From 1 January 2027, Resource Management Guide 417 – Supplier Pay On-Time or Pay Interest Policy (RMG 417) will be updated to reflect the Government’s updated policy on payment timeframes for invoices issued under procurement contracts that are subject to the Commonwealth Procurement Rules (refer Procurement Policy Note on Updated Commonwealth Supplier Payment Terms).
A preview of the updated RMG 417 can be viewed prior to its commencement date:
Resource Management Guide 417 - Application of the Supplier Pay On- Time or Pay Interest Policy
Further, guidance for the Payment Card policy is currently included in RMG 417. From 1 January 2027, Resource Management Guide 416 - Application of the Payment Card policy for payments value below $10,000 (RMG 416) will be resurrected and come into effect, outlining the Government’s policy to preference the use of credit or debit card. Refer to RMG 416 for further information.
Please note that the updated RMG 417 and RMG 416 do not come into effect until 1 January 2027. Until then, the current RMG 417 and its payment terms remain in effect.
RMGs are guidance documents. The purpose of an RMG is to support PGPA Act entities and companies in meeting the requirements of the PGPA framework. As guides, RMGs explain the legislation and policy requirements in plain English. RMGs support accountable authorities and officials to apply the intent of the framework. It is an official’s responsibility to ensure that Finance guidance is monitored regularly for updates, including changes in policy/requirements.
The policy came into effect 1 January 2020, introducing 5 day payment terms where Pan‑European Public Procurement On-Line (Peppol) compliant eInvoicing capability exists.
Audience
This guide is relevant to all non-corporate Commonwealth entities (NCEs). It is particularly relevant to Chief Financial Officers (CFOs) and their staff, and officials who are responsible for the NCEs internal controls and processes.
Corporate Commonwealth entities (CCEs) are encouraged to apply this policy.
Key points
This guide:
- outlines the Government’s policy on payment timeframes for invoices arising from procurement contracts that are subject to the Commonwealth Procurement Rules
- outlines the Government's policy on the use of payment cards for purchases of goods and services with a total contract value below $10,000
- uses terms as defined in the Commonwealth Procurement Rules
- uses GST inclusive values.
Objective
This policy facilitates timely payment to suppliers, assists with their cash flow, and reduces the cost of supplying to the Commonwealth.
As a general principle, NCEs are encouraged to implement efficient and timely receipting and payment practices to ensure that supplier payments are made as quickly as possible.
Resources
Related resources, including the Commonwealth Procurement Rules, and links to the following Tools and templates are located in the right hand menu.
- RMG-417 FAQs
- Additional Information on eInvoicing
- General Interest Charge (GIC) Rates
- Online Interest Calculator
