Victoria’s Small Business Commissioner is urging Australia’s largest corporations to sign up to the Australian Supplier Payment Code (ASPC) following the release of a review of the code today.
The findings of the review highlight the issue of late payments as a perennial problem for Australian businesses. The review found a need to attract many more signatories, particularly entities with large numbers of small business suppliers in their supply chains. Currently there are 101 signatories to the code representing an annual revenue of $550 billion.
The Victorian Government is the only state to have signed up to the code to pay small businesses within 30 days.
Recent research on payment terms between large corporations and small business found Australia ranked behind 18 other countries, with significantly longer payment days.
Commissioner Judy O’Connell said, “The review highlights the importance of paying small business suppliers on time. It is disappointing that only around 50 of the Business Council of Australia’s 140 members, representing Australia’s largest corporations, are currently signatories.
“I encourage those businesses that haven’t yet signed the code to take the initiative and look after the small businesses in their supply chain.”
“Paying small business on time and within 30 days removes the stress of worrying about how to get their expenses paid, as well as helping them maintain healthy cashflows and employ more people. It is critical for a thriving economy.”
A recent survey conducted by Small Business Commissioners and the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) found around one in two businesses reported more than 40 per cent of their invoices were paid late last year. More than half reported always receiving late payments by large/multinational businesses.
In May 2017 the Business Council of Australia and the Victorian Government launched the ASPC. The code is a voluntary initiative to ensure that small business suppliers are paid on-time and within 30 days of receiving a correct invoice.
Any business, not-for-profit or government organisation can sign-up to the code at any time. The code also obliges large companies to help small business suppliers implement new technologies and practices that will assist them with more efficient invoicing and payment.
The key recommendations from the review included:
- promoting awareness of the code targeting governments, large and medium-sized businesses to sign the code
- clarifying the definition of a small business as having turnover of less than $10 million
- strengthening the coordination with Small Business Commissioners and ASBFEO for dispute resolution and monitoring breaches of the code.
The VSBC is an independent government agency advocating on issues affecting small business, helping small business learn about their rights and responsibilities and avoid or resolve any disputes.
The VSBC can be contacted by calling 13 VSBC (13 8722) or by visiting www.vsbc.vic.gov.au
Media contact: judy.o’firstname.lastname@example.org or 0423 029 898