Certified Texas Contract Manager Practice Exam

When is a payment considered overdue according to contract management guidelines?

1. After 30 days from the invoice date

2. Upon receipt of goods or services

3. After confirmation of payment

4. When an invoice is not submitted in time

The correct answer is: After 30 days from the invoice date

A payment is considered overdue after 30 days from the invoice date according to contract management guidelines. This standard allows enough time for the invoicing process to be completed and for accounts payable to process the payment. The 30-day timeframe is intended to promote clarity and fairness in business transactions, ensuring that vendors or service providers receive their payments within a reasonable period after they have delivered goods or services. In contrast, other options present different scenarios that do not align with the established guidelines for overdue payments. For instance, stating a payment is due upon receipt of goods or services would mean that payments are expected immediately, which may not account for the time necessary for processing invoices. Additionally, confirming payment is more about the administrative process than determining a payment's status as overdue. Lastly, if an invoice is not submitted in time, it may complicate the payment timeline, but it does not directly address when a payment becomes overdue based on the contract terms.