New York state has announced a New Year's resolution sure to please government contractors. Policymakers will, in general, pay contractors and suppliers within 15 days of receiving an invoice, according to reports published late last week.
New legislation will require state agencies to cut their standard invoice payment terms in half. Reports said that suppliers are generally paid within 30 days by government buyers.
In a sponsor’s memo, Assemblyman Michael Blake stated that the new rules will apply to suppliers working on projects other than highway construction and that with six months to implement the rules, it will allow government agencies time to adjust.
He added that it would help smaller suppliers with limited working capital, according to reports. The legislation also allows businesses to obtain interest on late invoices, unless late payment is valid. The law defines justified late payments as due to non-delivery of goods or services and other reasons, though designates that non-payment and late payments should be addressed “as soon as possible.”
New York defines a small business as one independently owned and operated, with 300 employees or fewer, according to reports.