Accelerating Payments to Small Business for Goods and Services

On September 14, 2011, the Office of Management and Budget (OMB) issued Memorandum 11-31, "Accelerating Payments to Small Business for Goods and Services.”  That memorandum established, “the Executive Branch policy that, to the full extent permitted by law, agencies shall make their payments to small business contractors as soon as practicable, with the goal of making payments within 15 days” or receipt of relevant documents.  That said, this memorandum does not affect the application of the Prompt Pay Act’s late-payment interest penalty provisions.

Fortunately, there is a method to systematically satisfy this memorandum in EBS today. 

For example:

Invoice Received Date:  01-MAY

Goods Accepted Date:  01-MAY
Invoice Due to be paid Date (per OMB memo you mention):  16-MAY
Date Interest should start accruing:  31-MAY

One method agencies can satisfy the guidance of the memorandum would be to record or carry forward from the PO the applicable Pay Terms.
  In the example, they would be 'Net 30'.  By using the standard payment terms this allows the agency to start accruing interest on 31-MAY, if necessary.  In addition, when the agency runs its 16-MAY pay, they should set the 'pay through' value to 31-MAY for small business payments.  This will select all invoices which are due within the 15 day window.  Users can also get more complex through the use of pay groups.

I hope this helps.

If you have any topics you would like to see addressed in the blog, please leave them in the comments section.

Thank you for reading.

Comments:

Hey Jeff,

Thanks for posting. FYI, if any other customers would be interested on jumping on an enhancement request to help out further in this area, suggest that customers jump on ER 13068786, which requested payment functionality that would allow payment terms to include separate payment due dates from the date at which interest would begin accruing. If the Federal community could utilize such a functionality, then we wouldn't have to run separate payment batches for large vs small businesses to comply with the OMB 11-31 or manually reschedule all the payment dates for small business supplier payments.

Posted by Larry Baugh on August 01, 2012 at 11:42 AM EDT #

Jeff,

We will soon have a requirement to interface with the upcoming US Treasury Payment Information Repository (PIR) system (http://fms.treas.gov/pir/index.html). It seems that PIR will serve as a "bridge" for Non-Treasury Disbursing entities to get their detail payment information into GWA. I haven't seen any slides or anything from Federal Development on any intent to build a standard interface for PIR, but just thought I'd reach-out and see if you knew of/could share if there are any plans for a seeded PIR interface to be released in the future.

Thanks!

Larry

Posted by Larry Baugh on August 01, 2012 at 12:03 PM EDT #

Larry: Thank you for reading and thank you for pointing out the enhancement request (ER). I know that our Federal Development team reads all customer enhancement request and considers them very carefully.

Jeff

Posted by Jeff Waterman on August 01, 2012 at 01:14 PM EDT #

With respect to the US Treasury Payment Information Repository (PIR) system, it is my understanding that the PIR file format was published in July 2012. I understand Oracle Development is reviewing the design with accordance and cooperation of the US Treasury and will release more information as it becomes available.

Posted by Jeff Waterman on August 07, 2012 at 03:02 PM EDT #

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About

The author, Jeff Waterman, has been with Oracle since 1996 in various roles, but always working to apply Oracle Application solutions assist the US Federal Government with fulfilling its mission to its citizens. Presently, he serves as a Master Principal Applications Sales Engineer within North America Public Sector.

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