Payment of Invoices - 1901.5

(Revised: 02/2022)

Accurate Invoice 

Departments shall remind suppliers of the importance of submitting accurate and correct invoices to ensure timely payment for goods and/or services received.  Departments must not pay for anything that is not in the procurement document (pallets, shipping, travel costs, etc.)

Components of an Accurate Invoice

An accurate invoice provides the following:

• Purchase Order Number (FI$Cal PO or STD. 65) or Contract Number (STD. 213)
• Identifies in detail the goods and/or services acquired, quantities, unit price, extension, description, etc.
• Sales tax and/or use tax as a separate line item from goods and/or services as applicable.
• Identifies all goods and/or services provided, service period, unit price (i.e. hourly, monthly) and quantity applicable to the service
• Accurate billing address as stated on the purchase order or contract
• Supplier invoice number
• Supplier invoice date
• Company name and remittance address
• Payment terms offered

The Clock Starts Ticking

A properly submitted invoice is:

• Submitted to the department address as identified in the purchase document as “billed to” or “invoice submitted to” for payment.
• Provides all the necessary information as identified in the previous information block.
• Undisputed
• Before approving the final payment on a contract or purchase order that includes a commitment to use DVBE subcontractors, refer to SCM Vol 2, Section 1203.1 and follow the department policy and procedures regarding the receipt of the Prime Contractor’s Certification – DVBE Subcontracting Report (STD 817) and the associated withhold requirements.

To accurately measure and track payment timeliness, all invoices must be:

• Date stamped or receipt date designated in ink on the front of the invoice (to accommodate photocopying) when first received at the “billed to” departmental location as identified in the purchase document.
• Promptly forwarded to the department’s accounting office if the invoice is received elsewhere in the department and the purchase document states the “bill to” address is the accounting office.  It is recommended that the invoice be date stamped upon first arrival in the department, even if received at other than the “bill to” address on the purchase document.

Invoice Dispute Notification (STD. 209)

Departments having a conflict or dispute with a submitted invoice shall immediately notify the supplier by phone and follow up in writing via an Invoice Dispute Notification (STD. 209) within 15 working days.  Buyers and contract administrators must consult with their department’s accounting office or other unit as determined by department policy and procedures to develop a plan of action for settling the dispute in a timely manner.

Click here to access the Invoice Dispute Notification (STD. 209).

Discounts

Departments are encouraged to take advantage of prompt payment discounts on invoices when offered by suppliers. CCR, Title II, Section 1895.8 states discounts involving discount periods of less than 20 days shall not be included in the calculation of low bid.  Cash discounts can only be taken when the department is able to pay within the number of days specified by the supplier.

Example

5% in 20 days (This will be shown in the Comments field in FI$Cal and be reflected within the body of the FI$Cal purchase order or in the “Payment Terms” block on the Std. 65 ).

Cash discounts offered by bidders for prompt payment of invoices are not to be considered in evaluating bids and offers to determine the purchase order award.

Maintain a Clear Separation of Duties

Departments should have departmental policies and procedures in place to ensure a clear separation of duties.  Buyers should not be involved in receiving goods, approving invoices or making payments for goods or services that they procured.