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Stephen F. Austin State University makes payments to vendors based on the Texas Prompt Payment Act, which requires state agencies and institutions of higher education to make payments to vendors for goods and services within 30 days of the later of:

  • The date the university receives the goods and/or services in accordance with the contract, and
  • The date the university receives a correct invoice for the goods or services.

Payments made after this date are subject to interest. Interest is calculated from the 31st day to the date payment is made. The interest must be paid at the same time the payment is paid. Interest is automatically computed based on the scheduled date of payment.

Payments must be scheduled to be paid as close to the 30-day limit as possible.  The university is not authorized to make early payments unless the vendor offers a discount for early payment or there is a written contractual agreement to pay the vendor sooner.

Vendors are instructed to send invoices to Procurement and Business Services. If an invoice is received by the department, it is important to date stamp the original invoice and send it immediately to Procurement and Business Services. The date that the invoice is received by the department is the date used to calculate the due date. If payment cannot be made within 30 days as required by law due to a delay caused by the department, the department is responsible for any interest payment due the vendor.

The interest rate paid on a late payment to a vendor under the state's prompt payment law is calculated on an annual basis. The interest calculation is one percentage point higher than the prime rate published in The Wall Street Journal on the first business day of July.

Disputes between the university and a vendor

If the department or Procurement and Business Services considers an invoice from a contractor to be incorrect, they must notify the contractor not later than the 21st day after the date the university receives the invoice.

If a dispute between the university and a contractor is resolved in the contractor's favor, the university is liable to the contractor for interest on all invoices for which the vendor has not received payment.  The interest must be calculated from the original due date of the payment, as if no dispute ever existed.

If a dispute between the university and a contractor is resolved in the university's favor, the vendor that submitted the original invoice must submit a corrected invoice to the university. The interest starts accruing on the 31st day after receipt of the corrected invoice.

If the late payment is due to departmental errors, such interest payment will be charged to the department that caused the late payment. If a department requests the Procurement and Business Services office to process a payment outside its normal operating procedures for any reason, the department shall be assessed a special processing fee of $50.

Exception

The university is not allowed to pay vendors before the payments are actually due unless the invoice is less than $5,000 or the university has a valid business reason for paying early, or there is a specific exception to this rule. Potential examples of when the university may make early payments to vendors are:

  • If the vendor or the university has an agreement to make a payment at a certain time;
  • If the vendor gives the agency a substantial discount for paying early;
  • Purchase of real property;
  • Payment for utilities;
  • Payment for lease cost, leased space, or rent;
  • Purchases of books or library materials paid with Higher Education Funds (HEF);
  • Subscription services up to a maximum of six weeks before the service begins;
  • Vendor payments for specialized goods or services if the vendor requires the payment to be made in advance.

For payment more than $5,000, payment must be scheduled for distribution on the date identified above, unless the department can justify the cost effectiveness of making a payment early. A vendor hardship does not qualify as a state business reason for paying early.

Exemptions

The requirements described in this section do not apply to a payment if:

  • the terms of a federal contract, grant, regulation or statute prevent the agency from making a timely payment with federal funds; or
  • the invoice is not mailed to the university in strict compliance with the instructions, if any, on the purchase order relating to the payment.

No interest accrues or may be paid on a payment if:

  • The payment is made from the institutional funds of an institution of higher education and
  • The total amount of interest that otherwise would have accrued is equal to or less than $5.

Payments of $5,000 or less are exempted from mandatory payment scheduling. The university, at its discretion, may choose to pay invoices $5,000 or less according to the scheduling requirements or may schedule the payment due date as soon as they are processed. For groups of invoices covered by a monthly statement, the statement amount must be $5,000 or less for the invoices to qualify for this exemption.

Waiver Not Allowed

A person may not waive any right or remedy described in this section if the right or remedy is granted by Chapter 2251.004, Government Code. A purported waiver of any right or remedy granted by that chapter is void.

For additional information refer to Policy 17.13 Prompt Payment to Vendors.

Additional questions can be directed to the Accounts Payable department.

 

Contact

Procurement and Business Services
936.468.2206
Fax: 936.468.4282
purchase@sfasu.edu
Staff directory

Office Hours:
Monday - Friday 8 a.m. to 5 p.m.

Physical Address:
2102 Alumni Drive, Austin Building, Room 131

Mailing Address:
P.O. Box 13030, SFA Station
Nacogdoches, Texas 75962