Aim is to make it a reference point to encourage improved payment time performance, Carnell says
A new National Payment Transparency Register has been set up with an aim to promote best practice in business-to-business transactions.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) is inviting businesses to sign up to the register to further “their commitment to good payment time practices”.
The move is result of findings of ASBFEO’s inquiry into pay times and practices that showed the existing average time to pay ranged between 14-40 days.
Ombudsman Kate Carnell says the snapshot compared favourably with some multinational companies, which wrote payment terms of 60-120 days into their contracts.
“Cash flow is king to small business; late payments can be the difference between success and insolvency,” Carnell says.
“Overseas experience has demonstrated that faster payments through supply chains will free up cash flow and stimulate investment, jobs and growth.”
The Ombudsman is also inviting signatories to Business Council of Australia (BCA’s) Australian Supplier Payment Code to promote their practices on the register.
Carnell had earlier raised concerns whether the code will be able to usher significant changes to the problem of unreasonable payment times.
While ASBFEO believes the code was a “positive step”, she says it lacks accountability needed to solve the problem.
“The Business Council of Australia initiative acknowledged the problem of late payments but didn’t provide a reporting mechanism,” Carnell says.
“We wrote to the signatories and invited them to publish their payment performance data.
“I congratulate the companies that responded and urge others to be equally transparent.”
The Ombudsman is encouraging small businesses to inform her office if the terms on the national register are being flouted and they still have to deal with late payments.
ASBFEO is also keen to hear about positive results.
“The register is under ongoing review and development,” Carnell says.
“We hope it will become a reference point to encourage and promote improved payment time performance.”