Payment Times Reporting Scheme (PTRS) in Focus

The Payment Times Reporting Scheme (PTRS or the Scheme) came into effect on 1 January 2021, aiming to improve payment times for Australian small businesses by requiring large businesses (>$100 million turnover) to report on their payment times to small business suppliers (<$10 million turnover).

A statutory review of the PTRS was conducted in June 2023, which found that reporting complexities had caused a reduction in compliance. As part of the Government’s response, changes to the Scheme have been introduced via the Payment Times Reporting Amendment Act 2024 (the Amendment Act), which was passed through Parliament, commencing from 7 September 2024.

1. Streamlined reporting obligations

New reporting obligations will commence for reporting periods beginning on or after 1 July 2024. An automated extension has been provided for reporting periods starting between 1 July 2024 and 30 September 2024, with reports not due until 30 June 2025. The reforms intend to streamline reporting by reducing the total number of reporting fields, by providing detailed calculation methodologies to improve consistency of data, and through the introduction of consolidated reporting under a new definition for ‘a reporting entity’.

2. New Regulatory Powers to act on non-compliance

The Regulator has been provided additional powers to improve the effectiveness of the Scheme, including the publishing of non-compliance for suspected reporting entities, and the ability to accept an enforceable undertaking as part of remediation by a non-compliant reporting entity.

3. New incentives for compliance by reporting entities

The reforms have introduced new incentives for large businesses to improve their payment times to small business suppliers with the Regulator having the ability to publish a public list of ‘fast small business payers’ for entities that pay small business suppliers within 20 days. Notably, the Regulator will also have the ability to identify and require disclosure by ‘slow small business payers’ (defined as reporting entities in the slowest 20 of payers overall or within their industry) on their website, in financial statements and other documentation such as procurement and tender documents.

Overall, DPO for our sampled companies was up by 4.3 days in FY24. All companies in our sample appear to meet the reporting threshold for PTRS (based on reported revenue).