Prompt Payment Discounts
About Prompt Payment Discounts
In FY2020, the Prompt Payment Discount Program saved the Commonwealth $11.75 million.
That figure was credited back to the Departments’ accounts, enabling them to increase their spending power.
Departments should approach any vendors not participating in the program, and ask them to enroll.
Commonwealth agencies participating in the Prompt Payment Discount program saved $11.75 million in FY2020. That entire figure was credited back to the departments’ accounts, enabling them to increase their spending power.
Prompt Payment Discounts reflected more 1.53% of all Commonwealth spending in FY2020.
Additionally, departments lost the opportunity to save an additional $4.2 million due to delayed payment (invoice) processing by departments.
The Office of the Comptroller (CTR) continues to work to increase agencies’ participation in the Prompt Payment Discount program.
Why Prompt Payment Discounts?
Prompt Payment Discounts save departments money, and pay vendors quickly.
Departments should approach any vendors not participating in the Prompt Payment Discounts program and ask them to enroll.
Even if a department has not included the Prompt Payment Discount Form as part of the Request for Response (RFR) process or for contracts when a procurement is not required, the department is strongly encouraged to have a contractor complete a Prompt Payment Discount Form during the contract execution, renewal, or amendment process.
If your department is negotiating a new contract, take advantage of the MMARS feature that automatically calculates Prompt Payment discounts. This valuable cost-saving enhancement stores the vendor’s discount terms on the encumbrance document, which will copy forward to the payment document, automating the calculation and payment process. This feature provides departments with the means to monitor their bill-paying practices and take full advantage of discount opportunities.
MMARS also gives Departments the ability to enter discount-pricing terms (percentages) that will automatically calculate discounted payment programs.