Corporates Must “Lift Their Game” on SME Payment Times - ASBFEO
(1 February 2023 – Australia) Only three out of ten corporates settle small business customers invoices within 30 days while almost one-quarter take over 120 days to pay according to new payment times data released by the Payment Times Reporting Regulator.
The regulator released the latest data on payment performance of more than 7000 upper commercial and large corporates with turnover greater than A$100 million.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) analysis of the data reveals there has been virtually no improvement by middle market and large corporates in the last six months with enterprises operating in manufacturing, construction and retail trade sector verticals recording the poorest performance in paying their SME suppliers on time.
The best performers were corporates operating in public administration and safety yet it was still just over half (51 percent) of small business invoices paid within 30 days.
“This is a woeful performance and is bitterly disappointing news for small and family businesses to start the year. At a time when small and family businesses are facing headwinds, big business can play their part” said the ASBFEO Bruce Billson.
“Nearly one-quarter of big businesses taking four months or more to pay their bills is just not acceptable and there is little sign of improvement by the worst performing businesses. This needs to be taken more seriously. Finance is the oxygen of enterprise. Cash flow is vital to these small and family businesses. There is abundant scope for big businesses to lift their game and they should” Mr Bilson added.
“It is concerning that register data indicates payment terms and payment performance have not materially improved since the commencement of the scheme. Because payment practices have not improved across recent reporting periods, we will also explore how the register can be used by small business suppliers, investors, advisers, supply chain managers and other stakeholders to incentivise improved payment performance by large businesses” commented The Payment Times Reporting Regulator, Mary Jeffries.