Login
iscover
Suppliers rely on certainty that bills will be paid promptly within the 30-day limit, they say.
Newsletter
Business, industry welcome review into payment times reporting
08 December 2022
•
12 minute read
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
Business and industry groups have welcomed the government’s review of the Payment Times Reporting Act as a crucial opportunity to ensure small business is paid on time.
Australia’s 2.5 million small businesses needed the certainty of being paid promptly in order to plan, grow and create jobs said ACCI chief executive Andrew McKellar.
“This review will support the important objective of ensuring small suppliers get paid on time, every time,” Mr McKellar said.
“Payment times to Australian small businesses have reduced since the implementation of the Payment Times Reporting Scheme. But there is still much more work to be done, as Australian payment times continue to lag behind international benchmarks and are still exceeding the 30-day limit.
“Late payments can cause extreme financial stress to those small businesses operators heavily reliant on cash flow.
“It’s crucial that the payments reporting system works as efficiently as possible to maximise compliance and give small suppliers greater certainty.”
==
==
The Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, said the review to be chaired by former minister Craig Emerson would examine ways to improve payment times and terms for small businesses and consider the introduction of mandatory payment times.
Recent analysis by ASBFEO based on the data reported by big business revealed only 31 per cent of big businesses paid small business customers within 30 days while 23 per cent took 120 days.
“About 40 per cent of the requests for assistance that come into our office relate to payment times,” Mr Billson said.
“A vast number of big businesses just aren't meeting the mark and it's causing needless harm and cashflow challenges for small and family businesses who are waiting too long to have their invoices paid.
“At a time when small and family businesses are facing headwinds, big business can play their part and help get that cash going into the business for small and family businesses that have done what they said they do. They've provided the service, they've provided the input and big businesses should pay their bills in a timely fashion.”
Payment information reported by big business to the regulator reveals those operating in the manufacturing, retail trade and construction sectors have recorded the worst performance in paying their small business suppliers.
Business Council chief executive Jennifer Westacott supported greater transparency for small businesses and said getting the system working was crucial.
“Businesses of all sizes depend on each other to thrive, employ more people and help keep communities strong,” she said.
“An effective reporting system that minimises red tape will give small businesses the peace of mind and confidence they need to make decisions about who they trade with. That means they can get on with growing, investing and employing.
“Businesses have undertaken significant investments to meet their reporting obligations. The review is an opportunity to ensure the scheme delivers representative payment times data while minimising compliance costs and complexity for reporting entities.
“In particular, businesses want to work with the government to ensure that the Small Business Identification Tool gets it right. To give businesses and government a clear and reliable set of baseline data we can’t allow large businesses to be misidentified as small or vice versa because just one wrongly categorised business can skew the data.
“The relationship between small, medium and large business is worth around $600 billion a year to the Australian economy. When the entire business ecosystem thrives, the whole country thrives.
“In 2017 the BCA launched the Australian Supplier Payment Code with support from COSBOA and the Victorian Government. The code has 155 signatories with collective annual revenue of around $670 billion. It is working to reduce payment times, ease stress and let small businesses get on with the recovery.
“Since its launch the code has grown to cover some of Australia’s biggest companies with thousands of small business suppliers, helping smaller businesses grow with their larger partners.”
|
ReplyForward |
You are not authorised to post comments.
Comments will undergo moderation before they get published.