The Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, has welcomed the Australian Government’s announcement of a review of the Payment Times Reporting Act.
The review, to be chaired by former minister Craig Emerson, will look at 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% of big businesses paid small business customers within 30 days while 23% took an astounding 120 days to pay their bills.
“About 40% 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.
Analysis by ASBFEO of the data provided by 7000 businesses, many with a turnover of more than $100 million, reveals:
- 23% of big business take more than 120 days to pay their small business suppliers
- 9% take between 61 and 90 days to pay
- 37% take between 31 and 60 days to pay
- 18% take between 21 and 30 days to pay
- 13% pay their bills in fewer than 20 days.