CEO of COSBOA Peter Strong, CEO of the AIGroup Innes Willox, and Managing Director & CEO of the AICD John Brogden said that Australia’s business sector has developed a culture of paying invoices well past the normal internationally accepted time of 30 days.
To help combat this, they are calling on the CEOs of Australia’s major companies to take the lead and make a public statement that their company will be paying on 30 day terms by June 2018.
Peter Strong said that small business may well be the backbone of the economy and the fount of innovation, but the backbone of small business is cash flow.
“Not many people are aware of how entrenched this behaviour had become in our business world. It is not uncommon for a 90 day payment time frame to be included in B2B contracts. In some cases this has extended out to 120 days,” he said.
“This behaviour has even extended to payment of individual contractors who in some cases are now facing 60 day payment terms. For an individual contractor their payment is more akin to wages than to a B2B payment, they need that money to live, to pay mortgages, to put food on the table, just to pay normal family expenses.”
The joint campaign comes as Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, launches an inquiry into the payment times and practices for B2B payments.
AICD Managing Director & CEO John Brogden said it was time to change the culture of late payment that has become predominant in Australian businesses.
”Best practice in governance demands that businesses pay on time. Without surety of cash flow it is hard for any business to achieve strong and consistent performance,” he said.
“I believe there is a common desire to fix this problem and for all Australian businesses to pay on time, all the time.”
Ai Group CEO Innes Willox said the call for 30 day payment terms was also supported by Australian regulators.
“We should all be getting behind this campaign. Paying on time is the right and fair thing to do,” he said.
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