Small Business Commissioner pressures government departments to pay SMEs promptly
Australia's Small Business Commissioner is putting pressure on government departments and agencies to settle accounts with small business suppliers promptly.
In a speech to the NSW Business Chamber, Commissioner Mark Brennan identified cashflow problems as one of small businesses' main gripes.
"I think all small businesses would agree with me that cashflow is a key challenge for them," Brennan said.
"They can't get people to pay them or pay them on time and then they're under pressure to pay someone else. This is an area where the government and big businesses can lead the way by paying accounts promptly."
Brennan told the lunch he was looking for businesses to assist in identifying the characteristics of a best practice business that can be implemented across all levels of government.
"Some that spring to mind include paying bills on time, early resolution of disputes and doing business with businesses that share the same values," he says.
Brennan told SmartCompany the Australian Taxation Office is one of the agencies he is looking at, but his focus is on all government agencies, not just the ATO.
"I encourage all government agencies to pay their bills promptly and would like to see this policy introduced at all levels of government," he says.
"This is the case in NSW, Victoria and the Commonwealth, who all have prompt payment policies in place across their government agencies."
The second key area for small business highlighted by Brennan in his speech to the Chamber of Commerce was developing management skills.
Brennan admitted when he raises this "small businesses look at me rather vacantly, as if to say: What would you know?"
But Brennan says getting the right skills to manage their business is "a massive problem" for small businesses.
"I would like to see small businesses work smarter and to get better at operating their business," he says.
"You see examples of people who are very enthusiastic when they go into business and who are prepared to work 100-plus hours a week, but they haven't gone about their planning properly."
Brennan warned that bad management habits were easy to fall into and difficult to stop.
"If you start out being a bad business operator and practise being bad for 100-plus hours, you're going to get better at being bad."
This story first appeared on SmartCompany.