Vendor Invoice Payment Terms
This policy has been developed to optimise the departmental working capital and provide clear and equitable terms of business for our suppliers.
Changes since previous version
2020 Jun 30 - update to contact details, text and style.
Document history
none
Superseded documents
none
- Policy statement
- The Department of Education applies standard vendor payment terms of 30 calendar days from receipt of a correctly rendered invoice.
- The department will accept payment terms of less than 30 calendar days in return for an equivalent business value to the department or under the terms of an agreement signed before 14 July 2011.
- Equivalent Business Value is defined as a product or settlement discount that reduces the invoice cost by an amount that exceeds the interest income derived from retaining the cash in accordance with the departmental payment terms.
- All vendor record creation will be established initially based on the standard vendor payment terms of 30 calendar days from the receipt of a correctly rendered invoice. Subsequent modification will occur based on an approved application to vary standard terms.
- The department will adopt NSW Treasury Circular 11/12 issued 14 July 2011 (PDF 78.41 KB).
- In accordance with TC11/12 payment terms longer than 30 calendar days from the invoice date are permitted only where the nature of the goods and services or the structure of the purchases make it impractical to require payment within 30 calendar days.
- In accordance with TC 11/12, for small businesses, as defined with TC 11/12, penalty interest may be payable where payment has not been made within the specified period.
- The department will provide vendors with an opportunity to identify themselves as 'small businesses'.
- Audience and applicability
- This policy applies to all departmental employees involved in the negotiation of agreements with suppliers and/or in the raising and payment of purchase orders.
- Small businesses are defined as Australia or New Zealand based firms that have an annual turnover of under $2 million in the latest financial year.
- NSW Treasury Circular 11/12 does not apply to public schools.
- This policy does not apply to the following vendor categories:
- Travel Support Officers engaged by the Assisted School Travel Unit
- garnishee orders
- payments to schools
- payments to employees and associated with employee entitlements including ATO
- petty cash accounts.
- Context
- This policy is in accordance with NSW Treasury Circular 11/12 which specifies the Government's payment of accounts policy.
- To give effect to this new policy, clause 13 of the Public Finance and Audit Regulation 2010 has been amended.
- Responsibilities and delegations
- The Secretary must nominate the holder of a position within the staff establishment of the authority to be the accounts complaints officer for the authority.
- Monitoring and review
- The department is required to provide quarterly reports on its payment performance to the Secretary and to the NSW Department of Finance and Services. Reports on payment performance will be published on the Department of Finance and Services' website. An agency reporting template format is provided for this purpose.
- The first quarterly report to be published on the DFS website will be for January to March 2012.
- Annual reporting requirements are specified in the Annual Reports (Departments) Regulation 2010 and the Annual Reports (Statutory Bodies) Regulation 2010. These requirements are discussed in NSWTC 06/26 Annual Reports Legislation Reporting on Payment of Accounts (or any superseding Circular).
- The annual reporting disclosure requirements will be unchanged for 2010-11 annual reports. However, the Circular will be updated for the new payment of accounts policy for 2011-12 annual reports.
- The Finance Shared Services directorate monitors the implementation of this policy, regularly reviews its contents to ensure relevance and accuracy, and updates it as needed.
- Contact
Director, Finance, Shared Services
02 8633 1699