Locally owned and independent
July 28, 2022
The Northern Rivers Times
BUSINESS 63
BIG BUSINESS NEEDS TO PAY UP More than half of the nation’s big businesses are missing their own deadlines for paying their small business suppliers, according to the latest data from the Payment Times Reporting Regulator. While there has been a marginal improvement in stated payment ambitions, actual payment performance has slipped to the point where even the mediocre 30-day payment goal has not been met, says the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson. “This is an incredibly disappointing result,” Mr Billson said. “I call on the nation’s big business to show leadership, respect and care for our small businesses and to pay their bills on time. “Small businesses are not asking to be paid early, just to be paid on
time. Put simply, good business pays.” The Payment Times Reporting Regulator has published its second report about the payment policies of 7000 businesses with an annual turnover of more than $100 million. According to the regulator’s update: “The majority of reports submitted for a second reporting period indicate that entities were not meeting their own payment terms offered to small business.” “I applaud those companies that are paying on time and particularly those who pay their small business customers in far fewer than 30 days. But this report tells us that far too many big businesses are falling well short of paying on time,” Mr Billson said. “COVID-19 has made the problem worse. Payment disputes represent 40% of
requests for assistance received by our office. Prior to COVID-19, this proportion was around 25%. About one-in-four calls for assistance to the Ombudsman centred around construction businesses and 17.5% were in the transport, postal and warehousing sector. “Cash flow is king for small and family businesses and if they are paid on time, the benefits spread through the entire economy,” Mr Billson said. “We must not forget that two out of every five people with a private sector job work in a small business.” “As COVID-19 infection rates play havoc with staffing illness and availability, more is being asked of small business and family enterprise owners and leaders as they seek to cover roster gaps and sick days amongst their
The report finds: • only 47% of big businesses paid more than 80% of their suppliers by their own agreed payment deadline. • the average contract terms for payment marginally dropped to 36.2 days, from 36.6 days. • only 31% big businesses paid more than 80% of their small business invoices within 30 days, which is the benchmark set by the Business Council of Australia. teams just to keep their doors open to serve their communities and they should not be further disadvantaged by not being paid.” The regulator’s report confirms a recent report by CreditorWatch which found the proportion of businesses with payments in arrears by 60 days or more had increased in almost every industry sector. “Good payment practices by big business contributes significantly to the
Taskforce takes further How can small businesses get through tax time? action on GST fraud Following a warning last month to come forward or face severe consequences, the ATOled Serious Financial Crime Taskforce (SFCT) has undertaken further action in respect of around 40,000 individuals suspected of being involved in a major GST fraud. Search warrants were executed this week, with the support of Australian Federal Police (AFP) and NSW Police, in relation to five suspected offenders located in Sydney as part of Operation Protego. This follows coordinated action across the country last month where raids were executed against 19 individuals suspected of being involved in this GST fraud. ATO Deputy Commissioner and Chief of the SFCT Will Day said the ATO has zero tolerance for any fraud
against Australia’s tax and super system and has a clear and deliberate strategy to identify and pursue these individuals suspected of inventing fake businesses to claim false refunds. “I need to reiterate my previous warning to those who have not already come forward, that our action this week shows there is no place to hide. We know who has lodged a BAS and who has created a fake business. If you think you won’t be caught, think again. As we continue to take action against those involved, your name could be next on our list, and you could face severe consequences, including jail,” Mr Day said. As part of Operation Protego, the SFCT is also progressively sharing information relating to all individuals identified as participating in this fraud.
Two-thirds of Australian small business leaders don’t fully understand a business tax return, according to new data from Xero, prompting a push towards expert advice. Only 34% of the 500 small businesses surveyed in the Xero Small Business Insights report understand all parts of a business tax return, with 52% not knowing what deductions they are eligible to claim. Positively, the research also found that the majority engaged with an accountant or adviser during tax time, highlighting the pivotal role they play in keeping businesses tax compliant. “For many small business owners, tax time can be stressful, and it’s often a struggle when the end of financial year approaches,” says Sid Cachuela, COO and
co-founder of SME tax accountant firm POP Business. “Knowing what a small business can claim on tax each year can be challenging if you don’t have the right support,” Sid Cachuela, COO and co-founder of POP Business. Understanding the basics as a small business owner will get you through a lot when it comes to tax. But as the data shows, many small business owners would rather be stuck in traffic than focus on their EOFY obligations. “Not everyone is going to know the basics of their tax return. You probably didn’t start your business with a red-hot passion for business administration,” says Cachuela. “Preparation is key when it comes to lodging your tax return.”
viability of the sector in which they operate and the small businesses upon which they rely,” Mr Billson said. The Business Council of Australia has recognised the critical importance of being paid on time by creating its supplier payment code urging big businesses to sign a pledge to pay small business customers and suppliers within 30 days. As the BCA itself says: “Paying small
business suppliers on time is critical to easing stress, supporting their ability to expand, keep healthy cashflows and employing more people.” Mr Billson said a great way to improve payment times is to adopt eInvoicing. “It enables more timely payment, cuts the administrative burden and is more secure than posted or emailed invoices, so it reduces the chance of invoice fraud or scams,” he said. About 1.2 billion invoices are exchanged in Australia every year but 20% are sent to the wrong person and 30% have incorrect information. It costs around $30 to process a paper invoice while an e-invoice costs less than $10.
CARBON CREDITS AMONG STAR PERFORMERS OF FY22 Carbon credits continued to outperform other assets throughout the 2022 financial year, with investors reaping the rewards of an emerging and uncorrelated asset class. Results released July 15th showed Carbon Growth Partners’ flagship investment vehicle, the Carbon Growth Opportunities Fund, recorded a 61% return to investors for the financial year to June 30. Returns were driven by continued demand for carbon credits from nature-based solutions (such as forest protection and restoration), household devices (such as clean cookstoves) and renewable energy credits. Carbon Growth Partners’ CEO Rich Gilmore attributed the result to growing intrinsic demand for carbon credits from
corporate end users: “13 million carbon credits were retired in June alone, an increase of 30% on April and May, and up almost 10% year-on-year. To achieve a growth in net emissions reductions amidst unprecedented global inflation, volatility and uncertainty is a sign that corporate commitments to net zero are highly resilient” he said. Retirements are credits that are surrendered to achieve a net emissions reduction, commonly known as a carbon offset. “This growth in retirements gives us confidence that the policy certainty provided by the Glasgow climate pact will continue to drive more, and more sustained, participation in the carbon market” said Gilmore. The value of the global ‘verified’ carbon market topped US$1 billion.
