It’s time for big business to pay up, says ombudsman

The Australian Small Business and Family Enterprise Ombudsman said the data, compiled from a new analysis using data from the Payment Times Reporting Regulator also revealed those operating in the manufacturing, retail trade, and construction sectors have recorded the worst performance in paying their small-business suppliers.

“These figures are appalling,” said the ASBEFO Bruce Billson.

“I say to the nation’s big businesses who are making small business wait four months to get paid, ‘you can’t be serious’.

“Good businesses pay. That’s a vital part of business relationships.

“Big business must show leadership, respect and care for our small businesses and pay their bills on time. And for big business leaders urging support for small business ‘doing it tough’, a practical and achievable measure is to get serious about improving payment performance to small business.”

The analysis of the data provided to the regulator by 7,000 businesses, many with a turnover of more than $100 million, revealed seven out of 10 big businesses failed to meet the 30-day payment goal set by the Business Council of Australia.

A breakdown of payment times shows:

• Twenty-three per cent of big business take more than 120 days to pay their small-business suppliers
• Nine per cent take between 61–90 days to pay
• Thirty-seven per cent take between 31–60 days to pay
• Eighteen per cent take between 21–30 days to pay
• Thirteen per cent pay their bills in fewer than 20 days.

According to the data, the worst performers were big businesses in manufacturing, retail trade, and construction.

Only 14 per cent of manufacturing businesses paid their small-business suppliers within 30 days and only 22 per cent of big businesses in retail trade paid small businesses within 30 days. This was also the case in construction.

The best performers were big businesses operating in public administration and safety, but it was still only just over half (54 per cent) of small-business invoices paid within 30 days.

The next best was accommodation and food services where 49 per cent of small businesses were paid within 30 days.