30 October 2019
Ombudsman launches Review of Supply Chain Financing
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has launched a review of the impact supply chain finance has on the small business and family enterprise sector.
The review will examine the ways in which small and family businesses can use supply chain financing to manage cash flow and fund growth.
It will also look at the products being used by big business to offset extended payment times.
“Supply chain finance is a legitimate and effective tool to free-up cash flow for small and family businesses,” Ms Carnell says.
“However, it is totally unacceptable for big businesses to use supply chain financing arrangements as a replacement for reasonable payment terms being offered, 30 days or less from invoice.
“This review will provide a clearer picture on the range of supply chain finance options available on the market and which industries are using these products.
“More large businesses are offering supply chain finance to small businesses and we are keen to find out what’s driving that.
“The review will investigate whether supply chain finance is being used by big business as a means to stretch out formal payment terms and as a strategy to manipulate the reporting of working capital and cash reserves.”
Small businesses and family enterprises who have had experience with supply chain financing can contribute to the Ombudsman’s review via firstname.lastname@example.org
An interim report is expected to be released by the Ombudsman in March 2020, followed by a full report by the end of April 2020.