The Government will be consulting small business owners on approaches to improve business cash flow and business relationships.
The Government has released a discussion paper on a Prompt Payment Protocol. It is aimed at improving business-to-business relationships and tackling cash flow problems as a result of late payments.
Research has shown that 90 percent of small business failures are caused by poor cash flow. Businesses that take longer to pay their bills are also contributing to a culture of late payment that has taken hold in Australia.
The release of the discussion paper is aiming to encourage small businesses to think about their payments, and to ensure that they are making their payments on time. The protocol also hopes to encourage good payment practices between businesses.
The discussion paper outlines various steps that should underpin business-to-business account systems. Some of the proposed principles are to pay on time, to communicate clearly, to encourage good business relationship and to adopt a complaints resolution process.
The discussion paper is seeking feedback from both large and small businesses on how best to implement this new initiative across the country.
