Australia will take a name-and-shame approach to combatting the issue of late payments to B2B suppliers, according to Smart Company reports Monday (November 12).
Australian Small Business and Family Enterprise Ombudsman Kate Carnell announced a new review into the issue of late B2B payments in the country, a response to Minister for Small and Family Business Michaelia Cash, who requested the review. According to reports, an inquiry into the issue last year found Australian corporates pay their invoices 26.4 days past due, on average.
“It’s still a huge issue,” Carnell said in an interview with the publication. “Some companies have improved their game, but we’ve still got a huge amount of work to do in this space.”
The ombudsman’s review will examine how late payment habits impact small business cash flow, and assess how many suppliers are offering discounts for on-time invoice payments. Carnell has reportedly requested payment practice information from some corporates, seeking their supplier payment terms and conditions.
Separate reports Monday in the Sydney Morning Herald noted that Carnell is seeking this information from the 200 largest companies in Australia, and that she plans to use this information to “out” the businesses with the toughest payment contracts with their suppliers.
“We will name the companies that use really, really long payment times,” she said in a statement. “I think most businesses care about what the community thinks about them and what their corporate image looks like so I don’t think they will want to be named-and-shamed for excessively long payment times.”
The Business Council of Australia has already introduced its own code of conduct for the private sector, a voluntary initiative for businesses to promise to pay on time. Yet there are concerns that the BCA is non-enforceable; Carnell is now reportedly working with the Council of Small Businesses of Australia to review the effectiveness of the code of conduct, which commits its signatories to pay invoices within 30 days.