The Business Council of Australia has launched a new voluntary code to ensure big businesses pay their small suppliers within 30 days of receiving a correct invoice.
The BCA describes its new Australian Supplier Payment Code as a voluntary, industry-led initiative that enshrines the importance of prompt and on-time payment for small business suppliers through compliance with a set of best-practice standards.
The code aims to address delays in payment that have seen some suppliers wait up to 120 days after sending an invoice, said Jennifer Westacott, CEO of the Business Council of Australia. "The launch of the Australian Supplier Payment Code begins a new age of cooperation and mutual respect between businesses big and small. We know paying business suppliers promptly and on time is critical to supporting healthy cash flows and working capital, and ultimately supports a business’s viability and ability to expand.
"The Business Council decided to lead this initiative because we know businesses of all sizes are deeply connected and depend on each other to thrive. Trade between small, medium and large businesses is valued around $520 billion per year, so the whole country benefits when we work together more productively," Westacott said.
Printing Industries has welcomed the move, with Andrew Macaulay, CEO, saying it would be 'fantastic' for printers. "One of the big issues facing small suppliers is extraordinarily extended payment terms from their customers, and this will go a long way to improving cash flows in small business," he said.
The Business Council said signatories of 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