FAR 32.905—Payment documentation and process.
Plain-English Summary
FAR 32.905 explains how a contractor gets paid and what documentation must be in place before payment can be made. It covers the basic rule that payment depends on a proper invoice and satisfactory contract performance, the required content of a proper invoice, special treatment for interim payment requests under cost-reimbursement service contracts, the time limits for rejecting defective invoices, the documentation that must authorize payment (such as a receiving report or other Government approval), the minimum information that must appear on that authorization, and the date-stamping duties of the billing office and payment office. In practice, this section is the bridge between performance and payment: it tells contractors what to put on invoices, tells Government personnel what to verify and record, and establishes the timing rules that affect when payment is due and whether interest penalties may apply. It also ties invoice validity to other FAR requirements, including TIN and EFT information, assignment of payments, and any contract-specific documentation requirements. For contractors, the main practical effect is that missing or incorrect invoice data can delay payment and trigger rejection. For contracting offices and payment offices, the section creates a controlled process for receipt, acceptance, documentation, and timely processing of invoices.
Key Rules
Payment requires proper invoice
The Government pays only when it has received a proper invoice and the contractor has provided satisfactory contract performance. This makes invoice quality and contract performance both necessary conditions for payment.
Invoice content is prescribed
A proper invoice must include specific information such as contractor identity, invoice date and number, contract number, description and pricing of the work, shipping and payment terms, payment destination, contact information for defective invoices, TIN when required, EFT information when required, and any other contract-required documentation.
Special rule for cost-reimbursement services
An interim payment request under a cost-reimbursement contract for services is treated as a proper invoice if it contains all information required by the contract. The contract controls the exact content in that situation.
Defective invoices must be returned quickly
If an invoice does not meet the proper invoice requirements, the designated billing office must return it within the specified time limits and explain the defect. If the office misses that deadline, the due date must be adjusted for interest-penalty purposes.
Payment needs Government authorization
Except for interim payments on cost-reimbursement service contracts, every invoice payment must be supported by a receiving report or other Government documentation authorizing payment, such as a certified voucher. Payment cannot proceed without this supporting record.
Receiving report has minimum data
The receiving report or other authorization must identify the contract, describe the supplies or services, state quantities received and accepted or services performed, show the date of delivery or performance, show the acceptance or approval date, and include the responsible Government official’s signature and contact information.
Acceptance and forwarding are time-bound
The agency receiving official should forward the receiving report or other payment-authorizing documentation to the payment office by the fifth working day after acceptance or approval, unless another arrangement exists. This forwarding period does not extend the invoice due date.
Billing and payment offices must date-stamp receipt
The billing office must immediately annotate each invoice with the actual date received, and the payment office must annotate each invoice and receiving report with the actual date received. These dates matter for payment timing and interest calculations.
Responsibilities
Contractor
Submit a proper invoice with all required information and any contract-specific supporting documentation. Ensure the invoice is accurate, includes correct EFT and TIN information when required, and identifies the correct payment address and invoice contact.
Designated Billing Office
Date-stamp each invoice immediately upon receipt, review it for proper invoice requirements, and return any defective invoice within the required time with a clear explanation of the deficiency.
Agency Receiving Official
Document acceptance or approval and forward the receiving report or other payment-authorizing documentation to the designated payment office by the fifth working day after acceptance or approval, unless another arrangement applies.
Designated Payment Office
Date-stamp each invoice and receiving report with the actual date received and process payment only when the invoice and supporting authorization are in place.
Government Acceptance/Approval Official
Accept supplies or services, or approve progress payment requests where applicable, and provide the required signature, date, and identifying information on the authorization document.
Contracting Officer / Agency
Ensure the contract and agency procedures specify any additional invoice requirements, EFT or TIN submission rules, and any alternate arrangements for receiving and payment processing.
Practical Implications
Contractors should treat invoice formatting as a compliance requirement, not a clerical detail; missing contract numbers, invoice dates, EFT data, or required attachments can stop payment.
The 7-day return rule for defective invoices is important because a late rejection can shift the payment due date and affect interest penalties, so agencies need disciplined intake procedures.
Acceptance and invoice review are separate steps, but both affect payment timing; delays in documenting acceptance can delay payment even when the contractor has performed correctly.
For cost-reimbursement service contracts, the contract language controls what makes an interim payment request proper, so contractors must follow the specific clause and agency instructions rather than relying on a generic invoice format.
Date-stamping by the billing and payment offices is critical evidence for prompt payment calculations, disputes over timeliness, and interest penalty determinations.
Official Regulatory Text
(a) General . Payment will be based on receipt of a proper invoice and satisfactory contract performance. (b) Content of invoices. (1) A proper invoice must include the following items (except for interim payments on cost reimbursement contracts for services): (i) Name and address of the contractor. (ii) Invoice date and invoice number. (Contractors should date invoices as close as possible to the date of mailing or transmission.) (iii) Contract number or other authorization for supplies delivered or services performed (including order number and line item number). (iv) Description, quantity, unit of measure, unit price, and extended price of supplies delivered or services performed. (v) Shipping and payment terms ( e.g., shipment number and date of shipment, discount for prompt payment terms). Bill of lading number and weight of shipment will be shown for shipments on Government bills of lading. (vi) Name and address of contractor official to whom payment is to be sent (must be the same as that in the contract or in a proper notice of assignment). (vii) Name (where practicable), title, phone number, and mailing address of person to notify in the event of a defective invoice. (viii) Taxpayer Identification Number (TIN). The contractor must include its TIN on the invoice only if required by agency procedures. (See 4.9 TIN requirements.) (ix) Electronic funds transfer (EFT) banking information. (A) The contractor must include EFT banking information on the invoice only if required by agency procedures. (B) If EFT banking information is not required to be on the invoice, in order for the invoice to be a proper invoice, the contractor must have submitted correct EFT banking information in accordance with the applicable solicitation provision ( e.g., 52.232-38 , Submission of Electronic Funds Transfer Information with Offer), contract clause ( e.g., 52.232-33 , Payment by Electronic Funds Transfer-System for Award Management, or 52.232-34 , Payment by Electronic Funds Transfer-Other Than System for Award Management), or applicable agency procedures. (C) EFT banking information is not required if the Government waived the requirement to pay by EFT. (x) Any other information or documentation required by the contract ( e.g., evidence of shipment). (2) An interim payment request under a cost-reimbursement contract for services constitutes a proper invoice for purposes of this subsection if it includes all of the information required by the contract. (3) If the invoice does not comply with these requirements, the designated billing office must return it within 7 days after receipt (3 days on contracts for meat, meat food products, or fish; 5 days on contracts for perishable agricultural commodities, dairy products, edible fats or oils, and food products prepared from edible fats or oils), with the reasons why it is not a proper invoice. If such notice is not timely, then the designated billing office must adjust the due date for the purpose of determining an interest penalty, if any. (c) Authorization to pay . All invoice payments, with the exception of interim payments on cost-reimbursement contracts for services, must be supported by a receiving report or other Government documentation authorizing payment ( e.g., Government certified voucher). The agency receiving official should forward the receiving report or other Government documentation to the designated payment office by the 5th working day after Government acceptance or approval, unless other arrangements have been made. This period of time does not extend the due dates prescribed in this section. Acceptance should be completed as expeditiously as possible. The receiving report or other Government documentation authorizing payment must, as a minimum, include the following: (1) Contract number or other authorization for supplies delivered or services performed. (2) Description of supplies delivered or services performed. (3) Quantities of supplies received and accepted or services performed, if applicable. (4) Date supplies delivered or services performed. (5) Date that the designated Government official- (i) Accepted the supplies or services; or (ii) Approved the progress payment request, if the request is being made under the clause at 52.232-5 , Payments Under Fixed-Price Construction Contracts, or the clause at 52.232-10 , Payments Under Fixed-Price Architect-Engineer Contracts. (6) Signature, printed name, title, mailing address, and telephone number of the designated Government official responsible for acceptance or approval functions. (d) Billing office . The designated billing office must immediately annotate each invoice with the actual date it receives the invoice. (e) Payment office . The designated payment office will annotate each invoice and receiving report with the actual date it receives the invoice.