New mandatory reporting under the Payment Times Reporting Bill

In amongst global pandemics and endless waves of fiscal support to ease the impact of COVID-19, you could be forgiven for thinking that there wasn’t enough happening in 2021 to shake up business and financial reporting.

As of 1 January 2021, however, some larger businesses now find themselves staring down the barrel of yet another mandatory reporting framework – this time targeting the transparency of their accounts payable turnaround times when interacting with small businesses.


New reporting framework for large enterprises

The Payment Times Reporting Bill 2020 is likely to have slipped under everyone’s radar this year, but for entities with a 30 June year end, time is of the essence to ensure that businesses understand the context of this Bill and what financial reporting systems will need to be reviewed or enhanced to ensure compliance by the first reporting deadline of 30 September 2021.

The Payment Times Reporting Bill seeks to provide better transparency to SMEs seeking to conduct business with larger enterprises, allowing them a better understanding of the payment terms and practices of potential large business customers, to allow them to be better informed about the organisations they propose to do business with.

A study undertaken by AlphaBeta in 2019 highlighted that invoices 30 days and older take an average of 63 days to be paid to small businesses, and that this accounts for more than a third of all invoices issued by small businesses, equating to some $77 billion dollars’ worth of late and overdue payments.

These reports will be published on a public website, the Payment Times Reports Register, allowing small businesses to make more informed decisions about which large businesses they will supply to.

The hope is that this new reporting framework will create incentives for large businesses to improve these payment practices.

Which entities will be required to report?

Large businesses who are constitutionally covered, carry on an enterprise in Australia, and have annual turnover of over $100 million are required to submit a report on their payment terms and practices bi-annually.

A “constitutionally covered” entity includes:

  • Private and public companies covered by a constitution
  • Sole traders
  • Partnerships
  • Trusts
  • Joint Ventures
  • Foreign entities carrying on enterprise in Australia
  • Body Corporates
  • Commonwealth corporate entities or Commonwealth companies.

Not-for-profit entities registered with the Australian Charities and Not-for-profits Commission Act 2012 are exempt from the Scheme.

Entities with less than $100 million annual turnover will also be included in this reporting framework if they are either:

  • a controlling corporation – the combined total income for all members of the controlling corporation’s group being more than $100 million; or
  • an entity being a member of the group of a controlling corporation noted above, and having individual member total annual income of at least $10 million.

Entities not covered by any of the above definitions may report on a voluntary basis.

Total income will have same meaning as in section 3C of the Taxation Administration Act 1953. Total income refers to the income reported in an entity’s tax return, or what would be reported if the entity were required to lodge a tax return but currently does not. It is a gross revenue figure and may include exempt income, other non-assessable income and foreign source income.

An example of the turnover test that applies to a Controlling Corporation Group is set out below:

Xanadu Corporation is a controlling corporation. It has four members. The total of the group’s income is $183 million. All members carry on an enterprise within Australia.

Xanadu, Alpha and Beta are reporting entities, because the combined total income of the group is $183 million, and each entity has total individual income above $10 million. They will all have to submit their own separate Payment Times Report.

Charlie and Delta have total income of less than $10 million and are therefore not reporting entities and do not need to submit a Payment Times Report.

It should also be noted that a Controlling Corporation must be an entity incorporated in Australia, such that if a global group is headed up by a foreign entity and only a subsidiary entity is incorporated in Australia, or a foreign subsidiary which carries on business in Australia, it is only that Australian-based entity that will be individually assessed for turnover purposes as to whether it is required to report.

An entity will cease to be a reporting entity if it does not meet the relevant thresholds for two consecutive income years. The requirement that income must fall below the threshold for both of the two most recent income years (as opposed to only the most recent income year) is intended to provide certainty and alleviate the administrative burden that would arise from entities regularly entering and exiting the Scheme should their income fluctuate around either the $100 million or $10 million thresholds.

What needs to be reported?

Only payments made to Small Businesses need to be reported. Small Businesses will take its definition based on current tax legislation, being businesses with annual turnover of less than $10 million.

The Payment Times Report will include the following key information:

  • basic information regarding the entity’s ABN and main businesses activities in accordance with their ANZSIC code.
  • details of the shortest and longest standard payment periods offered, as well any changes to these standard periods.
  • state the proportion and value of small business invoices paid by the entity between certain ranges of time, including invoices paid within 20 days after the day the small business invoice was issued, between 21 and 30 days, between 31 and 60 days, between 61 and 90 days, between 91 and 120 days and invoices paid more than 120 days.
  • state the proportion, determined by total value, of all procurement by the entity that was procurement from small business suppliers.
  • details of the principal governing body, and whether the entity is a member of a controlling group
  • information relating to the entity’s payment terms or practices, including supply chain financing or payment discounts to small business suppliers.

The report must also include a declaration by the responsible member (principal, trustee, director, etc.) that the report has been provided to the principal governing body i.e. the board. Visibility of reports at this level of seniority recognises the importance of ensuring that reporting accurately on payment times and practices is given sufficient regard within the organisation.

The report will be required to be submitted to the Regulator within three months of the end of the bi-annual reporting period. For those businesses with a 30 June year end, this first reporting deadline will be 30 September 2021. For businesses with alternative substituted accounting periods, it will be twice annually on the 6- and 12-month periods there ending.

Identification of Small Business Customers

The new reporting requirements specify that only payments and procurements from Small Businesses need to be reported.

This will be supported by a Payment Times Reporting Small Business Identification Tool to assist reporting entities in identifying their small business suppliers. The small business identification tool will be the only way to identify small businesses, and small businesses will have the ability to opt out of being identified by the tool.

As part of the tool, a large business will be able to enter identifying information about their suppliers, with the tool returning a negative result for suppliers that are large or medium businesses. Businesses with be able to complete a bulk search of their suppliers ABNs in CSV format to speed up this identification process.

The SBI Tool does not include any detailed information on small businesses. It simply works as a ‘negative screen’ for small businesses, so those not listed will be the small business suppliers which are in-scope of the payment times reporting obligation.

The Small Business Identification Tool is available via the Payment Times Reporting Portal.

Penalties for non-compliance

The penalties for late or non-compliance are hefty. Entities which fail to provide a report, who do not maintain the required payment records, or provide false and misleading information may contravene a civil penalty provision.

The regulator will have powers to monitor the compliance of reporting entities, investigate suspected non-compliance, issue infringement notices for breaches, and apply to a court to impose civil penalty orders against non-complying entities.

Maximum civil penalties can be applied for non-compliance under the Payment Times Reporting Scheme. As of 1 July 2020, a penalty unit equals $222.

Nature of contraventionMaximum penalties
Failure to report
60 penalty units for an individual - $13,320

300 penalty units for incorporated entities, partnerships, trusts - $66,600 (can be applied per day of non-compliance from the end of the three-month lodgement period of the report)
False or misleading reports350 penalty units for an individual - $77,700

0.6 per cent of the total income year in which the contravention occurred for incorporated entities, partnerships, trusts
Failure to keep records200 penalty units for an individual - $44,400

0.2 per cent of the total income for the income year in which the contravention occurred for incorporated entities, partnerships, trusts
Failure to comply with audit notice 60 penalty units for an individual - $13,320

200 penalty units for incorporated entities, partnerships, trusts - $44,400 (can be applied per day of non-compliance)
Failure to reasonably assist the auditor200 penalty units for an individual - $44,400

0.2 per cent of the total income for the income year in which the contravention occurred for incorporated entities, partnerships, trusts

The Regulator can also require the entity to appoint an auditor if it reasonably suspects that the entity has contravened the Act. In these circumstances the entity will have the ability to appoint the auditor, but it must be approved by the Regulator, otherwise the regulator will appoint an auditor on the entity’s behalf. It will be the onus of the entity to bear the costs of any such an audit, and to ensure that the entity provides reasonable access, facilities and assistance to the auditor during this process, or be subject to further civic penalties.

Implementation and access

Submission of Payment Times Reporting will be done through their online portal, which will contain further information and guidance material for entities to assist them navigate the portal and lodge their reports.

The first reports will be due from 1 July 2021. It must be submitted to the Regulator within three months of the end of the reporting period. The first reporting period for large businesses with common income years (e.g. Australian financial year or calendar year) will be 1 January 2021 to 30 June 2021. The first lodgement of the Payment Times Report due by 30 September 2021.

All details submitted via the Payment Times Register will be publicly accessible via

Businesses who currently use myGov ID for other government services and reporting can also use myGov to log in and report their details as required. Businesses who have yet to engage with online government services will need to set up their myGov ID for the principal business owner and then assign any rights to other personnel within their business or tax advisors through the Relationship Access Manager authority.

More information on setting up myGov and using RAM can be found here:

It has also been confirmed that no compliance and enforcement powers will be imposed by the Regulator for the first 12 months that the reporting framework is in place, in order to allow for entities to become familiar with the scheme and transition their information reporting systems to comply. This transition period will end December 2021.

Preparing for the Payment Times Reporting Scheme – First Reporting 1 January – 30 June 2021

We recommend that businesses to review whether they will be considered a constitutionally covered entity, and which if any of their subsidiaries may also be impacted by the new reporting rules.

Critically for those entities that will have a requirement to report, will be a review of existing financial and information system to identify whether the necessary payment terms information can be extracted for inclusion in the report.

For some businesses, this may flag a need to upgrade existing systems to be able to efficiently extract and report the required information, noting that the first reporting period will cover 1 January 2021 to 30 June 2021 payment terms details.

Businesses will have access to the full portal, including report submissions, and the first reports will be made publicly accessible after July 2021.

Some businesses have already been contacted but if you think you are covered under the scheme and have not been contacted or need to register, you can do so via the PTRS Website.

Further information

For the latest updates on the Payment Times Reporting Scheme, refer to the website:

For further information or assistance regarding your mandatory reporting obligations and the Payment Times Reporting Scheme, please contact your Bentleys advisor.

Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

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