The Payment Times Reporting Scheme (the Scheme) has increased in complexity with the introduction of the Payment Times Reporting Amendment Act 2024 (the Amendment Act). Ongoing trust in your preparation and metrics is crucial. With the public disclosure of payment times reporting metrics, the naming of slow and fast small business payers and financial penalties for false or misleading metrics, it is important to have confidence in your approach, data, and metrics. Compliance and reputational risk can be at stake, so it is important to get it right.
Combining the subject matter and regulatory expertise of our Payment Times Reporting specialists with our tech-enabled solutions, KPMG offers a leading formula for Payment Times Reporting.
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Fulfilling your obligations under the Payment Times Reporting Scheme can be complex. When faced with a non-compliance notice or a Payment Times Reporting Regulator audit, you may need assistance to guide you through the requirements. KPMG’s Payment Times Reporting team can help.
KPMG combines specialist knowledge with practical insights to help you understand and comply with regulatory changes and updates to the Payment Times Reporting scheme.
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Payment Times Reporting:
what you need to know
The new Payment Times Reporting Act is much more complex to implement and comply with than many organisations might expect.
The Scheme was introduced from 1 January 2021 as a key part of the Federal Government's commitment to improving cash flow and liquidity for Australian small businesses. The Scheme aims to increase transparency over the conduct of large businesses with regards to payments to small business suppliers.
Reforms to the Scheme were enacted under the Payment Times Reporting Amendment Act 2024 and apply to reporting periods from 1 July 2024. The Amendment Act overhauls the Payment Times Reporting Act 2020 and introduces significant changes to the content of reports and requirements for entities subject to the scheme.
Businesses should be aware that under these changes:
- Groups will now be required to assess their requirement to report by identifying if their consolidated accounting revenue exceeds $100m.
- Groups will be required to produce one consolidated payment times report every 6 months, instead of the entity-by-entity approach under the Payment Times Reporting Act 2020.
- The slowest 20 percent of small business payers may be identified as a “Slow Business Payer” and forced to publish this designation on their website and other documentation.
- A list of ‘fast small business payers’ (who pay 95 percent of small business suppliers in 20 days or less) may be published by the Regulator.
As outlined above, the changes introduced by the Payment Times Reporting Amendment Act 2024 are significant and will have numerous implications for reporting for all reporting entities. In essence, the reporting outputs under the original Payment Times Reporting Act 2020 will not be sufficient to comply with the new requirements imposed by the Amendment Act.
Whilst the breadth of changes needed to reporting is extensive, some of the initial areas to start considering include the following:
- Groups that have been reporting as multiple entities should take time to understand the Amendment Act, and the changes that will be required to their payment times report disclosures and preparation activities.
- Groups which have foreign controlled entities should review whether these foreign entities should be included when assessing the $100 million threshold, and whether the payment data of controlled foreign entities needs to be included or excluded from the consolidated payment times report.
- Reporting entities should review their current ERP systems and PTRS data points to understand what additional information is required (especially from new entities within the Group) and the accuracy of this information.
- Reporting entities should begin to assess their current position against the slowest 20% of small business payers in their ANZSIC Division, and understand what improvements are required to their supplier contracting and payment practices if they are at risk of receiving a small business payer direction.
This will ensure the preparation of the payment times report is in line with the Amendment Act and the latest Regulator’s guidance, and that businesses are ready in the event of any review or audit by the Regulator.
Navigating the complexities of the payment times reporting legislation can be challenging for entities subject to the Scheme. KPMG offers a range of time saving options to help you gain a better understanding of your obligations and support you on your ongoing PTRS journey.
If you receive a notice of non-compliance from the Payment Times Reporting Regulator, you must take immediate action. The Regulator can issue non-compliance letters, publicly name non-compliant businesses, and impose infringement notices. Failure to act can lead to financial penalties and reputational damage. Our Payment Times specialists can assess your situation and help you respond to the Regulator effectively and in a timely manner.
Reporting entities are required to lodge a payment times reporting submission every 6 months. They will then have 3 months to prepare and lodge their report to the Regulator via the Payment Times Reporting Scheme online portal.
For most Australian businesses with either a 30 June or 31 December year end, the relevant submission deadlines are 31 March and 30 September. The lodgement date for the first report under the new rules has been extended to 30 June 2025 for any reporting entities with a December or June year end.
The lodgement date for the first report under the Payment Times Reporting Amendment Act has been extended by 3 months from 31 March 2025 to 30 June 2025 for any reporting entities with a December or June year end.
Given the Payment Times Reporting Regulator (the Regulator) continues to have significant power under the Amendment Act and penalties remain in force (300 penalty units for failure to report and 0.6% of an entity’s total income for misleading submissions), we recommend entities undertake a review to understand the impact of the changes and to confirm its payment times reporting policies and practices are updated to reflect the Amendment Act. It is important to evaluate your reporting obligations and identify risks before fines occur.
The most up-to-date Payment Times Reporting guidance materials, templates, and compliance instructions are available on the official Payment Times Reporting Scheme website. We have also included some more useful links below: