After extensive consultation by the Victorian Government with business, industry and the Business Council of Australia, it became clear that the issues small businesses face as a result of late payments are widespread throughout Australia and not just localised to Victoria.
The Australian Supplier Payment Code is a voluntary national code of fair payment from businesses to their small business suppliers.
The Code will be administered by the Business Council of Australia and will come into effect on 1 July 2017.
The VSBC encourages businesses of all sizes to become signatories to show their leadership on this important issue.
Australian Supplier Payment Code (ASPC)
Australia needs competitive businesses with healthy cash flows to grow our economy and future prosperity.
For small businesses particularly, prompt and on-time payment is crucial. A reliable cash flow and working capital enhances a business’s ability to grow, create jobs and plan for the future. The stress and uncertainty of lengthy or late payments can take a direct person toll on employees, direct owners and shareholders.
No business exists in isolation. We believe everyone – including larger purchasing businesses, governments and the communities in which employees and business owners live – benefits when we have a viable and productive small business supplier base.
The Australian Supplier Payment Code is a voluntary, industry-led initiative to enshrine the importance of prompt and on-time payment for suppliers through a set of best practice standards.
Signatories to the Code commit to the following payment practices and policies:
Prompt and on-time payment commitments
- Pay eligible Australian small business suppliers within 30 days of receipt of a correct invoice or receipt of correct product from the suppliers (whichever is the latter), or on mutually agreed terms, or on terms that are consistent with a standard industry practices. (Signatories can choose to pay within shorter timeframes.)
- Pay correct invoices from suppliers on time.
- Provide clear guidance to suppliers about the company’s payment procedures.
- Work with supplier businesses, where practicable, to apply technologies and practices that will speed up invoice reconciliation, approval and payment processes (eg online portals, electronic invoicing, Electronic Funds Transfer, payment cards etc).
Compliance and reporting commitments
- Put in place clear, fair and efficient processes for dealing with complaints and disputes about payment times and practices (eg create a point of contact, issue clear procedural guidelines, set timeframes for the investigation and response, report on actions taken).
- Report on company policies and practices in place to comply with this Code.
Publication of the Code and Signatories
The Australia Supplier Payment Code and a list of signatories to the Code will be published online.
Any company operating in Australia can be a signatory to the Code.
In summary, signatories to the Code commit to:
- Pay small business suppliers within 30 days (subject to conditions)
- Pay all suppliers on time
- Provide clear guidance about payment procedures to suppliers
- Work with suppliers to improve invoicing and payments practices
- A process for resolving payment disputes and complaints (see link to guidance note)
- Basic reporting on company policies and practices in place to comply with the Code.
The Business Council Secretariat contact for the Code is Simon Pryor, Executive Director, Infrastructure and Regulation.
Read the media release from the Minister for Small Business, Innovation and Trade, Philip Dalidakis, here.