The new online Payment Times Reports Register publishes information about the payment policies of businesses with a turnover of more than $100 million.
Small business ombudsman Bruce Billson said the new register requires big businesses to be up front and honest about the time it takes to pay their small business suppliers.
“We welcome the Payment Times Reports Register, which reveals the payment policies of more than 6,000 businesses,” Mr Billson said.
“It’s an important first step in addressing late payments, which continues to be a huge issue for small businesses. While it’s still early days, the register reveals that more than 30% of invoices are being paid late by big business for what has already been earned by small business. That’s incredibly disappointing.”
According to the register, average payment terms are sitting at 37 days – when 30 days is the maximum time any small business should be waiting for their invoice to be paid and some leading larger businesses are committing to pay small business suppliers within a week.
Mr Billson noted that the manufacturing industry has the most work to do in terms of lifting its average standard payment terms of 50 days, while the media and telecoms industry is among the best performers, pledging to pay their suppliers within 25 days on average.
“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,” he said.
“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.”
The ombudsman said big business has a role to play in the nation’s recovery and that starts with paying their small business suppliers on time.
“Ultimately, cash flow is king for small and family businesses and if they are paid on time, the whole economy benefits,” he added.