A campaign calling for all Australian businesses to pay their bills on time has been launched today by the Council of Small Business of Australia (COSBOA), find hospital the Australian Industry Group (Ai Group) and the Australian Institute of Company Directors (AICD).
Peter Strong, more about CEO, COSBOA; Innes Willox, CEO, Ai Group and John Brogden, MD and CEO, AICD, claim that Australia’s business sector has developed a culture of paying invoices well past the internationally accepted 30 day standard.
This campaign calls upon the CEOs of Australia’s major companies to take the lead and make a public statement that their company will be paying on 30 day terms by June 2018.
Mr. Strong commented that while small businesses form the backbone of the economy and are often the fountain of innovation, the lifeblood of small business is cash flow.
“Not many people are aware of how entrenched this behaviour has become in our business world. It has become increasingly more common for a 90 day payment frame to be included in B2B contracts. In some cases this has extended out as far as 120 days,” he said.
“This behaviour has even extended to the payment of individual contractors who, in some cases, are now facing 60 day payment terms. I Individual contractors, unlike B2B payments, often rely on this money to live, to pay mortgages and to put food on the table. In these instances, late payments can have a huge impact.”
The joint campaign comes as Kate Carnell, Australian Small Business and Family Enterprise Ombudsman, launches an inquiry into the payment times and practices for B2B payments.
AICD MD & CEO John Brogden said it was time to change this culture of late payment that has become predominant in Australian businesses.
”Best practice in governance demands that businesses pay on time. Without surety of cash flow it is hard for any business to achieve strong and consistent performance,” he said.
“I believe there is a common desire to fix this problem and for all Australian businesses to pay on time, every time.”
Ai Group CEO Innes Willox said the call for 30 day payment terms was also supported by Australian regulators.
"We should all be getting behind this campaign. Paying on time is the right and fair thing to do," he said.