Certified Government Financial Manager (CGFM) 2026 – 400 Free Practice Questions to Pass the Exam

The Prompt Payment Act of 1982 was established to improve the efficiency of governmental financial operations by ensuring that vendors, who provide goods and services to the federal government, are paid in a timely manner. The main objective of the Act is specifically to mandate that federal agencies make payments within 30 days of receiving a proper invoice. This timeline is crucial because it helps maintain positive relationships between the government and its suppliers, encouraging continued compliance and support from vendors and ensuring that cash flow remains steady for those businesses engaged in government contracts.

While prompt payments can indeed help in minimizing interest payments and disputes related to late payments, the core focus of the legislation is the 30-day payment requirement, ensuring that federal obligations are met efficiently. Other options suggest different timelines or objectives not aligned with the Act’s main purpose. For instance, completely eliminating interest payments is not feasible in all scenarios, and the regulation of invoice issuance does not directly correlate with the intent of the Prompt Payment Act.