The Business Council of Australia has created a list of businesses committed to doing things right and getting their suppliers paid on time. Every business should be involved, writes Ailsa Page.The easy flow of money between businesses is not just good for those businesses; it’s good for the economy.
I also think it sets a good example as a business if you treat other businesses in the way you’d like to be treated.
So paying promptly without fuss is not only vital in a commercial sense, but it can make also make the difference when it comes to who people choose to work with.
I’m not the only one who thinks this way. In fact, a group of business leaders got together a couple of years ago and developed a code around paying small businesses promptly.
The initiative is called the Australian Supplier Payment Code (ASPC) and it’s made business news headlines over the past few years as an increasing number of signatories have climbed aboard (most recently, when Coles signed on in February this year).
There are also some great benefits for you as a business in signing up to the code as well as using the code. Here’s a brief explainer to summarise it all.
This is a voluntary national code of fair payment from businesses to their small business suppliers.
Many of the businesses that have signed up are large, but there’s nothing preventing smaller businesses and even not-for-profit organisations from participating.
The ASPC is administered by the Business Council of Australia and came into effect on the 1 July 2017.
A big issue for small business is cash flow and one of the greatest threats to the success of small business is late payment from other businesses.
In some situations, small businesses were not being paid for 120 days which puts enormous pressure on them and impacts on their ability to survive.
As a response to this issue, The Australian Business Council developed the Australian Supplier Payment Code as way of trying to change business payment practises in Australia.
According to the ASPC website: ‘Trade between small, medium and large businesses is valued around $500 billion per year, so the whole country benefits when we work together more productively.’
The code is a voluntary commitment and relies on self-enforcement by the signatory to the code. It’s not a prescribed code and is therefore not enforceable by the ACCC.
The code does require signatories to establish a process for resolving disputes and complaints with their suppliers. It also requires signatories to publish, in an easily accessible location, the policies and practices the company has in place to comply with the code.
Further, it also requires signatories to pay small business suppliers within 30 days of a receipt of a correct invoice, along with several other related commitments.
The names of the businesses that have signed up to the code so far are available online, and that acts as a good bit of social proof. After all, it would be bad PR not to follow through with such a solemn commitment.
The main aim of the code is to improve payment practises to small business.
We’ve all heard how cash flow is king. Well, you now have a list of businesses who are committed to paying within 30 days. You have a guarantee that businesses who have signed up to the code will pay you in a timely manner as made clear on their website. If they don’t you can remind them of their public declaration and there will have clear guidelines around disputes that can be followed.
Over 100 companies and government organisations have signed up, including the likes of MYOB, Bunnings Warehouse and Mirvac. Other medium and small businesses have as well.
As a company, I’ve just signed up myself, as it’s something I’m passionate about. I’m now even more vigilant to ensure I pay suppliers on or before time, as it’s now a reputation issue.
You get your logo and a link to your website promoted. You also get mentioned on the Business Council of Australia social media feeds, so it’s not such a bad bit of free marketing for doing the right thing.
You could even consider using the news that you’ve signed the ASPC as an item in your own newsletters or social media posts, as it can be a used as a point of difference against competitors or as social proof of your ethics.
You reduce your stress knowing that the transaction has been completed. It brings goodwill and can categorise you as a good customer. Also, you don’t incur any fees or late charges. What’s not to love?
You can sign up as a business and find out more information here.
Getting paid on time means you can afford to pass on the favour. Just like the ASPC, MYOB aims to achieve exactly that. MYOB Essentials has everything you need to quote, invoice and send reminders to make sure your cash keeps flowing. Start a FREE 30-day trial today.