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Section 7: Non-Payroll Disbursements

Texas Prompt Payment Law

Effective Date:


Approved By:

Lenora Chapman, Associate Vice President, Financial Affairs

Last Revised On:


For Assistance Contact:

Assistant Vice President & University Controller (210)458-6774
Assistant Controller (210)458-6774
Disbursements & Travel Services (210)458-5915


This guideline provides information regarding compliance with the State of Texas Prompt Payment Law and Payment Scheduling Law and requirements for documenting and resolving disputed invoices.


  • Government Code Sec. 2251, Payment for Goods and Services

  • Texas Comptroller of Public Accounts: The Prompt Payment and Payment Scheduling Resources

  • UT System Administration Policy: UTS166 – Cash Management and Cash Handling Policy


Table of Contents

A. 30-Day Payment Requirement

The “prompt payment law” (Tex. Government Code, Chapter 2251) establishes when payments are due. This law stipulates a payment is due for goods or services 30 days from the date goods/services are completed, or a correct invoice is received, whichever is the later of the two.

Disbursements and Travel Services (DTS) picks up mail from the mailroom twice a day and dates stamps all invoices with the same date. This begins the clock for calculating the 30-day payment requirement.

It is very important that invoices be addressed to DTS and not to a department or other campus location. If a department receives a vendor’s invoice directly, the department must date stamp it when received. That will constitute the first date for calculating the 30-day payment requirement.

Prior to approving payment, DTS must receive appropriate supporting documentation.

Payments will be scheduled as close to the 30th day as possible per the payment scheduling law. Payments scheduled on weekends, UTSA and state holidays will be mailed (postmarked) or electronically paid within the 30-day payment requirement.

Payments are processed earlier than the standard 30-day processing time when:

  • An early payment discount is available per terms of the purchase order, or as stated on the invoice;

  • A contract requires pre-payment before goods or services are received;

  • Funded by sponsored programs (26-accounts);

  • Required to comply with accounting principles at fiscal year-end.

Any exceptions to the payment due date, other than those stated above must show benefit to the University and be pre-approved in writing by the Director of Disbursements and Travel Services, Assistant Controller or AVP/University Controller.

B. Interest Calculation

Interest is due to a vendor when the payment is past due according to the Prompt Payment Law, except when:

  • There is a bona fide dispute with the vendor;

  • The invoice was not mailed or sent to the address that appears on a UTSA purchase order Attn: Disbursements and Travel;

  • Special payment requirements relating to federal grants & contracts, or under other laws that allow for a longer period to pay;

  • The invoice is for payment with another Texas State agency.

Interest for an overdue payment will be calculated in accordance to the Prompt Payment and Payment Scheduling law per guidance provided at the State of Texas Comptroller’s website. The State Comptroller determines the interest rate to be charged; this rate is updated in the university’s financial accounting system and automatically computed when applicable.

A payment is considered overdue beginning the 31st day (from the date goods/services are completed, or a correct invoice is received, whichever is the later of the two.) The payment owed to the vendor begins to accrue interest on the date it becomes overdue. Interest will not accrue or be paid if the amount is less than or equal to $5. Interest stops accruing for overdue payments on the date the check is mailed or electronically transmitted.

Interest on any overdue payment (and due dates) will NOT be overridden unless properly authorized and documented in writing by the Director of Disbursements and Travel Services, Assistant Controller or Assistant VP/University Controller.

DTS will pay interest — up to the distribution date — on any past due payment, even if the vendor has an outstanding warrant hold.

C. Exemptions

The Prompt Payment Law exempts payments of $5,000 or less from mandatory payment scheduling. UTSA at its discretion may choose to pay invoices according to the Prompt Payment Law or may schedule the payment due date as soon as they are processed. Individual invoices grouped in a monthly statement cannot exceed $5,000 to qualify for the agency discretion exemption. Any exemptions made must show benefit to the UTSA.

D. Vendor Hold

Texas Identification Number Systems (TINS) is the system maintained by the State Comptroller’s Office and is utilized for vendor hold verification.

DTS is required to verify a vendor’s hold status through TINS for all payments made over $500. If a vendor has a hold, the Disbursement and Travel Services office will notify the vendor by mail that a vendor hold has been placed on their TIN by a state agency. The vendor must contact either the State Comptroller’s Office or the state agency placing the hold to resolve the situation and have the hold released. The vendor must notify UTSA when the hold has been released by the State Comptroller’s Office or state agency before any checks can be released.

E. Disputed Shipments or Invoices

If there is a dispute with the invoice or shipment, the vendor must be notified via e-mail or telephone within 21 days of the receipt of the invoice.

The disputing department and/or the Disbursements and Travel Services office are required to document all relevant information on a Vendor Dispute form. The form requires:

  • Nature/reason for the dispute/discrepancy;

  • Dates of the dispute/discrepancy;

  • Details regarding communication with the vendor regarding the dispute/discrepancy, including phone numbers and contact names;

  • Dispute/discrepancy resolution and in whose favor it was resolved.

    • A corrected invoice must be submitted by the vendor for all disputes resolved in favor of UTSA.

    • If the dispute is resolved in favor of the vendor, then the overdue payment is eligible for interest and it is calculated from the original due date.

NOTE: When the department is responsible for disputing the invoice or shipment, the completed forms must be sent to Disbursements and Travel Services with the related payment documentation.

F. Vendors Indebted to the State

A vendor is not entitled to interest for any time period that the vendor was indebted to the state. If during the payment processing it is determined that a vendor has a “hold” with the State of Texas the payment will be processed, however, the check will be held until the indebtedness is cleared. Vendor holds are placed by the State Comptroller’s Office or state agency for the following reasons:

  • Owes a debt to the state;

  • Is delinquent in payment of certain taxes collected by the state;

  • Is delinquent in repaying certain student loans;

  • Is delinquent in payment of certain types of child support.


Term Description

Date Stamp

The date stamped on an invoice when first received by either the UTSA department who received the goods or services or the Disbursements & Travel Services Office. 

The “date stamped” on an invoice indicates the  invoice receive date and is used to schedule the payment due date as close to the 30-day requirement; while accommodating the scheduled check runs and holidays, as stated in the payment scheduling act.

Interest Rate

The rate of interest used to calculate the interest amount due, is the rate in effect on September 1st of the fiscal year in which the payment becomes overdue.

As stated in the Comptrollers website : The interest calculation is one percentage point higher than the prime rate published in the Wall Street Journal on the first business day of July.


"Invoice" in the context of the prompt payment law should be taken to mean a vendor's request or demand for payment. A vendor might use the term 'statement' when requesting payment from an agency. In this case, the 'statement' should be considered the vendor's invoice. However, some vendors use documents called 'statements' to assist agencies in tracking payments or charges but no payment is being demanded or requested by the statement itself. In this case, the statement would not be considered an invoice because the statement is not actually requesting or demanding any particular payment. In general, whenever an agency receives a request or demand for payment, then the document should be considered an invoice for prompt payment purposes. Please reference TEX. GOV'T CODE Ann. sec. 2155.382(d).

Mailing of Payment

A payment is considered to be mailed on the date the payment is postmarked or electronically transmitted.  UTSA mails checks the day they are printed and therefore the date of the check serves as the date mailed.

Payment Due Date

The date 30 days after the later of:

  • The date goods or services are received, OR

  • The date the invoice is received

Prompt Payment Law

Texas “prompt payment law” (See Tex. Gov’t Code, Ch. 2251) requires agencies to pay interest to vendors and the interest be included with the payment when payment is not made by the 30th day after the latest of:

  • The date the agency receives the goods under the contract

  • The date the vendor completes performing its services for the agency or

  • The date the agency receives an invoice for the goods or services

Texas Identification Systems (TINS)

The system maintained by the State Comptroller’s Office and state agencies use to verify vendor holds.


Under the Prompt Payment Law:

  • Does not include another state agency-interest between state agencies is neither required nor authorized

  • Any person or business who provides goods or services to a state agency

  • When acting in a private capacity, and supplying goods and/or services to a state agency, this may include an officer or an employee of the agency





Date Description


Changed section number from 2.6.8 to 2.6.1.


Published guideline.

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