The Payment Times Reporting Bill 2020 passed through the Senate on 3 September 2020 and awaits royal assent. The bill was passed at the House of Representatives on 11 June 2020.
Small businesses will be set to benefit from this new laws, whereby a payment times reporting scheme will be introduced requiring large businesses and government enterprises with an annual total income of over $100 million to report on their payment terms and practices for their small business suppliers.
The bill defines small business as those that have a turnover of less than $10 million, which covers 99% of all businesses.
MYOB chief executive, Greg Ellis welcomed the passing of the bill, saying small business can finally see due recognition being literally paid to them and that by adding this level of transparency it will help alleviate some of the cashflow pressure that many small business owners are under.
Mr Ellis confirmed that the most recent MYOB Business Monitor data demonstrated that the SME owners rank late payments and cash flow as high sources of pressure, with 38% of SMEs stressed by late payments and 43% citing cash flow as a primary source of concern.
When this bill was introduced to parliament, ASBFEO Kate Carnell said small businesses will be able to make more informed decisions about their potential customers. This will allow the small businesses to have some choices around who they do business with.
“This reporting framework will require big businesses to be up front and honest about the time it takes to pay their small-business suppliers. It will be important that the information reported is easy to access and integrate,” Ms Carnell said.
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