Payment Times Reporting

Why is this being introduced?

In April 2017, the Australian Small Business and Family Enterprise Ombudsman reviewed payment times and practices in Australia and identified that late payment and extended payment times were impacting business of all sizes. 

The Government has introduced this mandatory public reporting scheme as part of its commitment to improving payment times from large to small business.

Who does this apply to?

Large entities and government enterprises where:

• Income greater than $100m p/a; or

• Income greater than $10m p/a if the entity is part of a group with a combined total income of greater than $100m p/a.

What needs to be reported?

Large entities will need to report information on how and when a business pays their small business suppliers. Some details include:

• Standard payment periods to small businesses (including the most common, shortest & longest).

• The proportion (by total number & total value) of small business invoices paid within the following payment brackets from the issue date of invoice:

  • Less than 21 days

  • 21-30 days

  • 31-60 days

  • 61-90 days

  • 91-120 days

  • 120+ days

• The proportion (by value) of procurement from small business suppliers

• Details of use/offers of supply chain finance to small businesses.  

What is the consequence of non-compliance?

There are material financial penalties for:

• Failing to report - up to 0.2% of annual turnover (i.e up to $1m for a business with turnover of $500m)

• Producing a false or misleading report - up to 0.6% of annual turnover (i.e. up to $3m for a business with turnover of $500m) 

The identity of non-compliant entities and details around non-compliance, can also be reported publicly.