in VendorWeb.