Quick Guide: Alberta Government Contractor Payment Terms

Trying to make sense of Alberta government contractor payment terms? While business-to-government (B2G) companies can typically count on reliable payments, government contractor payment timelines across Canada vary, and not every province makes it simple or follows suit with the federal guidelines. In this guide, we’ll explore what to expect if you’re contracted with the province and how to accelerate payments if the timeline doesn’t work for you.

Typical Payment Terms for Government Contractors in Alberta

Oftentimes, jurisdictions have laws that outline specific terms for their vendor contracts. In Alberta, the Procurement Accountability Framework Manual sets the rules for how goods and services are purchased by the province. However, it does not set mandatory timelines for contractor payments or discuss specifics like interest on late invoice payments, with the exception of the construction industry, as the Prompt Payment and Adjudication Regulation clarifies that contractors must be paid within 28 days and subcontractors must receive payment within seven days of the contractor being paid. 

Outside of this, each department may set its own payment timelines, and individual contracts may vary because of this. Most Alberta government departments have an internal standard to pay invoices within 30 calendar days of receiving and accepting goods or services. This is often referred to as having “net 30 terms.” 

To collect interest, a contractor must include a clause in the contract that defines the rate and conditions. Without it, the government has no obligation to compensate for delays.

Common Reasons for Alberta Government Contract Payment Delays

Even if your contract stipulates net 30 terms, your business may wait even longer for payment. Let’s look at some of the reasons behind this. 

Invoicing and Approval Delays

Each department is responsible for handling its own payments. This often means an invoice has to move through several people before it’s approved. If the invoice is sent to the wrong contact, lacks a required reference number, or isn’t matched to the correct deliverable, the process can stall.

Errors, Disputes, or Documentation Gaps

Even small errors, like a missing purchase order number or inconsistent billing details, can stop an invoice from moving forward. In some cases, departments may dispute charges or request additional documentation before processing payment, particularly if the scope of work changed or was completed ahead of schedule.

Delays in Acceptance of Goods or Services

Payment timelines typically begin after the government accepts the work. If no one formally signs off, the clock hasn’t started. This can be a significant issue when there’s no clear handoff process or when deliverables are reviewed by multiple stakeholders.

Internal Processing Cycles

Some departments issue payments in weekly or biweekly batches, rather than on a rolling basis. If your invoice misses the cut-off, it may sit idle until the next cycle. Smaller departments or remote agencies may also face staffing or approval bottlenecks that slow things down.

How to Get Paid Faster on Government Contracts in Alberta

While you cannot control internal workflows within Alberta’s ministries, you can take proactive steps to reduce delays. The strategies below focus on what you can do before, during, and after submitting your invoice.

Set Clear Payment Terms in the Contract

Alberta’s procurement policies do not mandate payment timelines, so your contract is your strongest tool for protecting your cash flow.

• Clearly Define the Payment Window: Include a specific timeline, such as 30 calendar days from receipt or acceptance.
• Include a Payment Trigger: State exactly when the payment clock begins, whether it is upon invoice submission, delivery, or formal acceptance.
• Add an Interest Clause: If you want to charge interest on late payments, it must be written into the contract with the applicable rate and conditions. This may not speed up payments, but it can make it easier to manage slow payments. 

Confirm Invoicing Procedures Up Front

Do not wait until you submit your first invoice to learn what is required.

• Identify the Right Contact: Confirm who is responsible for reviewing and approving invoices.
• Verify the Submission Process: Ask where to send invoices and what format or references are needed.
• Request a List of Required Documents: Some departments may ask for delivery confirmations, timesheets, or purchase order numbers.

Include All Required Documentation

Small omissions can create long delays. Double-check everything before submitting your invoice.

• Match the Invoice to the Contract or Purchase Order: This helps the reviewer confirm that the charges align with expectations.
• Provide Proof of Delivery or Acceptance: Attach receipts, sign-offs, or service confirmations if required.
• Ensure Consistency Across All Documents: Double-check that pricing, quantities, and dates match the agreement and supporting files.

Follow Up Professionally and Promptly

After you submit the invoice, do not assume everything is moving forward.

• Confirm Receipt of the Invoice: Reach out to verify that the department received your invoice and that it is being reviewed.
• Ask if Additional Information is Needed: Proactively offer to clarify any part of the invoice to avoid back-and-forth later.
• Check Approval and Processing Status: A short check-in can help prevent your invoice from being overlooked in busy offices.

Leveraging Invoice Factoring for Alberta Government Contractors

Even with well-written contracts and organized invoicing, payment delays still happen. Invoice factoring is a flexible solution for contractors that need reliable cash flow while waiting on government disbursements.

How Factoring Works for Government Contractors in Alberta

With factoring for government contractors, you sell your approved invoices to a third-party factoring company in exchange for a fast advance. Payments typically arrive within one to two business days of invoice approval, though some factors provide same-day payments. Because government clients are seen as dependable payers, factors are often willing to offer favourable terms and low rates, especially when proper documentation is in place.

Benefits of Factoring for Alberta Contractors

• Improves Cash Flow Without Taking on Debt: Factoring converts accounts receivable into working capital based on work already completed. There are no loans or repayment schedules involved.
• Offsets Unpredictable Timelines: Since Alberta does not mandate specific payment deadlines, factoring gives you a way to stay financially stable even when payments are slow to process.
• Offers Better Rates Due to Low Payer Risk: Alberta government invoices are considered low-risk by most factoring companies, which can result in lower discount rates and faster approvals.
• Supports Growth at Any Stage: Whether you’re scaling up or handling multiple contracts, factoring grows with you. There’s no need to renegotiate limits like you would with traditional financing.
• Requires No Long-Term Commitment: You can use spot factoring to fund a single invoice, use the service only when needed, or factor in bulk, which gives you flexibility without locking you into a contract.

Types of Alberta Government Contractors That Leverage Factoring

Because managing payment cycles as a government contractor can be challenging, and most businesses qualify for factoring, it can be a good fit for many industries. We’ll explore a few below.

• Construction and Infrastructure: Contractors bidding on public tenders for roads, utilities, and public buildings often benefit from construction factoring solutions when dealing with staggered payments.
• Professional Services: From engineers to auditors, many firms take advantage of factoring for professional services to reduce strain while awaiting payment from government clients.
• Technology and IT: When agencies outsource cybersecurity or managed IT, technology companies commonly factor invoices to maintain cash flow for growth and staffing.
• Transportation and Logistics: Alberta contractors working in freight hauling, equipment transport, or seasonal services like snow removal often turn to freight factoring or trucking factoring to maintain reliable cash flow while waiting on government payments.
• Manufacturing and Equipment Suppliers: Those supplying tools, gear, or equipment to the province often rely on manufacturing invoice factoring to cover costs before payment comes through.
• Janitorial and Maintenance: Companies offering cleaning, waste removal, or HVAC services can benefit from janitorial or maintenance contract factoring when delays stretch beyond 30 days.
• Healthcare: Many medical providers and staffing firms choose invoice factoring for healthcare contracts to bridge the gap between invoicing and payment from Alberta Health Services or other public agencies.

Accelerate Your Alberta Government Contractor Payments with Factoring

It’s easy to get approved for factoring as a government contractor, as factoring companies care more about the creditworthiness of your clients than your credit score. That means even small or new businesses can qualify. If you’d like to explore your options, talk to a factoring specialist.

Editor’s Note: Please note that every effort has been made to ensure the accuracy of the information provided, and links to policies are included for your reference. However, contract terms are set by individual jurisdictions and are subject to change. Be sure to check with relevant regulatory bodies and your contract as needed.

FAQs on Alberta Government Contract Payment Terms