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14 August 2020

Ombudsman tells SCF providers to follow Greensill’s example

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed action taken by Greensill to cut ties with clients that have poor payment terms, calling on other supply chain finance providers to follow suit.

“Greensill has issued discontinuance notices to its supply chain finance clients who fail to comply with 30-day payment terms,” Ms Carnell.

“This is strong action taken in response to our Supply Chain Finance Review, showing that Greensill takes prompt payment times to small business seriously.

“There is no reason why other supply chain finance providers can’t do the same.

“As outlined in our Supply Chain Finance Review, we know there are large companies extending their payment terms to 60 or more days from the end of month the invoice is lodged and offering supply chain finance to those that want to be paid earlier and are willing to take a discount on the invoiced amount.

“This practice is unacceptable and harmful to small businesses, especially in the current difficult trading conditions.

“Now, more than ever before, small businesses need to be paid the full invoiced amount owed, on time. Their survival depends on it.

 “That’s why my office has recommended federal legislation requiring small businesses to be paid in 30 days. It is the only way to drive meaningful change in business payment performance across the economy.

“Greensill has shown that supply chain finance providers can lead by example by cutting off clients that fail to pay on time.

“This should be the position adopted by all supply chain finance facilitators.”