Thousands of large Australian businesses have been invited to register early for the federal government’s new Payment Times Reporting Scheme, which requires businesses with a total annual income of over $100 million to publicly report their payment terms and practices to their small business suppliers.
From January 1st, 2021, large businesses must start reporting on how and when they pay their small business suppliers, with the first payment times reports to be provided from July 1st, 2021.
Around 4,200 of Australia’s largest businesses including foreign companies that operate a business in Australia are being invited to register their details.
The aim of the scheme is to improve payment outcomes for Australia’s 3.5 million small businesses by creating transparency around the payment terms and practices of large businesses.
Minister for Employment, Skills, Small and Family Business, Senator the Hon Michaelia Cash, said that longer payment times hurt small business cash flow.
“The government is acting decisively and responsibly to support small businesses to overcome the challenges posed by COVID-19. It is now even more important large businesses pay their small business suppliers the money that they are owed promptly,” she said.
“The Morrison Government has already got its house in order and is paying its bills faster. Commonwealth agencies are paying invoices for contracts under $1 million within 20 days and paying e-invoices within 5 days.
“Improving payment times for small businesses will help them to prosper, grow and employ more Australians.”
By providing access to information on large business payment performance, small businesses will be able to make more informed choices about their potential customers. Greater transparency will also incentivise large businesses to pay their small businesses on time.
After an initial 12-month transition period, civil penalties will apply to reporting businesses that fail to report or give the Payment Times Reporting Regulator a false or misleading report.
For more information on the scheme, visit industry.gov.au/ptrs