32.905
Payment documentation and process
Submitting a complete and accurate invoice with all required documentation is essential for timely government payment and to avoid processing delays or penalties.
Overview
FAR 32.905 outlines the required documentation and process for payment under government contracts. It specifies what constitutes a proper invoice, the supporting documentation needed for payment authorization, and the responsibilities of both contractors and government officials in the payment process. The regulation aims to ensure timely and accurate payments by establishing clear requirements for invoice content, submission, and processing.
Key Rules
- Proper Invoice Requirements
- Contractors must submit invoices containing specific information, such as contractor details, invoice date and number, contract and order numbers, item descriptions, quantities, prices, shipping/payment terms, and any other contractually required documentation. EFT and TIN information must be included if required by agency procedures.
- Interim Payments for Cost-Reimbursement Contracts
- Interim payment requests under cost-reimbursement contracts for services are considered proper invoices if they include all contract-required information.
- Invoice Review and Return
- If an invoice is deficient, the billing office must return it within specified timeframes (7, 5, or 3 days depending on the commodity) with reasons for rejection. Failure to do so may affect interest penalty calculations.
- Payment Authorization
- Payments (except certain interim payments) must be supported by a receiving report or other government documentation, which must include contract details, descriptions, quantities, delivery/performance dates, acceptance/approval dates, and the responsible official’s information.
- Invoice and Report Annotation
- Billing and payment offices must annotate invoices and receiving reports with the actual date of receipt.
Responsibilities
- Contracting Officers: Ensure contract clauses specify invoice and documentation requirements; oversee compliance.
- Contractors: Submit proper invoices with all required information; provide EFT and TIN details as needed.
- Agencies: Billing and payment offices must promptly annotate, review, and process invoices; return improper invoices within required timeframes; ensure payment is authorized by proper documentation.
Practical Implications
- This section ensures payments are processed efficiently and accurately, reducing disputes and delays. Contractors must pay close attention to invoice details and agency-specific requirements. Common pitfalls include missing information, late submission of supporting documents, and failure to comply with agency-specific EFT or TIN requirements.