Discover how the Payment Times Reporting Scheme can help your business improve payment practices. Take action now and comply with the new regulations today.
The Payment Times Reporting Scheme (PTRS) is a mandatory scheme that applies to businesses in Australia with an annual turnover of more than $100 million. The PTRS requires these businesses to report their payment times data to the Australian Government.
This data is intended to be used to create a national picture of payment time averages, and identify any areas where improvements can be made. PTRS came into effect on 1 January 2021, and all businesses with an annual turnover of more than $100 million are required to comply. Businesses that don’t comply may face fines or other penalties of up to 0.2% of annual turnover, up to $1 million.
The Payment Times Reporting Scheme is designed to improve payment times and practices in Australia. Businesses are required to report key data on payments and timings of payments made to any business with a turnover under $10 million. This represents around 3.5 businesses in Australia that contribute around $418 million to our economy, around 32% of the gross domestic product. These smaller businesses also employ around 4.7 million Australian workers, which represents around 40% of the active workforce.
The scheme has been designed to help improve cash flow and payment times for smaller businesses, helping them bounce back quicker from the many pressures the sector has faced over the past 3 years including fires, floods and Covid-19.
The scheme will do this by:
The Payment Times Reporting Regulator (PTRR) administers the Payment Times Reporting Scheme. The PTRR is an independent body that reports to the Minister for Small and Family Business, the Workplace and Deregulation.
Their core functions are to receive payment times reports from large businesses every 6 months and publish those reports. These functions are designed to encourage improved large business times by:
However, it is not their role to mandate or enforce payment terms and times by large businesses.
They do have a range of powers to ensure compliance by reporting entities, including powers to:
In addition to their core functions, they must also assist large businesses in identifying small business suppliers as per the definition of the scheme.
The Regulator publishes an annual report on the operation of the Payment Times Reporting Act 2020. This is part of the Treasury's annual report.
The Payment Times Reporting Scheme applies to businesses in Australia with an annual turnover of more than $100 million. This includes all businesses that are part of a group with a total annual turnover of more than $100 million, regardless of whether the individual business’s turnover is less than $100 million.
The Payment Times Reporting Scheme does not apply to businesses with an annual turnover of less than $100 million, including not-for-profit organisations and charities.
Businesses that are required to comply with the Payment Times Reporting Scheme must report data on the:
Payment Times Reports need to be submitted every 6 months, with the next report due on January 1st, 2023, assuming you have already submitted for previous financial periods. Businesses will have 28 days to submit their report from the end of the reporting period to provide the Australian government with all required information, otherwise, they risk facing fines and penalties.
How Do Payment Times Reports Get Submitted?
Reports will be submitted to the Payment Times Reporting Scheme portal, which is currently being managed by the Department of Industry, Science, Energy and Resources. Businesses will need to create an account on the website in order to submit their report.
Further information about the Payment Times Reporting Scheme, including how to create an account and submit a report, can be found on the Payment Times Reporting Scheme website.
Having the right systems in place to be able to accurately report on your data is critical to being able to comply with changes in legislation such as the PTRS.
If you’re not sure whether your current accounting software is up to the task, contact us today, and we can help assess your needs and recommend a solution that will help you comply with the Payment Times Reporting Scheme and any other changes in legislation.
At TeamBlueSky, we have helped many businesses to upgrade their legacy accounting and ERP applications to modern cloud-based technology, increasing their ability to get access to information in real-time, and easily create custom reports to satisfy the increasing transparency demands of businesses operating in Australia.
TeamBlueSky is a leading provider of NetSuite solutions in Australia and has been helping businesses to benefit from the power of cloud-based technology since 2018.
NetSuite is the world’s number 1 cloud ERP system and provides businesses with a complete suite of integrated applications that they can use to run their entire business in the cloud. This includes applications for financials, CRM, eCommerce, inventory and order management, and much more.
If you’d like to find out more about how TeamBlueSky and NetSuite can help your business to easily comply with the Payment Times Reporting Scheme, contact us today.
