Changes to the provisions of State Finance Law 179-f effective April 1, 2017 require the payment of prompt payment interest to certain small businesses on invoices not paid within 15 days. This interest is payable provided the small business submits its invoice electronically, in conformance with the policies and procedures of the accounting and financial management system of state government and identifies that it is seeking expedited payment as a small business.
This section details the policies and procedures which must be complied with to entitle the invoice to 15 day prompt payment interest:
Prior to submittal of the invoice, a representative of the small business must certify the business meets the definition of “small business” applicable to section 179-f. This certification must be completed by means of an account established within the Statewide Financial System (SFS) electronic vendor portal. Completion of this certification will identify that the business is seeking expedited payment as a small business on all electronically submitted invoices from that date forward until such certification is removed by the vendor through this same portal. The Office of the State Comptroller reserves the right to act as the representative of the small business where situations warrant such action. No other method of identification of intent to seek expedited payment will meet the provisions of SFL 179-f.
In order to facilitate an expeditious payment process, small businesses must receive payment electronically. Receiving electronic payments supports the automation of the eCommerce process. Agencies should refer small businesses to the 15-Day Prompt Payments for Small Businesses section of the Office of the State Comptroller’s website (https://www.osc.state.ny.us/state-vendors/portal/15-day-prompt-payments-small-businesses) for more information on interest eligibility requirements, including enrolling in electronic payment.
New York State reserves the right to question the certification of a business as meeting the definition of small business. Businesses must support such certification through processes identified for the purpose. Any business determined to not meet the definition on the date of invoice must return to the paying agency any interest paid on such invoices.
Electronic submittal of invoices by the small business must be completed by one of the following electronic systems designed for such purpose and must be in conformance with the standards for an invoice by that electronic system.
| System Name | System Methodology | Effective Date |
|---|---|---|
| SFS | Direct file transfer of invoices to SFS by the vendor through a designated file transfer protocol upon permission to use such protocol by SFS | 4/1/2017 |
| SFS eSettlements Portal | Vendor entry of invoices into the SFS eSettlements portal created for such purpose | 4/1/2017 |
| NYS Market Place | Vendor entry of invoices into the NYS Market Place in support of purchase orders received through the NYS Market Place | 4/1/2017 |
Submittal of invoices or invoice information through any system or method not listed above – regardless of the extent of electronic technologies involved in the system or method – do not meet the provisions of SFL 179-f for entitlement to 15 day prompt payment interest. Submitting an invoice by email, fax, text, SMS or any other method that necessitates manual reentry of invoice information into a financial management system is not considered electronic invoice submittal under the provisions of SFL 179-f.
The Office of the State Comptroller will periodically update the acceptable electronic systems designations and will publish an effective date for that system’s designation as an acceptable electronic submittal system. Any agency seeking to have an agency system interface deemed an acceptable electronic system for the purposes of the provisions of SFL 179-f should contact the Bureau of State Expenditures at [email protected] for evaluation. The request must include the following information:
- Type, annual volume and dollar amount of payments
- an explanation of how the vendor submits an invoice into the agency’s system
- name, email address, and phone number of an agency contact person
- any other relevant information
OSC will notify the contact person identified by the agency of the decision.
Guide to Financial Operations
REV. 07/23/2018