Government Payment Terms in South Africa: PFMA and Supplier Rights

The PFMA 30-Day Payment Rule

Section 38(1)(f) of the PFMA 1 of 1999 requires accounting officers of national and provincial departments to ensure that all money payable by the department is settled within the prescribed period. National Treasury Regulation 8.2.3 specifies that departments must pay all creditors within 30 days of receipt of a valid invoice — or by the agreed payment date if a different date has been mutually agreed in the contract. The 30-day clock starts from the date the department receives a valid tax invoice, not from the date work is completed or from the date of submission if the invoice is incorrect.

The Municipal Finance Management Act 56 of 2003 (MFMA) contains equivalent provisions for municipalities and municipal entities. Section 65(2)(e) of the MFMA requires accounting officers to take all reasonable steps to ensure that the municipality pays all money owed to creditors within 30 days, or such other period as may be agreed. Despite these provisions, National Treasury reports indicate that many departments and municipalities regularly exceed the 30-day payment period, particularly for small and emerging suppliers.

• PFMA Section 38(1)(f): departments must pay within 30 days of valid invoice
• MFMA Section 65(2)(e): municipalities must pay within 30 days
• 30-day clock starts from receipt of a valid, compliant invoice
• Incorrect invoices reset the clock — ensure all invoice elements are correct
• National Treasury monitors late payment through the CSD and BAS systems
• Late payment exposes accounting officers to personal liability under PFMA

How to Submit a Compliant Invoice to Trigger Payment

The 30-day clock only starts when the department receives a valid tax invoice. Many payment delays arise not from government cash flow problems but from suppliers submitting incomplete or non-compliant invoices that are returned or placed on hold. A valid tax invoice for government purposes must include: the supplier's VAT registration number (if registered), the supplier's CSD supplier number, a unique invoice number, the invoice date, a clear description of goods or services delivered, the quantity or measure, the contract/purchase order number, the delivery date or service completion date, the VAT-exclusive amount, the VAT amount, and the VAT-inclusive total. Many departments also require the department's payment reference number or WBS (Work Breakdown Structure) code.

Invoices must be delivered to the correct receiving address or system within the department. Many larger departments (National Treasury, DPWI, SAPS, DHA) have dedicated finance mail rooms or supplier invoice systems. Some use electronic invoicing through their ERP systems (SAP, Sage, or ORACLE). Always confirm the correct invoice submission channel with the contract manager before submitting your first invoice. Keep a delivery acknowledgement — email receipt, signed copy, or system submission reference — as proof of when the 30-day clock started.

• Include: VAT number, CSD supplier number, PO number, contract reference
• Clear description of goods/services, delivery date, quantities
• VAT-exclusive amount, VAT, and VAT-inclusive total all required
• Submit to the correct receiving address or electronic system
• Keep delivery acknowledgement as proof of submission date
• Confirm invoice submission channel with the contract manager in advance

Remedies for Late Payment by Government

If a government department fails to pay within 30 days, suppliers have several remedies. The first step is to contact the relevant contract manager and finance department directly with a written payment follow-up, attaching a copy of the invoice and proof of delivery. Escalate to the department's Chief Financial Officer (CFO) if the contract manager does not resolve the matter. National Treasury's Office of the Accountant-General maintains a supplier payment hotline and portal (accessed via the National Treasury website) where suppliers can log payment disputes.

For persistent non-payment, suppliers can approach the Public Protector if the failure constitutes maladministration, or the Standing Committee on Public Accounts (SCOPA) in Parliament if the department is a repeat offender. Suppliers can also institute legal proceedings, though this risks damaging the commercial relationship. The Prescription Act 68 of 1969 provides that government debts prescribe (become unenforceable) after three years, so legal action should not be delayed indefinitely. Some contracts include interest on late payment — check the specific contract conditions.

• Step 1: written follow-up to contract manager and finance department
• Step 2: escalate to the department's Chief Financial Officer
• Step 3: log complaint on National Treasury supplier payment portal
• Step 4: approach the Public Protector (maladministration)
• Prescription Act 68/1969: government debt prescribes after three years
• Interest on late payment: check specific contract conditions

Frequently Asked Questions

Related Guides

• Invoice Financing for Government Tenders
• Cash Flow Management for Tender Projects
• Working Capital Management
• How to Price a Government Tender