Australian Government launches online register of small business payment times

How to stay compliant, accountable and protect your business reputation.

A new age of public accountability for procurement compliance and payment terms has begun as the Australian Federal Government launches the Payment Times Reports Register (PTRR).

The Register is the reporting tool of the Payment Times Reporting Scheme (PTRS). The Scheme commenced on 1 January 2021 to reduce payment times for small and medium enterprises from big business. The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) estimates 53% of small business invoices get paid an average of 23 days late - adding up to an estimated $115 billion in late payments.

Minister for Employment, Workforce, Skills, Small and Family Business, Stuart Robert, said the free online register brings accountability and transparency to payment practices that enable small businesses to make informed decisions about who they do business with.

“As a former business owner-operator myself, I understand the vital importance of cash flow for small businesses. The Payment Times Reports Register will empower small businesses with the ability to see who is paying on time and who isn’t,” Minister Robert said.

“We know when small businesses have confidence they’ll be paid on time there are wider economic benefits helping businesses to grow, invest and employ more Australians.” 

What’s on the register?

Available online as a free, read-only spreadsheet, the register lists entity details including business names, ABN/ACNs, and parent companies.

Data for each 6-month reporting period includes:

• standard payment terms for small business suppliers
• shortest and longest standard payment terms offered to small businesses
• total small business invoices paid in less than 20 calendar days, 21-30 days, 31-60 days, 61-90 days, 91-120 days, and over 120 days
• total value of small business invoices paid over the above periods
• total value of procurement from small business suppliers
• details of any practices (including tenders) and subscription or membership fees small businesses pay to become a supplier and/or to issue invoices
• supply chain finance arrangements - total value of procurement, use of arrangements, and benefits for the reporting entity (including commissions)

Time to get your supplier spend house in order

Co-founder and CEO of Robobai, Julian Harris, agrees that the Register is a positive move for Australian small business cash flow - but warns eligible larger businesses that the onus is on them to get their procurement and payment house in order.

“It’s the entity’s responsibility to provide accurate and complete data for each reporting period,” he said.

“To do that, you need to have complete visibility of the small and medium businesses in your supply chain - and ensure your payment terms are reported accurately to comply with the legislation that backs the Scheme.”

The first reporting period results are in:

• eligible reporting entities - over 75% have small business suppliers
• average payment terms offered to small businesses = 37.27 days
• industry average - invoices paid within 20 days = 44%
• industry average - Invoices paid after 90 days or more = 3%
• manufacturing offers the longest average standard payment terms = 48.62 days
• public Administration and Safety offers the shortest payment terms = 24.06 days

AI-powered reporting to reduce non-compliance risks

For enterprises and organizations considering a procurement system makeover - the time is now to ensure that reporting is accurate, timely, and accurately reflects contract terms and payment times.

AI-powered platforms streamline data entry, cleansing, categorizing, and analysis. With custom categories, risk notifications, and supplier configurations, audits and reporting can be real-time and hassle-free.

“With the right systems in place, reporting under the Scheme doesn’t have to be a burden on your procurement or finance team.” said Robobai’s Julian Harris.

“You can lighten the load on overwhelmed resources, ensure compliance, and build a positive procurement and supplier reputation that showcases your small business spend as part of your overall ethical and sustainable spend strategy.”

A platform like Robobai, powered by AI and machine learning, not only takes away the administrative burden. It enables larger businesses to generate on-demand reports, categorize suppliers for effective reporting, and turn data into actionable insights across supplier payment patterns.

“The right tools mean fewer overdue invoices, less guesswork on spend analysis and categorization, and a birds-eye view of your accounts payable across all your business units at any moment in time." said Harris.

“You can guarantee you’ll meet reporting requirements on time, reduce the risk of non-compliance penalties, and be the impetus for effective collaboration between procurement and accounts functions that traditionally work in silos.”

The risks of non-compliance

Penalties include:

• fines for producing a false or misleading report - up to 0.6% of annual turnover (i.e. up to $3m for a business with turnover of $500m)
• fines for failing to report - up to 0.2% of annual turnover (i.e up to $1m for a business with turnover of $500m)
• fines for failing to comply with an audit notice or assist the auditor
  

 More than money: shining a light on your spend

Julian Harris warns that the consequences go beyond financial penalties; the register puts your payment performance in the public arena, making it open to scrutiny from competitors, suppliers, and customers.

“Every eligible entity needs to ask themselves; are they confident their payment performance won’t have them named and shamed?” he said.

“Understanding your own procurement process and outcomes is critical to business profitability — but procurement targets are no longer restricted to cost-cutting and savings. Companies are being held accountable by Boards, investors, and the community across modern slavery, environmental initiatives, and prompt payment terms for small businesses.”

There are no quotas as part of the Scheme for spending with small businesses, but your small business spend acts as a marker of your commitment to diversity, equity and inclusion (DEI), and sustainable procurement strategies.

The Register includes classification by industry type - enabling a comparison on small business spending across industries. Eligible entities must lodge a report even if they don’t use small and medium businesses.

Getting started with a smarter system

If your procurement and accounts exist across systems and spreadsheets, it can seem overwhelming to get started on transformation. It's tempting to jump straight to an audit as soon as you can.

Before you start with a complete spend audit that's sure to uncover some bumps along the way, it's essential to connect and integrate all of your data. Start by:

1. Setting the baseline - consolidate all data to enable meaningful analysis
2. Sorting your categories - sort spend into granular categories, including supplier business size
3. Getting to know your suppliers - assess risks against procurement policies

Be compliance-ready with AI-powered spend intelligence. Download the Payment Times Information Sheet.