In brief
Following the significant updates in the Payment Times Reporting (PTR) Scheme, new guidance material was introduced in December 2024, detailing criteria for identifying reporting entities, data aggregation, and identifying fast and slow small business payers. It also introduces concepts like volunteering, nominee, and subsidiary reporting entities for flexible reporting. The December 2024 guidance was released together with Reporting Fields Interim Guidance helping businesses understand the new reporting format. The Regulator has also published its January 2025 Regulator Update setting out its 2025 priorities, which include enhancing reporting quality, increasing awareness, and incentivising better payment practices.
In detail
Since the changes to the Payment Times Reporting Act 2020 were enacted in June 2024, there has been a number of new developments in relation to the rules which are relevant to any entity that is currently applying the new Payment Times Reporting Scheme (PTRS).
Specifically, new Payment Times Reporting Rules were registered on 12 September 2024 and new Guidance Material along with the Reporting Fields Interim Guidance were published on 16 December 2024. There is also a proposed minor amendment that was released for consultation which, once finalised, will require reporting entities to report the proportion of total ‘value’ rather than ‘number’ of small business trade credit payments. The PTR Regulator also recently released its priority areas for 2025, as well as payment times insights gleaned from the 1 January 2024 to 30 June 2024 reporting period. Each of these key developments are reviewed further below.
Details of the New PTR Guidance Material
New PTR Guidance Material was published by the Regulator on 16 December 2024, offering crucial insights into the evolving landscape of payment times reporting, including:
- changes to the criteria for identifying entities that must report and those to be consolidated in the reporting
- prescriptive instructions on aggregating data into different datasets for preparing each period's payment times report and performing statistical calculations using these datasets, and
- details on how to identify fast and slow small business payers and the directions the Minister may issue to Slow Small Business Payers.
The new Guidance Material is divided into several sections, with details of each section outlined as follows.
Entities that must report
- This section outlines the legislative criteria for an entity to determine if it has become a reporting entity at the start of its financial year:
- Is the entity a Corporate Commonwealth Entity (CCE)?
- Does the entity have a connection to Australia?
- Was the entity’s consolidated revenue more than $100m in its previous financial year?
- Is the entity excluded from reporting?
- The first two criteria retain the same meaning as was always applicable since the PTRS applied. However, the third criterion has been significantly updated as a result of the PTR amendments such that consolidated revenue includes the total revenue of the entity and any entities it controls as per the AASB Accounting Standards published by the Australian Accounting Standards Board (AASB).
- This section also provides several examples to test for control under paragraph 7 of AASB 10: Consolidated Financial Statements or using financial statements (Examples 2-5). This includes any foreign entities that meet the test for control (Example 6). Exceptions can be applied according to AASBs, such as investment entities and joint control (Examples 7-8).
- Consolidated revenue must consider the total revenue of the entity and all its controlled entities, calculated in accordance with AASB guidelines, which includes the elimination of intragroup income. If an entity uses a foreign currency in its financial reports, the consolidated revenue must be translated into AUD when compared to the $100m threshold (Example 9).
- The last criterion has also been updated to ensure entities that are controlled by another reporting entity are treated as excluded entities. This is due to the consolidation requirement in the new Act, with an example provided for foreign controlling entities (Example 10).
- Lastly, this section outlines the requirement for reporting entities to notify the Regulator through the Portal once they have ceased to be a reporting entity. This applies in circumstances such as winding up and deregistering, consolidated revenue falling below $100m (Example 11), acquisitions by other reporting entities (Example 12), and certain other circumstances.
Volunteering and modifying reporting structures
- This section outlines the criteria and obligations for non-reporting entities applying to become volunteering, nominee, or subsidiary reporting entities, along with information on ceasing to be such entities.
- Volunteering reporting entities retain the same definition as was always applicable, allowing a CCE to volunteer to participate in the PTRS if it is not a reporting entity and is not controlled by one.
- Nominee reporting entities are introduced to enable multiple reporting entities to submit a consolidated report if they are controlled by a non-reporting CCE (Example 14). A reporting entity cannot become a nominee reporting entity for other entities it does not control, even if it is the provisional head company within a Multiple Entry Consolidated (MEC) group (Example 15). The controlled reporting entities of a nominee reporting entity must still submit simplified payment times reports, with further details available in the 'What to Report' section.
- Subsidiary reporting entities are also introduced, allowing controlled entities of a reporting entity to report independently for themselves and the entities they control. This enables entities under separate governance to comply with the PTRS on their own (Examples 15-16).
How and when to report
- The reporting periods and deadlines remain the same as before, with the exception of reporting periods ending between 31 December 2024 and 30 March 2025, which have an automatic extension of their reporting deadline until 30 June 2025.
- Reports must still be submitted through the Portal. However, submitters are now required to ensure that the following entity information within the Portal is accurate and up to date, as this information is no longer included within the payment time reports:
- identifying and classifying details
- contact information
- financial information, and
- entity structure.
- Revised reports can also be submitted as usual via the Portal, and all reports submitted will be automatically published to the Register.
What to report:
This section outlines the four steps for preparing reports and provides guidance for modified reporting:
- Step 1: Identify entities to consolidate
- Step 2: Determine reporting requirements
- Step 3: Prepare datasets
- Step 4: Complete the payment times report
Step 1: Identify entities to consolidate
- A reporting entity must consolidate itself and all of its controlled entities, including those that are not a CCE or do not have a connection to Australia (Example 19), except in the following cases:
- where a controlled entity has been determined by the Regulator to be a subsidiary reporting entity along with its controlled entities, and
- where the reporting entity is a nominee reporting entity, it must only consolidate payments made by the nominated entities and their controlled entities.
- Furthermore, control of an entity for consolidated reporting purposes is assessed in the same manner as for consolidating revenue (i.e. this includes all entities that are controlled for the purposes of the AASB Accounting Standards). This means all entities included in assessing the consolidated revenue should be included for consolidated reporting, including foreign entities.
- Controlled entities are determined at the end of the reporting period, which includes any acquired entity during the reporting period, and all payments made by the acquired entity in that period which includes any period of time prior to the entity being acquired (Example 20).
- Entities that cease to be controlled by the reporting entity and their payments during the reporting period need to be excluded from the reporting entity’s consolidated report (Example 21).
Step 2: Determine reporting requirements
- Entities can skip steps three and four if they require modified reporting under the following conditions:
- the entity is in external administration (such as in liquidation)
- all consolidated entities have no payments to Australian small business suppliers, as determined by the SBI Tool, or
- the entity is a nominated entity under a nominee reporting entity.
- A reporting entity will need to include additional information for each operating segment if it discloses them under AASB 8: Operating segments.
Step 3: Prepare datasets
- Reporting entities must first create the Trade Credit Payment (TCP) Dataset. This dataset should include all payments made by the consolidated group under trade credit arrangements, defined as payments made, or that can be made, at least one calendar day after the supply of goods or services (Example 22). Special circumstances to consider include:
- agreements with multiple arrangements should be treated separately (Examples 23-24), and agreements without a payment should be excluded as no payment is required (Example 25)
- government and employee payments should be excluded from the TCP Dataset as they do not qualify as trade credit arrangements
- disputed payments must be reported once the payment has been made, and the original invoice details can only be discarded if the invoice has been reissued (Examples 26-27)
- payments from a controlled entity can be excluded if the reporting entity cannot access them and this must be disclosed in the report, and
- payments made by a third party on behalf of a reporting entity must be reported by the reporting entity.
- When preparing the TCP Dataset, several special data treatments should be considered. Some treatments differ from the previous guidance:
- actual payment amounts should be included, which take into account credit notes if they reduce the payment amount
- partial payments should be included and flagged, as they are used to calculate the percentage of small business procurement, even though they are not used for calculating payment times data
- reporting entities are required to identify invoices that are eInvoice capable, i.e. invoices or payments that are capable using the Peppol eInvoicing network (Examples 29-30)
- Recipient Created Tax Invoices (RCTIs) are now required to be included in the TCP Dataset
- payment terms must be included as the number of calendar days in the TCP Dataset for each payment (Examples 32-35), and
- payments made to entities without an ABN are excluded from the TCP Dataset, including payments to foreign suppliers or suppliers who do not hold ABN. This exclusion also applies to payments made by a foreign subsidiary controlled by the reporting entity that does not record ABNs in the system (Example 36).
- After preparing the TCP Dataset, the reporting entity must prepare a Small Business Trade Credit Payment (SBTCP) Dataset by identifying payments made to small businesses within the TCP Dataset. These payments can be identified by running the ABNs from the TCP Dataset through the SBI Tool. Additional details on the SBI Tool can be found further below in the SBI Tool Update.
- The reporting entity is then required to exclude partial payments and calculate the payment times (i.e. payment date minus invoice issue/receipt date) for each payment to complete the SBTCP Dataset.
- For RCTIs, the payment time between the RCTI issue date and the payment date must be calculated, and
- The definition of ‘when an invoice is paid’ for each type of payment has been removed from the current guidance. This has subsequently removed the requirement for supply chain finance arrangements payment date, which, according to the previous guidance, referred to the time when the invoice would have been due for payment if the supplier had not used supply chain financing arrangements (instead of the actual date of payment).
- In practice, the TCP and SBTCP Datasets will include the following information (only in the SBTCP Dataset*):
- Payer Name | Payer ABN (or ACN, ARBN) | Payee Name | Payee ABN | Payment Date | Payment Amount | Credit Card Payment (Y/N) | eInvoice enabled Payment (Y/N) | Partial Payment (Y/N) | Invoice Date | Invoice Receipt Date (if known) | Payment Terms (calendar days) | RCTI (Y/N) | Small business payee (Y/N – SBI Tool) | Payment Time (calendar days)*
Step 4: Complete the payment times report
The following table outlines the statistical calculations required for the payment times report and the corresponding dataset to be used. Detailed calculation instructions are available within the Guidance Material.
| Statistical Calculation | Dataset | Note |
|---|---|---|
| Most common payment term (statistical mode) | SBTCP | |
| Most common payment term (range) | SBTCP | Only required if the reporting entity has controlled entities (Example 38). |
| Estimated most common payment term for the next reporting period | N/A | (Example 39) |
| Comparison of receivable terms to payment terms (Longer/Shorter/Same) | SBTCP | Three approaches to calculate receivable terms (Examples 40-41). |
| Average payment time | SBTCP | |
| Median payment time | SBTCP | |
| 80th and 95th percentile payment times | SBTCP | Indicates how many days to pay 80% and 95% of small business payments (Example 42). |
| Percentage of small business payment within terms | SBTCP | |
| Percentage of invoices paid within specified days | SBTCP | |
| Percentage of small business procurement* | SBTCP & TCP | Partial payments are required to be included in this calculation. |
| Percentage of Peppol-enabled small business procurement | SBTCP | |
| Offers supply chain finance (Yes/No) | N/A | |
| Practices and arrangements to accept invoices (Yes/No) | N/A | |
| Payment practices to small businesses – legal or voluntary obligations (Yes/No) | N/A | (Examples 43-44) |
| Report comments | N/A | |
| Confirmation statement | N/A |
*Consultation occurred on a minor amendment (currently in draft) to the Payment Times Reporting Rules 2024 in January 2025. The amendment to Rule 13(1)(a) will require reporting entities to report the proportion of total ‘value’ rather than ‘number’ of small business trade credit payments
The reporting entity must also provide additional information for each operating segment if it discloses them under AASB 8: Operating segments. Payments that cannot be classified by segment are excluded (Examples 46-47). The additional information includes:
- mode payment term
- average payment time
- median payment time
- 80th and 95th percentile payment times
- proportion of payments within 30 days, 31–60 days and 61 or more days, and
- payments made on time.
Modified reporting
Reporting entities in external administration, those that have a reporting nominee, and those that do not pay small businesses are required to provide modified reports with less information (Example 48).
Applications
Entities are required to submit applications through the Portal for all inquiries, including becoming a volunteer, nominee, or subsidiary reporting entity, as well as for exemptions from reporting or extensions of time to report.
The Regulator will only accept an application outside the Portal if the entity is ineligible for RAM access because it does not have an ABN or does not have a member eligible for a standard strength myID.
A fee will be applied for certain applications after 1 July 2025, with further information to be provided by the Regulator.
The decisions on applications may be published on the Register to ensure transparency for users of payment times information.
More information on the submission, assessment, and review of applications by the Regulator can be found within this section of the Guidance Material.
Fast and slow small business payers
- A slow small business payer is identified by comparing the reporting entity’s 95th percentile payment time against that of all reporting entities or those reporting entities within the same ANZSIC Division. If a reporting entity’s 95th percentile payment time ranks in the slowest 20% during a reporting cycle and it exceeds 30 days, the entity is classified as a slow payer.
- There are two reporting cycles each year (1 January to 30 June and 1 July to 31 December), and reports are assigned to a reporting cycle based on the reporting period end date (Examples 51 and 52).
- The Minister can issue a direction to a slow small business payer, requiring it to make disclosure about its payment times on its website and in procurement, ESG related, and other documents (Example 53), if the entity:
- is a slow payer for two consecutive reporting cycles, or
- is a slow payer for one reporting cycle and fails to submit a report in the period before or after.
- The Minister, or the Regulator (as the Minister’s delegate with delegated powers), can choose to use this power on any reporting entities or group of reporting entities who are slow payers. The Minister or the Regulator must also consider the relevant circumstances.
- This section outlines what entities can be directed to do, including specifying the exact wording and how visible the disclosure must be on the website and documents (such as quotes, investor documents, and any other documents). Entities can apply to the Administrative Review Tribunal (ART) to review the direction.
- The duration of the direction will be at most one year (unless another direction has been issued). However, the information about the direction published on the Register may remain longer.
- A reporting entity qualifies as a fast small business payer if its 95th percentile payment time is 20 days or less for two consecutive reporting periods (Example 55).
- The Regulator will publish and maintain a list of fast small business payers on the Register, and the qualification will automatically expire nine months after the end of the qualified reporting period (unless the entity qualifies again during the nine months).
Interim guidance on reporting fields and update on SBI Tool
The PTR Regulator published on 16 December 2024 Interim Guidance regarding changes to the reporting fields and made significant updates to Information Sheet 6: Small business identification (SBI) Tool, allowing users to select a specific year when running an SBI Tool query to ensure small businesses are captured correctly for the specific reporting period. Details are set out as follows.
Interim guidance on reporting fields
- The Understanding Reporting fields - interim guidance outlines 27 fields (31 fields for reporting entities with controlled entities) within the standard payment times report, with four fields related to the reporting entity information pre-populated. The four additional fields for reporting entities with controlled entities pertain to the range of most common payment terms.
- Reporting entities with operating segments will have a modified report - AASB 8, which includes an additional ten fields for each operating segment. These ten fields consist of one field for the operating segment name and nine fields for information similar to what is included in the standard report but relevant to each segment:
- Operating Segment - most common payment term (statistical mode)
- Operating Segment - average payment time
- Operating Segment - median payment time
- Operating Segment - 80th percentile payment time
- Operating Segment - 95th percentile payment time
- Operating Segment - percentage of small business trade credit arrangements paid within payment terms
- Operating Segment - invoices paid within 30 days (%)
- Operating Segment - invoices paid in 31-60 days (%), and
- Operating Segment - invoices paid over 60 days (%).
- Nil reporters, entities in external administration and nominated entities will have their own modified reports, simplified with a maximum of 16 fields, with four fields related to the reporting entity information pre-populated as well.
SBI Tool update
- The Information Sheet 6: Small business identification (SBI) Tool has been updated to include instructions for selecting a year when running the SBI Tool. The year to be selected is based on the reporting period end date, except for reporting entities with 52-53-week financial years, which should use the ordinary end date (Examples 1-4).
- The Regulator will perform a major update to the tool’s data in January each year to ensure data accuracy. If a reporting entity believes the data is inaccurate, it can submit a form with documentary evidence via the Portal or request that the supplier contact the Regulator to correct the data. The reporting entity should re-run the tool once it’s updated or use the uncorrected output file for preparing the report.
Summary of the January 2025 Regulator Update
The January 2025 Regulator Update is the first update published from the recently appointed Regulator, Robyn Beutel. This Update sets out payment times insights gleaned from the Reporting Cycle commencing 1 January 2024 through to 30 June 2024 and information on the Regulator’s activities, including their priorities for 2025, which in summary aims to:
- improve the completeness and quality of reporting
- broaden awareness of the Scheme, and
- create incentives for large businesses to improve their payment times and practices.
Regulator’s 2025 priority areas
- Proactively raise the profile and awareness of the PTRS. Provide education materials, guidance, fit-for purpose tools and support for compliance.
- Undertake research and utilise data to better understand drivers of payment practices and increase transparency on fast and slow small business payers.
- Strengthen the integrity of the PTRS to ensure the completeness and quality of reports provided by the reporting entities.
- Ramp up the use of the Regulator's power to enforce compliance for entities with late, overdue, or misleading reports.
- Escalate the publication of non-compliance and the Regulator’s response to entities failing to meet their reporting obligations.
Insights from PTR Reporting Cycle 7 (1 January 2024 to 30 June 2024)
- Payments times are improving over the long term. Entities reported making an average of 68.9% of small business payments within 30 days, an increase of 5.7% from an average of 63.2% when reporting commenced.
- Payment terms are also improving. The average payment terms offered to small businesses improved to 35.1 days compared to 36.6 days when reporting commenced (reduction of 1.6 days). However, 61 entities have shifted their payment terms from 30 days or less to more than 30 days.
- Small businesses made up an average of 30.2% of the value of reporting entities’ total procurement.
- Both the fastest industry (Financial & Insurance) and the slowest industry (Manufacturing) are improving in percentage of small business payments made within 30 days.
The takeaway
The recent PTRS updates highlight the importance of precise guidance and improved tools for effective reporting. The updated guidance and tools aim to streamline reporting processes, ensuring data accuracy and supporting entities in meeting their obligations effectively. The Regulator's focus on raising awareness and enforcing compliance underscores the scheme's commitment to improving payment practices. Progress in payment times is evident, but ongoing efforts are needed to address extended terms.
If you would like to discuss any aspects of the above amendments to the PTRS, reach out to our Payment Times Reporting specialist team or your PwC adviser. You can also find out more on how PwC can help you with your Payment Times Reporting obligations on our PTR webpage.
Sean Lee
Jeff Pfaff
Nirmal Singh
Zac Yang
Yasmin Steele
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