The government’s Payment Times Reports Register provides new information on the payment policies of Australian businesses and highlights the payment times of those with a turnover of more than $100 million and, in turn, the impact that has on their small-business suppliers and clients.
This first edition of the register to be published has reveals that more than 30 per cent of invoices are being paid late by big business for what has already been earned by small businesses. It notes that the average payment terms of these big businesses sits at 37 days, beyond the 30 days maximum time any small business are meant to wait for their invoice to be paid.
The Australian Small Business and Family Enterprise Ombudsman Bruce Billson welcomed the release of the register, but at the same time has expressed disappointment at the findings.
“It’s an important first step in addressing late payments, which continues to be a huge issue for small businesses,” Billson said.
The Ombudsman has reiterated the call for big businesses to be upfront and honest about the time it takes to pay their small business suppliers.
“The manufacturing industry has the most work to do in terms of lifting its average standard payment terms of 50 days, while media and telecoms industry is among the best performers, pledging to pay their suppliers within 25 days on average,” Billson said.
“My office will be keeping an eye on future reports to gauge trends and do what we can to ensure big businesses are living up to the information provided on the register, Billson added. “In the meantime, I encourage small businesses to engage with the register and make informed choices about who they do business with.
“Given much of the Australian small business community has been rocked by the COVID-19 pandemic, prompt payment times are critical,” he said. “Big business has a role to play in the nation’s recovery and that starts with paying their small business suppliers on time. Adopting e-invoicing is a great way to ensure suppliers are paid promptly. Good business pays.
“Ultimately, cashflow is king for small and family businesses and if they are paid on time, the whole economy benefits,” the Ombudsman concluded.