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Contract Advisory
Office of Operations
Bureau of Contracts

Advisory Number: 24
Advisory Name: Early Pay Discounts for Procurement Contract Purchases
Date Issued: 06/07/2018 Date Last Updated: 06/07/2018
Subject:
Early Pay Discounts for Procurement Contract Purchases

Guidance:
As referenced in the Guide to Financial Operations (GFO), Chapter XI, Section 11.H - Early Pay Discounts for Procurement Contract Purchases, the Office of the State Comptroller (OSC) Bureau of Contracts (BOC), encourages State agencies to request Early Pay Discounts from contract vendors when feasible.

Early Pay Discounts have the ability to save the State money and can benefit the vendor community by improving cash flow. GFO Chapter XI, Section 11.H - Early Pay Discounts for Procurement Contract Purchases, provides sample language to include in contracts to encourage Early Pay Discounts throughout a contract term.

BOC also reminds State agencies to promote the benefits of Automated Clearing House (ACH) payments when negotiating discounts and contract terms with vendors. GFO Chapter XII, Section 8.G - Payment Alternatives provides additional details on ACH payments.

References:
Guide to Financial Operations

  • XI.11.H -Early Pay Discounts for Procurement Contract Purchases
  • XII.4.F -Proper Invoice
  • XII.5.F.4 - Selecting the Appropriate Payment Terms
  • XII.8.G -Payment Alternatives
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