Payment Times Reporting Scheme
The phrase Cash is King was mentioned repeatedly in boardrooms across the country in 2020 as our Nation’s Government, Economy and Businesses managed the financial impact of the COVID-19 pandemic as working capital management again re-emerged as the life blood of many businesses, particularly in the SME space.
As of 1 January 2021, the Australian Government has introduced the Payment Times Reporting Scheme (PTRS). The scheme aims to improve payment times for Australian small businesses.
Under the scheme, large businesses and large government enterprises need to report their small business payment terms and times.
The scheme endeavours to:
- increase transparency around large business’ payment performance
- help small businesses decide who to do business with
- create incentives for improved payment times and practices
- help the public make decisions about the large businesses they buy from
The scheme applies to:
- large businesses and certain government enterprises with a total annual income of over $100 million
- controlling corporations where the combined total annual income for all members is more than $100 million
- businesses with a total annual income greater than $10 million and that are part of a group headed by a controlling corporation with a collective income greater than $100 million
If your business falls into one of these categories, you’re required to report the payment terms and practices for your small business suppliers. You will submit online ‘Payment times reports’ twice per year.
In summary businesses that fall into the above criteria, will be required to report their actual supplier payment terms, their payment policies and procedures. This information will then be utilised by small businesses when choosing to enter business dealings during tender processes.
Our Audit and Assurance Division, Headed up by Wali Aziz and our Technology Advisory Division, Satellight, headed up by Cameron Stone can assist you in establishing policies, procedures and systems to manage, report and analysis the suppler payment date that you must report on an bi-annual basis.
Please feel free to reach out to us for an obligation free discussion about the Scheme.