The Latest from Automic Group

A Payment Times Reporting scheme has been introduced and to take effect from 1 January 2021 will require large businesses and government enterprises to publicly report bi-annually on their payment performance to small businesses.

The government expects the proposed regime to create transparency around the payment practices and times of large businesses and improve payment outcomes for small businesses.

The new law will apply to businesses with an annual total income exceeding $100 million and imposes reporting obligations as to payment terms to small business suppliers with an annual turnover of less than $10 million.

These businesses will need to disclose, on a bi-annual basis:

• How quickly they say they will pay, and how long they take to actually pay small suppliers, including the shortest and longest standard payment periods;
• Whether they use supply chain finance schemes or similar arrangements;
• If a notifiable event (e.g. change to the business’ income year or business name) has occurred;

Large business groups will need to report to the “Payment Times Reporting Regulator” within 3 months of the end of each 6 month reporting period and maintain records of compliance for at least 7 years.

Large businesses will be given a transition period of 18 months before compliance and enforcement actions apply.  It is estimated that this scheme will increase compliance costs for reporting entities by an average of $22.5 million per year, on an annualised basis.

Civil penalties apply to businesses that fail to comply with these reporting obligations or those that provide false and misleading information in a report.  Although no financial penalties will apply for late payments, entities may face reputational impacts for failing to disclose their payment information or disclosing long standard payment periods.

Subscribe

Keep up to date with regulation changes by subscribing to the Automic Group blog.