Agencies pay suppliers within 60 days of invoice review
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Agencies pay suppliers within 60 days of invoice review

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Agencies pay suppliers within 60 days of invoice review

Monday, April 18, 2022

Gladys Wanga, Speaker of the National Assembly for Finance and National Planning. FILE PHOTO | NMG

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By EDWIN MUTA
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Summary

  • The Finance Commission of the National Assembly has shortened the payment term in line with the two months prescribed in the Public Procurement and Asset Disposal Regulation, 2020.
  • The bill aims to tame the surge in current accounts that has left contractors and small businesses in cash flow problems, forcing some to close or cut staff numbers to keep afloat.
  • Lobbies such as Kenya Association Manufacturers have warned that rising bills by state and provincial entities are hurting businesses’ recovery from the economic impact of Covid-19.

Government agencies are required to pay suppliers of goods and services within two months of receipt of an invoice.

This follows changes to the Prompt Payments Bill that recommended payment within 90 days.

The Finance Commission of the National Assembly has shortened the payment term in line with the two months prescribed in the Public Procurement and Asset Disposal Regulation, 2020.

The bill aims to tame the surge in current accounts that has left contractors and small businesses in cash flow problems, forcing some to close or cut staff numbers to keep afloat.

“The committee has proposed to pay within 60 days. This will ensure that suppliers of goods and services to ministries, departments and agencies are paid on time, increasing the liquidity of such companies, leading to the growth of small and medium-sized enterprises and the creation of jobs,” the commission said in a statement. report on the audit of the account.

MDA’s outstanding accounts in December last year totaled Sh467.7 billion. Companies are also grappling with billions of shillings in unpaid bills by counties, despite Treasury guidelines to pay contractors.

Lobbies such as Kenya Association Manufacturers have warned that rising bills by state and provincial entities are hurting businesses’ recovery from the economic impact of Covid-19.

The Senate passed the bill in December, paving the way for the National Assembly to back it before it is passed into law. However, the proposed law exempted private companies.

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