For most reporting entities, the upcoming reporting deadline, 30 September 2022, will be the third round of reporting. Whilst the first 12 months of the scheme provided a transition period allowing time for reporting entities to understand and establish processes and procedures to meet regulatory requirements, a court could now impose civil penalties for non-compliance.
Therefore, this upcoming round, there is more pressure on the responsible member of each reporting entity – most commonly, a Board representative – to submit a publicly available report that is accurate and adheres to regulatory requirements.
Client experience has shown three main areas of concern:
- Eligible Reporting Entities
- Standard Payment Terms
- Inclusion and Exclusion of Invoices
Eligible Reporting Entities
For entities who have reported in the previous two reporting periods, the process of determining reporting eligibility may be simple. However, by undertaking an organisational structure review exercise, our team have provided clients with clarity in identifying and confirming the relevant reporting entities. Things to think about include: Did the total income of any other entities in the group exceed $10m in the most recent financial year? If the controlling corporation does not transact, what should you report? Have all member entities who do meet the eligibility requirements been reporting?
Standard Payment Terms
Standard payment terms vary for each business and their reporting entities. It is important for reporting entities to understand what their standard payment terms are, and how to correctly respond to the questions in the reporting template about standard payment terms. These questions can be difficult to address, especially when the reporting entity does not have a list of payment options to offer small businesses. Our team has assisted clients in providing support and guidance with identifying a reporting entity’s standard payment terms, and how to best address this section of the reporting template where there are no standard payment terms in place.
Inclusion and exclusion of invoices
The process of identifying small business suppliers using the SBI tool may seem straightforward. However, once small business suppliers are identified, deciphering which supplier invoices to include and exclude from the payment times calculations can be challenging. Our team have analysed client’s payment data, and provided quality assurance reviews to confirm that the calculations are accurate or identify where improvements and adjustments are to be made.
At Grant Thornton, our payment times reporting offering is extensive. We help businesses set up templates and processes to streamline the reporting process. We also ask the questions reporting entities may have overlooked and provide quality assurance reviews to ensure the responsible member is comfortable with the reports their entities are submitting.
If you are concerned about the upcoming reporting period and the civil penalties now in place, or if you would like our help to carry out a quality assurance review on your PTR preparation and submission processes, please contact our team.