State vendors often have important tasks, such as providing services and goods to state agencies and employees. For instance, a state vendor might provide uniforms or tactical gear for law enforcement agencies. As a state vendor, you expect to receive timely payments for your goods and services. After all, you cannot expect to stay in business if you are not getting paid on time. However, there are sometimes hiccups with state funding that make it hard to ensure state vendors receive their payments. Fortunately, vendor payment programs can help.
What Is a Vendor Payment Program?
States may often provide a vendor payment program to make sure vendors who provide goods and services receive compensation within a reasonable amount of time. For instance, the state of Illinois offers a vendor payment program (VPP). The program exists to provide fast payments to vendors in need of fast, secure finances.
How Does the Program Work?
If your state has a VPP, you will need to fill out the proper application to see about qualifying to receive payments. The program provider will look at your invoices to determine if they are eligible for payment. Make sure you when you provide your goods and services that you check that you are working with a qualified purchaser. A qualified purchaser can provide you with invoices that may be deemed eligible for the VPP.
How Does the Process Work?
Keep in mind that vendor purchase programs will vary from state to state so the process will differ depending on your location. As an example, however, the Illinois VPP has requirements such as ensuring that your invoices are 90 days past due or more. Make sure you reach out to your specified state department to learn if a VPP is provided and what the requirements are to ensure you are eligible.
Applying for eligibility through a VPP is a relatively simple process. Many vendors can submit their information online. Make sure you have all your paperwork to avoid any delays as the agency processes your request. Once you are enrolled in the VPP, you can submit eligible invoices for prompt payment. Typically, the VPP tries to ensure fast payments to vendors, especially knowing they have been waiting on their funds for quite some time already.
Keep in mind that you may not receive the full value of your invoice. Again, the process and stipulations will vary depending on your state. However, VPP providers will typically pay out a percentage of the invoice. Once the providers receive payment from the purchaser, you will then receive the remaining amount of your invoice.
What Are the Benefits of a VPP?
Aside from getting paid the outstanding balance on your vendor invoices, you also receive several other benefits from a VPP. Once you enter the program with your company information, you are registered into a system. Many VPPs offer the benefit of simplifying signed agreements and eligible invoice creation that you can submit to your qualified purchasers.
Invoices let the purchaser know that you are enrolled in the VPP so they are aware they need to make payments to the program provider. You will be able to submit your invoices to the system, and the program provider will then pay a portion of the invoice to you. In other words, you receive the benefit of a simplified and mostly automated process that takes the hard work out of an already difficult situation.
If you would like to learn more about a vendor payment program in your state, contact a vendor payment program qualified purchaser. A VPP expert or state agency can help you determine if you are eligible to receive payments on your outstanding invoices.