Payment Scheduling
Overview of Requirements

Agencies are not allowed to pay vendors before the payments are actually due unless the invoice is $5,000 or less or the state has a business reason for paying early.

For example, agencies are allowed to make early payments to vendors:

• If the vendor and the agency already have an agreement to make a payment at a certain time, or
• If the vendor gives the agency a substantial discount for paying early.

Definitions

Payment

Money owed to a vendor.

State agency

• A board, commission, department, office or other agency in the executive branch of state government created by the constitution or a statute of this state, including an institution of higher education as defined by Texas Education Code Section 61.003.
• The Supreme Court, the Court of Criminal Appeals, a court of appeals, a state judicial agency or the State Bar of Texas.

Vendor

A person who supplies goods or a service to a state agency or another person directed by the agency. The term does not include a state agency, except for Texas Correctional Industries. The term includes an officer or employee of a state agency when acting in a private capacity to supply goods or a service.

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