The Payment Times Reporting Scheme (PTRS) was introduced by the Australian Government and commenced on 1 January 2021. It requires large businesses and large government enterprises to report certain details of their payment times and terms with small business (a small business is defined as a business with turnover of less than $10 million per annum).
The PTRS is intended to increase transparency regarding how large businesses deal with their smaller suppliers and to assist small businesses and the public in making decisions about which companies to deal with.
The PTRS applies to:
- Large businesses and certain government enterprises with a total annual income of over $100 million
- Controlling corporations where the combined total annual income for all members is more than $100 million, or
- Businesses with a total annual income greater than $10 million and that are part of a group headed by a controlling corporation with a collective income greater than $100 million
If a business falls into any of the above categories, reporting under the PTRS is required in respect of transactions with small business suppliers.
Payment times reports are required to be submitted twice a year via an online portal, with the first report due on 30 September 2021 for the six-month period to 30 June 2021.
The scheme is administered by the Payment Times Reporting Regulator, and there is a 12-month transition period before enforcement measures begin to apply.
There are material financial penalties for failing to report under the PTRS or for producing a false or misleading report. The regulator will also maintain a public payment times reports register, showing how reporting entities are paying their small business suppliers.
Businesses required to report under the PTRS can use the Small Business Identification (SBI) tool to identify which of their suppliers are classified as small businesses.
It’s an important development in ensuring transparency for small businesses at a time of such uncertainty.