MYOB applauded the announcement, saying it was a step in the right direction.
“[We] welcome this much-needed inquiry into late payments by the Small Business and Family Enterprise Ombudsman. We know that late payments are an ongoing pain point for SMEs around the country,” CEO Tim Reed said.
“MYOB’s latest SME October Snapshot showed that more than three quarters of SMEs were impacted by customers not paying their bills on time. As small business Ombudsman, Kate Carnell rightly points out this can mean the difference between success and insolvency,” he said.
The impact of late payments can be life-threatening to SMEs, with MYOB saying its research found late payments impacted one in three SME owners’ personal finances and another third’s ability to cover expenses such as rent and power.
“Late payments are also hurting more than the hip pocket, with 52 per cent confirming it impacts their stress and anxiety levels. It’s clear we need to do more to support our SMEs and give them a fair go in business. SMEs shouldn’t be stymied by larger organisations not playing ball,” Mr Reed said.
With MYOB finding seven out of 10 small business owners are in favour of introducing a voluntary code to encourage businesses to pay more promptly, Mr Reed said he’s hopeful of the results of the inquiry.
“Given the overwhelming support for this initiative, it would be a positive move to see the government and big businesses put forward an initiative to implement a national prompt payment protocol, to ensure small businesses are not being delayed payments by other businesses,” he said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.