Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Senator the Hon. Michaelia Cash
Minister for Employment, Skills, Small and Family Business
Date: Wednesday, 1 January 2020
Australian businesses will have improved cash flow and be better off under the Government’s new five-day e-Invoicing payment policy, which came into effect today.
Last year the Government announced that from 1 January 2020, federal agencies will start paying e-Invoices within five days or pay interest on any late payments.
Faster payments will help small and medium-sized businesses (SMEs) to prosper by ensuring they are paid in a timely manner as well as delivering significant benefits and efficiencies to suppliers and the Government by reducing transaction costs and handling errors.
The five-day e-Invoicing payment policy applies to contracts valued up to $1 million, where a supplier and a Commonwealth agency both use the internationally established framework for delivering and receiving invoices in an electronic form.
This change comes at a time when SMEs are supplying a greater share of goods and services to government.
The latest procurement figures revealed a 29.1 per cent increase since 2017–18 in the value of federal government contracts going to SMEs.
The overall value of small business contracts with the Federal Government has also increased from $3.3 billion in 2016–17 to $6.3 billion in 2018–19.
The Government will continue to prioritise e-Invoicing adoption across Commonwealth agencies in 2020 to deliver better outcomes for businesses and agencies alike and urges big businesses to follow its lead.
SMEs perform an important role in Australia’s economy and our Government will always consider their best interests.
More information on the new five-day payment terms for e‑Invoicing is on the Department of Finance’s website.