Business Impacts of the Payment Times Reporting Scheme

What is the Payment Times Reporting Scheme and how does it work?

The Payment Times Reporting Scheme (PTRS) is a voluntary scheme that enforces large businesses (over $100 million in revenue) to report on their payment times and practices with smaller vendors (under $10 million in revenue). The scheme helps to improve payment times and practices by providing information that can be used to identify problem areas and develop solutions. Businesses that are required to participate in the scheme need to report on their payment times and practices twice annually, on January 1, and July 1. The reports are then published on the PTRS website, where they can be accessed by the public.

How will the Payment Times Reporting Scheme benefit small and medium-sized businesses?

The Payment Times Reporting Scheme is an initiative that aims to help small and medium-sized businesses to get paid faster, by making the payment behaviours of their larger customers more transparent. The scheme requires large businesses to report their payment times, which will then be used for analysis and made available to the public. This will allow small businesses to make informed decisions about who they do business with. The scheme will also help to encourage large businesses to pay their suppliers on time, as they will be aware that their payment times are being closely monitored. Ultimately, the Payment Times Reporting Scheme will benefit both small businesses and the economy as a whole by helping to ensure that businesses are paid on time and increasing small business cash flow.

What are the potential drawbacks of the Payment Times Reporting Scheme?

The potential drawbacks of the Payment Times Reporting Scheme are limited. The Scheme is designed to increase transparency around payment times and improve payment practices. However, there are a number of potential concerns that have been raised by big businesses. First, the Scheme places an additional administrative burden on larger businesses. Second, the Scheme may be used by some larger businesses to unfairly advantage themselves over their competitors. Third, the Scheme may discourage businesses from offering early payment discounts or other incentives for timely payment. Fourth, the Scheme could potentially be used to pressure businesses into paying invoices more quickly than they would otherwise be comfortable with. Overall, however, the potential drawbacks of the Payment Times Reporting Scheme are outweighed by its potential benefits. The Scheme is likely to improve payment practices and increase transparency around payment times.

How can businesses prepare for the introduction of the Payment Times Reporting Scheme?

The Payment Times Reporting Scheme was introduced in Australia in 2021, and businesses need to start reporting on their payment times from July 1st 2021.

There are a few key things that businesses will need to do in order to make it easier to remain compliant with the scheme, including:

• Ensuring your accounting software is able to produce the reports that provide the right information for submission.
• Ensuring your approval processes are streamlined to avoid late payments to small and medium-sized business vendors.
• Ensure your accounts payable obligations are transparent, ensuring your team is able to meet the agreed payment terms with your suppliers.

Is your accounting software up to the challenge?

Choosing the right accounting software is critical for any business, but it’s especially important for businesses that will be required to report under the Payment Times Reporting Scheme. The right software will make it easy to generate the reports that need to be submitted and will help to ensure compliance with the scheme.

If you’re not sure whether your current software is up to the task, talk to one of TeamBlueSky's expert accountants. They’ll be able to advise you on the best software for your business, and can help you make the transition to a new system if needed.