Waiting on a large customer to pay can put real pressure on a small business. For years there was little public information on how quickly big companies paid their suppliers. The Payment Times Reporting Scheme was set up to change that. It began on 1 January 2021 and was reformed in September 2024.
The scheme does not force anyone to pay faster. What it does is make payment habits public. Small businesses can use that information before they sign a contract or set terms. This post explains how the scheme works and how to use it.
What the scheme is for
The scheme’s official website says it creates transparency on how and when large businesses pay their small business suppliers. Large businesses report their standard payment terms and their actual payment times. They also report on their use of supply chain finance arrangements. The scheme sets no payment terms and does not mandate payment times.
It is a federal scheme overseen by the Payment Times Reporting Regulator. The current Payment Times Reporting Rules 2024 started alongside the reforms on 7 September 2024. Because it is federal, the reporting rules are the same across Australia. Other laws that affect contracts and debt recovery can differ by state and territory, and they change over time.
Which businesses must report
Since the 2024 reforms, large businesses with annual consolidated revenue of $100 million or more are reporting entities. They must also be constitutionally covered entities. The Regulator’s information sheet sets out what this term covers. Some Corporate Commonwealth entities also report, while entities registered with the ACNC remain excluded.
Large groups now lodge one consolidated report. Entities controlled by another reporting entity are excluded, and the controlling entity reports for the whole group. Businesses that fall below the threshold can apply to the Regulator to report voluntarily. So the register mostly shows large companies and groups.
How often reports are made
Reporting entities must submit two reports a year. Each report covers a six month period based on the entity’s financial year. Each one must be lodged within three months after the end of that period. The reports then appear on the Payment Times Reports Register.
Since the reforms, reporting entities control when their reports are released. The Regulator monitors the reports and can redact information that is not in the public interest. It can also publish details of businesses suspected of failing to comply and accept enforceable undertakings. These changes are set out in the Regulator’s information sheet on the payment times reforms.
Fast payers and slow payers
The reforms added two useful labels. Businesses that pay small business suppliers within 20 days are listed as fast small business payers. Entities in the slowest 20 per cent of payers overall or within their industry may be identified as slow small business payers. Those slow payers may have to make enhanced disclosures.
For a supplier, these labels are a quick signal. A customer listed as a fast payer may suit a business with tight cash flow. A slow payer label is worth a closer look before you agree to terms. Neither label tells the full story, so read the figures behind it.
Using the register before you sign
The register is free to use and does not require an account or login. Any small business owner can look up a reporting entity’s average payment terms and payment times. You can view results on the dashboard or download the data file. This makes it a simple check before a tender, a quote or a contract renewal.
Say you are pitching for a long term contract with a large company. A quick search shows the terms it normally offers and how long it actually takes to pay. If the two differ a lot, you can raise payment terms early in the talks. Service firms that work with big offices, such as a commercial cleaning partner, are in exactly this position.
Keep in mind that the reports contain aggregate data only. They do not report on individual small businesses or individual invoices. Your own experience with a customer may be better or worse than the average. Use the register as one input, along with your own records.
How small businesses are identified
Reporting entities must use the Small Business Identification Tool to work out which suppliers count as small businesses. The tool is available through the Payment Times Reporting Portal. The Regulator says no other data sources should be used for this purpose. Small businesses are included in the tool by default.
A business that would rather not be identified can opt out. You register as a user of the portal, log in and choose to stop being listed. You can opt back in later if you change your mind. The Regulator explains the steps on its page about opting out of the Small Business Identification Tool.
What to do about late payment
If a large business is not reporting when it should, you can tell the Regulator. Small businesses, company officers, employees and members of the public can all report a failure to comply. Complaints about payment times go to the Australian Small Business and Family Enterprise Ombudsman. The Regulator also answers questions about the register.
Clear terms on your own side help too. State your payment terms on every quote and invoice, and send reminders before and after the due date. Using responsive design for email templates makes those reminders easy to read on a phone. Keep a record of when each invoice was sent and paid so you have the facts if a dispute arises.
A wider spread of customers also means less reliance on one slow payer. A few basic SEO tips can help more local buyers find you in search. Each new account you win reduces the pressure any single customer can put on you.
Frequently asked questions
Does the scheme make large businesses pay within a set time?
No, it does not. The scheme sets no payment terms and does not mandate payment times. It makes payment terms and times public so suppliers can see them.
How much revenue does a business need before it must report?
Large businesses with annual consolidated revenue of $100 million or more are reporting entities, if they meet the other tests. Some entities, such as those registered with the ACNC, are excluded. Others below the threshold can apply to report voluntarily.
Will my business name appear in a report?
Reports contain aggregate data only. They do not report on individual small businesses or individual invoices. You can also opt out of the Small Business Identification Tool through the portal.
Who do I contact about a late payment?
Payment times complaints go to the Australian Small Business and Family Enterprise Ombudsman. Concerns about a business failing to report go to the Payment Times Reporting Regulator. For a dispute over a specific debt, a lawyer can explain your options under the laws of your state.
This article is general information only and is not legal advice. Laws and processes differ between states and territories and can change. Speak with a qualified lawyer about your own situation.