How do I get paid on a government contract?

Governments are reliable payers but can be slow, especially the first time. Your contract sets the actual payment terms, so read them before you sign.

Typical terms

• Canada: federal departments generally aim to pay within 30 days of a correct invoice or acceptance.
• US: the Prompt Payment Act generally requires federal agencies to pay within 30 days, with interest for late payment.
• UK: public bodies are expected to pay undisputed invoices within 30 days, and the Procurement Act 2023 implies 30-day terms down the supply chain.
• EU: the Late Payment Directive sets 30 days as the general limit for public authorities.
• Australia: the Commonwealth has a policy of paying many small business invoices faster.

How to get paid faster

1. Complete the vendor forms, banking and tax details on day one.
2. Ask how invoices must be sent: format, portal, required fields and approver.
3. Agree milestones you can reach early, rather than one payment at go-live.
4. Get written acceptance of each milestone before invoicing.
5. Quote the purchase order and contract number on every invoice.
6. Follow up politely at 30 days.

Plan cash flow

Government contracts rarely pay upfront, though subscriptions and licences are sometimes paid annually in advance. Plan to cover 60 to 90 days of costs before the first payment arrives. See getting paid by government.