Payment policy FAQ

Frequently Asked Questions on how the Department of Finance and Services is applying the 30-day payment policy for small businesses.

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What is covered by the payment of accounts policy for small business?

DEC Corporate and TAFE NSW are required to pay small businesses within 30 days of receipt of a correctly rendered invoice received on or after 14 July 2011 for goods or services. The exemption for NSW Government Schools from the terms of the NSW Treasury Circular 11/12 will be removed as school accounts are paid centrally.

Payments to small businesses are to be made within 30 calendar days. 

  • Where existing contracts have longer payment terms, the department endeavours to pay small business suppliers within 30 days, where possible. 
  • The above requirements, however, do not apply where there is an existing contract or standing offer (ie pre 14 July 2011) which provides for an alternative time period/interest requirements.

How do you define a small business

A small business is an Australian or New Zealand-based firm that has an annual turnover of under $2 million in the latest financial year.

What is a correctly rendered invoice?

The department has criteria for a correctly rendered invoice. The invoice should be:

  • tax compliant
  • displaying correctly calculated amounts
  • quoting a valid departmental purchase order number. Purchase order numbers commence with a '4' and ten digits in length.
  • sent directly to one of the following address:

Department of Education and Communities
Accounts Payable - Shared Service Centre
GPO Box 4037
SYDNEY NSW 2001

Or
Technical & Further Education Commission
Accounts Payable – Shared Service Centre
GPO Box 4037
SYDNEY  NSW  2001

Or
NSW Government Schools
Accounts Payable – Shared Service Centre
GPO Box 4037
SYDNEY  NSW  2001

How does the Department of Education and Communities know that an invoice is from a small business?

The department website provides a suppliers with details of how to register as a small business. This involves downloading and completing a form which is to be submitted via email or fax, along with the requisite supporting documentation (see question 5 for more detail).

How does the Department of Education and Communities verify that a supplier is a small business?

The department accepts the following as proof of small business status:

  • BAS return for most recent financial year; or
  • Statutory Declaration; or
  • Letter from a supplier's accountant.

How does the Department of Education and Communities know whether a supplier's small business status changes?

Once a vendor is registered with the department as a small business supplier, the department will exercise discretion in asking suppliers to update their supporting documentation.

Can payment terms be more than 30 days?

Only where there is contractual agreement in place that stipulates alternative terms.

Will the Department of Education and Communities pay small businesses within 30 calendar days or 30 business days?

Payments to small businesses are to be made within 30 calendar days from date of receipt of a correctly rendered invoice.

How is interest for late payment initiated?

Interest will be automatically calculated by the department and the interest payment made where payment has not been made within 30 days of receipt of a correctly rendered invoice, only where the interest chargeable exceeds AUD$20.

How is interest for late payments calculated?

The interest rate is determined under section 22 of the Taxation Administration Act 1996. This is available from the NSW Office of State Revenue website.

What happens if the supplier issues an invoice but the goods or services have not been delivered or do not meet the requirements of the written contract?

If this happens, the invoice will not meet the definition of a 'correctly rendered invoice'. The requirement to pay invoices within 30 days and to pay interest on overdue amounts arises only when a 'correctly rendered invoice' has been received.

Is there a dispute resolution process?

Yes.  Any disputes or complaints will need to first be raised with the departmental Accounts Complaints Officer.

  • The department's accounts complaints officer can be contacted on 1300 338 772.
  • The department's accounts complaints officer will refer small businesses dissatisfied with any aspect of the departmental approach to 30-day-payment terms for small business to the Small Business Commissioner, Department of Trade and Investment, Regional Infrastructure and Services.
  • Inquiries regarding the Small Business Commissioner should be addressed in the first instance to the Department of Trade and Investment, Regional Infrastructure and Services on (02) 9338 6900.

The Department of Finance and Service is committed to paying all suppliers (i.e. other than small businesses) within 30 days in accordance with government policy.

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