Government launches inquiry into late payments to SMEs
The Australian Small Business and Family Enterprise Ombudsman (ASSFEO) has launched an inquiry into the payment practices of big businesses and how it impacts the financial viability of small businesses.
Ombudsmen Kate Carnell from ASSFEO said the Payment Times and Practices Inquiry will be aimed at weeding out patterns of behaviour that are undermining the financial viability of small businesses and putting pressure on the entire economy.
It will be led by the ASBFEO in partnership with state-based small business commissioners in New South Wales, Victoria, South Australia and Western Australia, and will be carried out in association with the Council of Small Business Australia and the Australian Institute of Credit Management.
Ms Carnell said anecdotally, small businesses are reporting that some large businesses are taking longer than ever to pay their bills.
“This Inquiry aims to establish an accurate picture of the trends that have emerged in recent years surrounding the commercial arrangements between large and small businesses, as well as governments and small enterprises,” said Ms Carnell.
“The Inquiry will assess the impacts these trends are having and will identify practical solutions – including possible regulatory and market-based responses – that can be implemented quickly and effectively to help address identified problem areas.”
MYOB chief executive Tim Reed welcomed the inquiry stating that the latest MYOB snapshot indicated that more than three quarters or 77 per cent of SMEs were impacted by customers not paying their bills on time.
“As small business ombudsman Kate Carnell rightly points out, this can mean the difference between success and insolvency,” said Mr Reed.
“It’s clear we need to do more to support our SMEs and give them a fair go in business. SMEs shouldn’t be stymied by larger organisations not playing ball.”