Rule 36:
Prompt payment times

The payment requirements apply from the day an invoice is entered into an accounts payable system. This may differ from the date specified on the invoice.

The invoice payment time requirements set out in Rule 36 will not apply if:

• the goods, services or works are unsatisfactory or incomplete
• the invoiced amount is in dispute 
• an invoice is incomplete or incorrectly rendered.

The requirement only applies to invoices related to domestic trade credit that are received or sent by an agency in the ordinary course of its business.

Requests for payment that are out of scope include:

• reimbursement of employee expenses
• rents and leases
• credit card statements, finance payments, and insurance premiums
• payments made regularly as part of an ongoing contract, which don’t require an invoice, such as progress payments on a roading contract.

Requests for payment in these contexts are not considered invoices for the purposes of the Procurement Rule. Including them would skew payment time reporting and add unnecessary complexity.

Domestic means that the requested payment is in $NZD, for goods or services supplied within New Zealand, by an entity that does business in New Zealand.

Electronic invoicing (eInvoicing) is the direct exchange of digital invoice information between a supplier’s and a buyer’s software or systems using the secure Peppol (Pan-European Public Procurement Online) network and common standard. The New Zealand and Australian governments have committed to a joint approach to eInvoicing using Peppol, a global standardised framework that enables businesses exchange procurement documents electronically.

Invoice is a document or electronic message that signals a requirement to pay for goods or services that the business issuing the invoice has provided the agency. Invoices need to contain the correct and required information and be sent to the right address.

Ordinary course of business means that, for the agency making payment, the invoice is usual or otherwise unremarkable (that is, invoices of that type would be processed regularly, using the standard accounts payable process). This excludes invoices that are so significant that extraordinary checks and approvals are required (for example, payments for significant infrastructure).

Trade credit is where there is agreement for a delay between supply of goods or services and payment for those goods or services. In other words, the good or service needs to have already been provided (to the required standard and quantity).

Agencies are required to report on domestic eInvoice and domestic trade invoice payment times to MBIE quarterly. MBIE can require agencies to report monthly if they are not meeting payment time targets. 

MBIE will provide key finance contacts in agencies with further information about the reporting requirements. 

MBIE publishes invoice payment times.

Government agencies’ invoice payment times – eInvoicing