As the second reporting cycle under the amended Payment Times Reporting Scheme draws to a close, businesses face a critical window to address their payment practices to ensure they are not part of the slowest small business payers for two consecutive periods. This cycle—covering reporting periods ending between July and December 2025—will be the final opportunity for businesses to improve their small business payment times performance.
Why does this matter?
Businesses will have until 31 December 2025 at the latest to rectify their small business payment times performance to avoid potential consequences for being a ‘slow small business payer’ for two consecutive periods under the amended Payment Times Reporting (PTR) Scheme, if they were a slow small business payer for their first reporting period or if they failed to file their first report.
Under the amended scheme, the Minister has the power to issue a direction to a ‘slow small business payer’, requiring it to make disclosure that it is a slow small business payer and disclosure about its payment times on its company website, statutory financial statements and in procurement, ESG related, and other documents. This can apply to a business if:
- it is a slow payer for two consecutive reporting cycles, or
- it is a slow payer for one reporting cycle and fails to submit a report in the period before or after.
A business will be a ‘slow small business payer’ if it ranks within the slowest 20% of small business payers, by reference to its 95th percentile payment time (further details are below).
Most large business have PTR reporting periods ending June and December and therefore should have completed their first report for 6-month period ended 30 June 2025. If these businesses were a slow payer in their first reporting cycle (or failed to report), they have only until 31 December 2025 to rectify their payment times performance to improve their ranking for their second reporting cycle. If not, these businesses face the risk of receiving a Ministerial direction with likely reputational and commercial consequences.
Why should businesses act now?
Under the amended PTR Scheme, businesses will be ranked on whether they are slow small business payers for two consecutive periods, based on the first and second reporting cycles below:
First reporting cycle for ranking (covering reporting periods ended between |
Second reporting cycle for ranking (covering reporting periods ended between |
|
| Businesses with June/December year-end | Period 1 Jan 2025 to 30 Jun 2025 |
Period 1 Jul 2025 to 31 Dec 2025 |
| Businesses with other year-ends | First 6-month period ending between |
6-month period ending between |
| Example: 31 March year-end business | Period 1 Oct 2024 to 31 Mar 2025 |
Period 1 Apr 2024 to 30 Sep 2025 |
In summary, businesses will be ranked against each other within reporting cycles. This enables, for example, a June year end client to be ranked against a March year end client.
Based on the above, the first two reporting periods for some businesses will already have passed (for example, businesses with a 31 January or 31 July year), even if they have not yet lodged their second PTR report under the amended scheme. These businesses will not have an opportunity to improve their payments times at this point, and may already be at risk if they are within the slowest 20% of small business payers for both their periods.
June and December year end businesses have just over 4 months remaining until the end of their second reporting period on 31 December 2025 (even though their lodgment due date is 31 March 2026). These businesses have a limited window of opportunity to improve their payment times. Although these businesses may be concentrating on preparing their June period reports (due 30 September), they should act now to determine if improvements to payment times are required before 31 December 2025.
Businesses should therefore act now to determine:
- whether they are likely to be in the slowest 20% for their first report
- what time they have left (if any) to implement changes to improve payment times for their second reporting period; and
- how to adjust their payment times and payment terms in the right way to improve their ranking.
If you are concerned about where your business may rank and want to understand how to best improve your payment times ranking, PwC can assist. Please continue reading on.
How is a slow small business payer identified?
A business is determined to be a slow small business payer if, for a reporting cycle, it was within:
- the slowest 20% of small business payers for that reporting cycle; or
- the slowest 20% of small business payers in a Division of the Australian and New Zealand Standard Industrial Classification for that reporting cycle.
The ranking is based on the ‘95th percentile payment time’ for that business as compared to others. This equates to the number of days it took the business to pay 95% of its slow small business payments, measured in days (i.e. A business disregards its slowest 5% of small business payments, then determine how many days it took to pay the next slowest small business payment).
A safe harbour exists under the amended scheme where a business cannot be classified as a slow small business payer if its 95th percentile payment time is under 30 days.
Can you tell if you were in the slowest 20% in cycle one?
Not immediately. Businesses can only confirm their ranking after all reporting entities for cycle one (covering periods ending January to June 2025) have submitted their reports and after these are published by the Regulator.
The last of these cycle one reports is due 30 September 2025 (plus possible 28-day extensions and delay in the Regulator’s publication), meaning that real rankings may not be clear until December 2025, which is too late to make changes for the second cycle.
However, early indications can be drawn from already published reports.
PwC is able to advise clients on where their estimated rankings currently stand based on their most recent lodged report (further details are set out below).
How can I improve my ranking?
Because the ‘slowest 20%’ is based on the 95th percentile payment time, small delays with a limited number of suppliers can disproportionately affect your ranking. Targeted improvements often work best, such as:
- Pinpointing late-payment outliers and addressing process bottlenecks.
- Prioritising suppliers with the biggest impact on your 95th percentile payment time.
- Modelling changes to identify the smallest adjustments needed for the greatest improvement.
This focused approach can lift your ranking faster, with less strain on cash flow, than broad, across-the-board changes.
By analysing your data, PwC can advise clients on strategic areas to focus to improve your ranking (further details are set out below).
How PwC can help you
Benchmarking
PwC benchmarks clients’ payment performance against all other reporting businesses and industry peers based on available Regulator-published data—providing early warning signs and targeted improvement opportunities to your ranking.
We can provide you with an estimate of your ranking, and a list of your peers and where they rank, giving you insight into where you stand and whether you are likely to be at risk of being in the slowest 20% of small business payers.
Slow payments analytics
Using our interactive analytics dashboard, PwC can help pinpoint the factors most affecting a client’s 95th percentile payment time. We can assist in identifying the top suppliers, processes, or categories comprising your slowest payments, and highlight strategically areas where improvements can be made including which vendors to address, and what total dollar payments would be involved. Businesses can then focus their efforts on changes that improve rankings efficiently and sustainably.
PwC’s analytics dashboard can also progress tracking between submissions, helping confirm whether implemented strategies are delivering the intended results.
Streamline the reporting process
Our Payment Times Reporting Solution automates the full PTR reporting workflow, from data extraction and transformation through to final report generation. Combined with our team of technical experts, we can assist you to reduce manual effort, minimise compliance risk, and free your teams to focus on improvement initiatives, while ensuring your calculations are in line with the specific requirements of the amended scheme.
By combining insight, analytics, and automation, PwC helps clients not only meet their reporting obligations but also strengthen supplier relationships, protect their reputation, and maintain a competitive position in the market.
Contact us
Sean Lee
Partner, Tax Reporting and Innovation, PwC Australia
Nirmal Singh
Senior Manager, PwC Australia
Zac Yang
Tax, Senior Manager, PwC Australia
Yasmin Steele
Senior Associate, PwC Australia
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