The new Payment Times Reporting Act introduced by the Federal Government is now mandatory – though compliance will only be enforced from 1 January 2022, to allow reporting entities to familiarise themselves with the new requirements.
Organisations impacted include:
- large businesses and some government enterprises with a total annual income of over $100 million
- controlling corporations where the combined total annual income for all members is more than $100 million
- businesses with a total annual income greater than $10 million – and part of a group headed by a controlling corporation with a collective income greater than $100 million
The intent of the scheme is to:
- increase transparency around large business payment performance
- help small businesses decide who to do business with
- create incentives for improved payment times and practices
- help the public make decisions about the large businesses they buy from
Legislated reporting periods
A Payment Times Report is required for each six months of the income year. Reporting periods are based on the income year (i.e. the financial year for tax purposes), commencing after 1 January 2021. If a business does not pay tax, the period is the standard financial year running from July to June. For entities with:
- standard and calendar income years, the first reporting period begins on 1 January 2021 and runs to 30 June 2021.
- income years beginning in the first half of 2021, the first reporting period begins with the start of their income year. For example, entities with an income year starting on 1 April 2021 will start their first reporting period on this date and it will run to 30 September 2021.
- income years beginning in the second half of 2021, the first reporting period begins halfway through their income year. For example, if the income year for an entity begins on 1 November 2021, their first reporting period will start on 1 May 2021.
How Pronto Software can assist
A reporting template has been made available from the Payment Times Reporting website. Pronto Software has developed a report that customers can use as a basis to meet their obligations – available for customers on Pronto Xi 730 and upwards.
To begin installation of the programs, please log a Pronto Plus support call – or contact your Pronto Software Account Manager with any further questions.
What is the consequence of non-compliance?
There are significant penalties for:
- failing to report or keep records
- 60 penalty points ($13,320) for an individual
- up to 0.2% of annual turnover (i.e up to $1million for a business with turnover of $500m)
- producing a false or misleading report
- up to 0.6% of annual turnover (i.e. up to $3million for a business with turnover of $500m)
The identity of non-compliant entities and the details of the non-compliance may also be reported publicly.