News comes from Australia that a payments “code,” which holds firms accountable for late payments, is making headway. As reported by Mirage News, the Business Council of Australia’s (BCA’s) payment code has been covering about $500 billion in corporate revenues across various supply chains tied to small businesses (SMBs).
That coverage comes as more companies have been signing on to the code, including Scentre Group (the owner and operator of Westfield in Australia and New Zealand), Woolworths, Coles, Kmart and Target. The code requires for smaller suppliers to be paid within 30 days of invoicing.
BCA Chief Executive Jennifer Westacott said, “We launched the code with the Council of Small Business Organisations of Australia and Victorian Government in 2017 because we know that businesses of all sizes depend on each other to thrive. We heard community concerns about small business payment times, and we are acting to make sure they get a fair go. Since its launch, the code has grown to cover some of Australia’s biggest companies with thousands of small business suppliers, helping smaller businesses grow with their larger partners.”
An independent review found that it works well for small businesses, the executive stated.
In other examples of payment codes, reports said a U.K. construction firm has offered a “first petition of its kind” to the construction industry that, as drafted by the Lionheart Group, holds late payments as “against the law” if they come after an agreed upon date. The late payor would be fined.
Arron Bowman-Smith, director of Witney-based Lionheart Group, said of late payments that “since I started, I’ve been chasing people around. It’s affecting the construction industry in an extremely negative way; people are losing their livelihoods through no fault of their own. We need to put a stop to it once and for all.”
Also in the U.K., The Association of Independent Professionals and the Self-Employed (IPSE) has welcomed the Business, Energy and Industrial Strategy Committee’s (BEIS) statement that the small business commissioner should be able to fine companies that are late payers to freelancers.
As reported in PoliticsHome, IPSE Senior Policy Advisor Jonathan Lima-Matthews said, “While the government is making a concerted effort to address the scourge of late payment, it does appear to be locked in a holding pattern of consultations on this blight on self-employment. IPSE research has shown freelancers spend an average of 20 days a year chasing late payments, with 43 percent doing work they were not paid for at some point in their career.”
Freelancers lose about £5,400 (just over $7,000 USD) a year on average, said the executive.
BlueCross BlueShield Of Vermont In Spotlight Over Late Payments
In the U.S., VTDigger reported this past week that BlueCross BlueShield of Vermont has delayed tens of thousands of dollars in payments to several medical providers, which has put a “financial strain” on smaller practices in the state.
The company said in response that the delays can be tied to a new operating system that debuted at the beginning of the year. That system, according to reports, has made verification of at least some claims difficult.
In addition, the company is offering loans to those affected to help smooth cash flow issues. In a series of interviews with the site, some healthcare providers, which noted that they get a significant portion of their revenues from BlueCross, said they are borrowing money from personal accounts to keep their practices functional.
One source said, “I’m so upset because it’s not like they don’t have the money. Our patients don’t even know what’s going on. They have no idea that they’re paying their premiums and their doctors aren’t getting paid.”
As many as 75 providers have been affected by the delays, and the firm has 30 days to make payments before interest begins to accrue.