ATA wants big business to follow Canberra pay times lead

Maguire points to myriad business costs trucking firms are under pressure to pay

ATA wants big business to follow Canberra pay times lead
Trucking firms have many bills that must be paid quickly


The federal government should mandate its pledge to ensure swift payment times for all big business, according to the Australian Trucking Association (ATA).

All contractors who bill the government electronically will be able to claim interest if they are not paid within five working days, federal finance minister Mathias Cormann and employment minister Michaelia Cash announce today.

"It’s a great announcement, but it doesn’t go far enough," ATA CEO Ben Maguire says.

"The government should require that all customers to pay trucking companies within five working days, if using e-invoicing, or 20 days maximum. 

"Most of the costs incurred by small trucking businesses must be met before they can bill their customers.

"These include wages or personal living costs, fuel, tyres, insurance, finance costs, registration and maintenance. 

"This means small businesses are extremely vulnerable to adverse changes in their payment terms, and often have little capacity to negotiate them with large customers.

"These new standards will lift the standards for paying businesses on time."

Read about the small-business cashflow crisis report, here

The changes announced today will apply to all electronic invoices below $1 million and will start from January 1, initially with the Department of Finance and Services.

A maximum 20-day payment term will continue to apply in instances where e-invoicing is not used, following a move from the Government to cut payment terms for all government invoices below $1 million from 30 days to 20 days from July 1 this year. 

Maguire says the ATA will seek an urgent meeting with the Department of Infrastructure, Transport, Cities and Regional Development on the implementation of this new standard for the Government’s infrastructure program. 

"Commonwealth-funded infrastructure projects must reflect these new payment term standards, and Australian Government funding agreements with states and territories should implement these new payment terms for major road projects," he adds.

Federal small businss ombudsman Kate Carnell gives the move a thumbs up.

"This is a game-changer for e-invoicing small businesses that are directly engaged in a contract with a federal government agency," Carnell says.

"The next step would be to apply this to businesses right down the supply chain.

"Our Small Business Counts report shows that late payments continue to hamper small business viability, with half of all small businesses reporting late payments on 40 per cent of their invoices.

"This policy will improve cash flow for small businesses so they have the confidence and the capital to re-invest.

"We encourage small and family businesses to adopt e-invoicing and make the most of the benefits that flow from that, including reduced administration costs and fewer processing and handling errors.

"We know that around 1.2 billion invoices are exchanged in Australia every year.

"Research shows it costs about $30 to process a paper invoice and about $9 per e-invoice, a significant saving.

"Around 20 per cent of traditional invoices are sent to the wrong person and about 30% contain incorrect information – delaying payment.

"In fact, research shows the Australian economy would benefit to the tune of $28 billion over a decade, if all businesses switched to e-invoicing.

"This federal government e-invoicing payment initiative sets a benchmark for all states, teritories and big business to follow."


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