The Federal Government has released the payment times reporting rules (Payment Times Reporting Rules 2020 ( and from 30 June 2021 large businesses with an annual turnover greater than $100 million (including businesses in a corporate group which exceed that turnover) will have to submit payment times reports twice each reporting year to a newly created payment times reporting regulator.

The payment times report will be in a standard form (not yet released) and be required to include specific information about any large business' payment terms and practices, including:

  1. The standard payment periods for their business at the start of the reporting period (including shortest and longest standard payment periods).
  2. The proportion of small business invoices paid by their business during the reporting period which were paid:
    1. within 20 days after the invoice was issued;
    2. between 21 and 30 days after the date of issue;
    3. between 31 and 60 days after the date of issue;
    4. between 61 and 90 days after the date of issue;
    5. between 91 and 120 days after the date of issue;
    6. more than 120 days after the date of issue.
  3. Information explaining any changes to standard payment periods for their business during the reporting period.
  4. The proportion of all goods and services procured from small businesses in the reporting period by their business.
  5. Details of any small business supply chain finance arrangements (including the proportion of small businesses paid under the arrangements, any benefits received from providers of those arrangements and requirements imposed on small businesses to use those small business supply chain finance agreements).
  6. Particulars of membership fees or subscription charges imposed on small businesses to allow them to submit a tender or an invoice to their business.

This information in turn once reported will be uploaded onto an online free and publicly accessible payment times register and large businesses will be required to keep records of information used to prepare payment times reports for at least seven years after the report is submitted.

Clearly the Federal Government is concerned about some large Australian businesses taking advantage of small businesses resulting in an unnecessary impact on the cash flow of those small businesses and leading to increased failure rates. It is hoped that the new laws granting greater access to and public scrutiny over the conduct of large businesses in Australia will level the playing field for smaller businesses who simply don't have the market power to correct this issue. It is hoped that by shining a light on destructive payment practises of some large Australian businesses there will be a shift towards the adoption in Australia of more reasonable payment terms and that this in turn will stimulate the economy through a net benefit resulting from normalising small business payment times to an average of 30 days rather than the current 78 days.

If large businesses don't comply then the payment times reporting regulator may name and shame those businesses and impose civil penalties of up to 0.6% of a large business' annual turnover. The regulator will have broad audit monitoring and investigation powers and ultimately can enter, inspect, search and seize evidence as a part of investigation and prosecution powers.

The new laws commenced on 1 January 2021. However, large businesses have to submit their first payment times report within 3 months from the end of that entity's first full reporting period. If you are a large entity and have a full reporting period ending on 31 March 2021, 30 April 2021, 31 May 2021 or 30 June 2021 (end of financial year being most common), you need to act now to ensure you are in a position to meet your reporting obligation which could run from 30 June 2021 as the first deadline if your business runs a reporting period ending on 31 March 2021.

If you're a large business you should review your internal systems and procedures to make sure you're capturing the data you need to complete and submit your payment times report when it is due. Compliance programs may need updating. Reputational opportunities (if you're one of the many good large businesses in Australia) and risk exists as the payment times register goes live. You might also consider addressing some access to capital requirements to ensure payment practices can strive for best practice given the likely public scrutiny.

If you're a small business it would be worthwhile keeping an eye out for the payment times register so you can understand patterns of behaviour by the large businesses with whom your business interacts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.