What can late payment under the Prompt Payment Act lead to?

Late payment under the Prompt Payment Act can lead to penalties imposed on federal agencies. This act requires federal agencies to pay their invoices on time to suppliers and service providers, and failing to do so within the guidelines set forth can incur interest penalties. These penalties serve as a financial accountability measure to ensure that federal agencies adhere to timely payment practices, ultimately fostering better relationships with businesses and reducing the potential for disruption in the delivery of goods and services. Thus, the penalties are a key consequence aimed at encouraging compliance with prompt payment standards.