A new Payment Times Reporting Scheme applies from 1 January 2021 to help increase transparency around large business’ payment performance. It is hoped that this initiative will create incentives for improved payment times and practices.
The scheme, which applies to large businesses and groups with annual total Australian income of more than $100 million, will require these entities to publicly report twice per year (i.e. three months after 30 June and 3 months after 31 December), the payment terms and practices they have in place with any small business suppliers that have annual turnover of less than $10 million.
Subsidiaries within large groups that have annual Australian income of $10 million or more are required to separately report. Large government enterprises with annual total income of more than $100 million are also required to report.
Entities that are required to submit a Payment Times Report need to include aggregated data on the reporting entity’s payment terms and practices such as:
Submitted reports will be published on a public register.
It is very important for large businesses and government entities to adhere to these new reporting requirements. Entities that fail to give a report, fail to maintain payment records or provide false and misleading information in a report, may be subject to civil penalties.
Although the scheme has a 12-month transition period and compliance and enforcement measures will only apply from 1 January 2022, all reporting entities are still required to report in this first 12 months.
For assistance with your Payment Times Reports, please speak to your Crowe adviser or get in touch with us here.