An overview of the Australia Payment Times Reporting Scheme
The Payment Times Reporting Scheme is an Australian law introduced in January 2020. It mandates large businesses and certain government enterprises to publicly disclose their payment terms and times for small business suppliers.
The Payment Times Reporting Scheme was developed to help small businesses get paid faster. The Payment Times Reports Register — a tool that includes public information on large business payment practices — gives small businesses insight into their customers' payment practices. The intention of publicly disclosing this information is to incentivize large companies to promptly pay small business suppliers and adopt payment best practices.
The Australian Government established the Payment Times Reporting Regulator in 2021 in the Treasury, which administers the scheme under the following:
The Regulator registers the reports on the Payment Times Reports Register (the register).
It’s always advisable to consult an expert to determine qualifications. In broad terms, if your business operates in Australia and meets any of the following criteria for the most recent income year, reporting is required:
You must include the shortest and longest payment periods your business offers to small business suppliers. This also includes any changes made to the payment periods during the reporting period.
To maintain transparency, you should report the proportion of small business invoices you paid within specific timeframes. These categories include:
To accurately track payment times, your finance systems should record the calendar days it takes for each invoice to be paid from the day it is issued.
You’ll need to provide the proportion, based on total value, of procurement from small business suppliers during the relevant reporting period, compared to all invoices paid in that period.
You must also provide information on any 'notifiable event' between submissions. Notifiable events include changes to the business' accounting period, a business name change on the Business Names Register, and any other event classified as 'notifiable' under the PTR Rules.
If you have any discounts for early payments, you need to disclose that information, including the proportion of invoices paid this way and whether small businesses must agree to participate.
You submit a payment times report (PTR Report) to the PTR Regulator for each six-month reporting period. This report should cover the first six months of your business' income year and each subsequent 6-month period. The income year aligns with your financial year for tax purposes.
Failure to comply can lead to penalties and fines imposed by the Australian Securities and Investments Commission (ASIC). Additionally, if you fail to adhere to PTR Laws, you may face significant reputational harm if the PTR Regulator publishes non-compliance details.
Accounts Payable (AP) teams are pivotal in an organization's financial operations, ensuring that outgoing payments are accurate and timely. Here are some key steps your team can take in preparing for compliance.
Medius accounts payable automation software comprehensively tracks all necessary information for The Australian Payments Time Reporting Scheme. Its advanced functionality ensures compliance with payment parameters and timely payments. Your team can confidently rely on Medius to always keep their compliance in check with:
If you're interested in learning more about how Medius Pay can benefit your business, we invite you to watch this demo. Our demos provide a more detailed view of how the platform works, and how it can help you achieve your payment automation goals.
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