GEA encourage business to challenge industry to pay bills within 30 days.
THE Gladstone Engineering Alliance applaud the Australian Small Business and Family Enterprise Ombudsman who announced this week a review of payment times to measure the effects of late or extended payment practices on the cash flow of small businesses in Australia.
“The GEA is a 200+ strong membership based not-for-profit organisation that represent small to medium enterprises (SMEs) working in the resources sector across central Queensland,” GEA acting Chief Executive Officer Julie Gelder said.
““There has been strong concerns from the supply chain about the adverse impact of extended payment terms on businesses who may need to carry the cost of work-in-progress for several months before receiving revenue for their work.
“The GEA appeared as a witness at a parliamentary enquiry in August where we highlighted issues surrounding 30-day payment terms and the problems that causes our members.
“The ongoing viability of businesses has been threatened by extended payment terms especially if they are unable to secure finance for their operations to cover their regular and unavoidable outlays such as wages, superannuation, and taxation payments.”
The Ombudsman in their 2017 Payment Times and Practices Inquiry found Australian payment times were the worst in the world, with invoices paid on average 26.4 days late and identified a growing trend for large Australian and multinational companies to delay and extend payments from 30 days to 45, 60, 90 or 120 days.
“Partial and late payments, seeking discounts to pay in 30 days, offering loans to cover extended terms, all place stress on the cash flow of small businesses. It forces the business to find ways to finance the short fall in their working capital,” Ms Gelder said.
“The GEA are encouraging our members and non-members to take part in the Australian Small Business and Family Enterprise Ombudsman survey to get a better idea of the state-of-play on payment times and practices in Australia.”
To take part in the 5min survey go to https://www.asbfeo.gov.au/payment-times
Picture: GEA Acting CEO Julie Gelder.