![]() ![]() The total value of these payments was over $55.8 trillion dollars. Social security and government benefits.Last year was the fifth consecutive one in which the Clearing House added more than 1 billion in payments. In 2019, the ACH moved 24.7 billion electronic payments, making the network one of the safest and most reliable payment systems in the world. It’s typically used for low-value payments between two participating financial institutions.ĪCH is also referred to as direct pay or an electronic check and is ever-growing in popularity. It’s a computer-based electronic network for processing transactions. ACH is short for the national automated clearing house association. The amount of the PPD for each invoice is shown in VendorWeb.When you wake up on payday and your money is automatically in your bank account, that’s due to an ACH transaction. Once the Statewide Contractor and the Executive Department agree on the amount of the PPD, the Statewide Contractor typically sends an invoice to the Executive Agency for the amount that was underpaid. If a Statewide Contractor knows that the PPD taken is not consistent with the date the invoice was sent to the Executive Department, the Statewide Contractor must contact the Executive Department (not OSD) to resolve the problem. Staff who are new to this task may enter the date they receive the invoice for processing, rather than the date it was received by the Executive Department. ![]() The clock starts only when a correct invoice is received.Īnother issue is due to the fact that the “date the invoice is received by the State Agency” is manually entered into MMARS by Executive Department staff, who can make errors. Also, if the invoice contains errors, it does not “start the clock” on the PPD. In fact, it is based on the date that the buyer receives the invoice or the date that the goods or services were received by the buyer, whichever is later. Some Statewide Contractors are under the impression that the PPD is based on their invoice date. Statewide Contractors sometimes are confused by the amounts taken as PPD, generally for one of two reasons. The Comptroller’s Office, which operates MMARS, monitors Executive Departments’ invoice payment practices and urges them to make payments in time to receive the largest available PPD. If no Prompt Payment Discount was offered by the Statewide Contractor, payment is made just in time for the Statewide Contractor to receive it within 45 days of receipt of a correct invoice. If MMARS received payment authorization 11 days after the State Agency received a correct invoice, MMARS wouldmake the payment just in time for the Statewide Contractor to receive it within 30 days of the date the invoice was received and take the 1% discount. In the example above (2% PPD for payments in 10 days, 1% PPD for payments in 30 days), if MMARS received authorization to make the payment within 10 days of the date a correct invoice was received by the Executive Department, MMARS would issue the payment just in time for the Statewide Contractor to receive it within 10 days of the date the invoice was received by the State Agency, and take the 2% discount. For Executive Departments (as opposed to municipalities), the PPD is taken automatically by the Commonwealth’s accounting system, MMARS, which looks at the date the invoice was received by the Executive Department and calculates when to make the payment so as to receive the most favorable discount while retaining the money as long as possible. These are terms that were offered in the Statewide Contractor’s Bid Response or subsequent negotiations. Most Statewide Contracts have Prompt Payment Discount (PPD) terms – for example, 2% discount if payments are made within 10 days of the date the Commonwealth Buyer received the invoice, 1% for payments made within 30 days of the date the Commonwealth Buyer received the invoice. ![]()
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