01/04/2014 - 17:30

One in 10 govt invoices paid late

01/04/2014 - 17:30

Bookmark

Save articles for future reference.

A report by the Auditor General has found one in 10 government agency invoices were paid later than the required 30 day period, raising concerns of further pressure on small businesses.

One in 10 govt invoices paid late
Auditor General Colin Murphy.

A report by the Auditor General has found one in 10 government agency invoices were paid later than the required 30 day period, raising concerns of further pressure on small businesses.

The Office of the Auditor General took a sample of 570 commercial payments at 10 state government agencies to determine whether invoices were being paid in a timely manner.

It found that 10 per cent of the invoices reviewed were not paid within 30 days, with 2 per cent of payments taking longer than 60 days.

The longest overdue payment was 197 days overdue.

While the results are an improvement on the last audit in 2007, when 14 per cent of sampled invoices were paid late, the Office of the Auditor General said agencies could make further advances if they improved their procedures and controls.

Payment within 30 days of receipt of an invoice or receiving the goods or services is mandated under a Treasurer's Instruction issued in 2006.

Labor spokesperson for small business Kate Doust said many of the affected companies were small businesses which could ill-afford late payments.

"Small businesses expect that government agencies will lead by example and ensure they pay their invoices in a timely manner," she said.

"Many are small, family-run businesses who rely on these payments and failure to pay on time can put enormous pressure on budgets."

Ms Doust took aim at Small Business Minister Joe Francis, who pledged last year to "go into battle" for small businesses if government agencies did not pay their bills on time.

"Mr Francis' promise to stand up for WA small businesses has proven to be nothing but an empty promise," she said.

"The minister gave an undertaking that he would address this issue yet today's report confirms he has failed to back up his tough talk with action."

The worst performing agency was the Department of Water, which paid 20 per cent of its sampled invoices late.

The Disability Services Commission, the Mental Health Commission and the Small Business Development Corporation were also identified as poor performers.

The Office of the Auditor General said agencies should regularly monitor unpaid invoices for amounts which may be close to becoming overdue.

It said discounts for early payments were not often offered to government agencies but were taken up when available.

A study of invoice payments in the private sector by Dun & Bradstreet found that Western Australian businesses took an average of 50 days to pay their invoices in the fourth quarter of 2013, a faster turnaround than the national average of 53 days.

Forestry and mining sector businesses were the slowest to settle their accounts while fishing, agriculture, transportation, and services businesses were the fastest.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options