Change is Coming: The Overhauled Payment Times Reporting Scheme!

On 3 July 2024 the Government passed the Payment Times Reporting Amendment Act 2024 (Amendment Act), marking the most significant overhaul to the Scheme since inception, following the Statutory Report last year. The Amendment Act is set to impact all reporting entities, introducing critical changes that will redefine how business report their payment times to small businesses.

When do changes take effect?

The Amendment Act comes into force on 1 January 2025. All reports submitted post this date must adhere to the new requirements. Recognising the challenges these changes may present, the Regulator has granted a once-off automatic 3-month extension to the first 30 March reporting deadline, moving it to 30 June 2025.

What’s changing?

The Amendment Act introduces several important changes, including:

1. Updated Reporting Eligibility: Large businesses with annual consolidated revenue of $100M or more must now determine their reporting requirement using accounting standards, rather than tax income. This change may result in entities within a group that previously did not meet the $10M threshold now being required to report – thereby increasing the scope of data collection and calculations.
2. Consolidated Reporting Options: Businesses now have the flexibility to report at a consolidated level, rather than the previous entity-by-entity approach. Alternatively, controlled entities with distinct governance structures may choose to report separately.
3. Adjusted Reporting Metrics: Companies are now required to report on additional metrics, including the average, median, 85th, and 95th percentiles of payment times to small businesses. These new metrics are complemented by a consolidation of the existing payment times value and volume percentage bands, along with a reduction in the overall number of reportable fields. This shift enhances transparency, demands greater precision in reporting practices, and streamlines the reporting process.
4. Detailed Transaction Audits (On Request): Entities may be required to provide detailed transaction reporting and datasets used for reporting if requested by the Regulator. This enables the Regulator with more granular oversight if and when required.
5. Enhanced Accountability Measures:

- Deterrent: The Regulator now holds the authority to identify and publicly highlight the slowest 20% of payment reporters based on the 95th percentile (Amendment Act, Section 22E) in a Division of the ANZSIC, compelling these businesses to disclose their status as slow payers on their websites, financial statements, and other public-facing documents.

- Incentive: On another note, the “fastest small business payers” will be recognised and included in a public register, showcasing their commitment to prompt payment practices.

What should you do next?

Now is the time to assess your current reporting practices to ensure they align with the new requirements. Understanding and implementing these changes ahead of the deadline is crucial to maintaining compliance, avoiding penalties and the potential brand damage of being a Slow small business payer. 

For more detailed guidance on navigating these changes, contact the Deloitte Payment Times Reporting team. Our experts are here to help you stay ahead of the curve and support your business in becoming fully prepared for the new legislation.

Learn more about our range of Services and FairPayment by Deloitte, your Payment Times Reporting solution in a box.