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On 17 June 2024 the Minister for Finance, Senator Katy Gallagher, announced updates to the Commonwealth Procurement Rules (CPRs), and the introduction of the Commonwealth Supplier Code of Conduct (Code). Both the CPRs and the Code will come into effect on 1 July 2024. To support business’s preparation ahead of the effective date, information on the Code is available on the Finance website, and the Responding to an Approach to Market and If you are awarded a contract sections of the Selling to Government website. Further information on the changes to the CPRs is also available on the Finance website. Finance is updating content on the Selling to Government website to align with the updated CPRs.

When will my business get paid?

The payment terms will be contained in the contract between your business and the Australian Government organisation.

The Australian Government has a Supplier Pay on-Time or Pay Interest Policy which means that in most cases where an Australian Government organisation has acknowledged the satisfactory delivery of goods and services and receipted a correctly rendered invoice, it must pay suppliers within:

  • 5 calendar days for eligible electronic invoices (eInvoices), where the Australian Government organisation and the supplier both have eInvoicing capability via the Peppol network and have agreed to use this method of invoicing, or
  • 20 calendar days in all other circumstances unless shorter payment terms have been agreed.

If the contract allows for it, you may be paid progressively for satisfactory completion of the work. This is commonly called a milestone payment. In this case, the contract will indicate dates or work completion targets that must be met before you can submit your invoice for payment. Milestone invoices are paid under the same terms.

How will my business get paid?

The Australian Government prefers to pay by electronic funds transfer (EFT) directly to your business’ bank account.

For amounts up to $10,000, the Australian Government prefers to pay by credit card if your business offers this facility. However, it is not a requirement that your business offers credit card facilities.

Do I have to use a particular format for my invoice?

If electronic invoicing (eInvoicing) is the agreed method of invoicing between you and the procuring Australian Government organisation, you may send your invoice as an eInvoice via the Peppol network. Otherwise you can use your normal invoicing format. In both instances, the requirements for a correctly rendered invoice must be met.

It is very important to provide a correctly rendered invoice because the Australian Government’s usual payment terms only apply following the acknowledging the satisfactory delivery of the goods or services and receipt of a correctly rendered invoice. If there are errors or omissions on your invoice, your payment may be delayed.

What is a correctly rendered invoice?

A correctly rendered invoice is an invoice that is provided to the procuring Australian Government organisation in accordance with all the requirements of the written contract.

Your contract will define the specific requirements for a correctly rendered invoice and the typical inclusions are shown below. Some important things to note from the contract are the name, work title, address of the person and email address to whom you must send invoices.

The specific requirements for a correctly rendered invoice may vary a little from organisation to organisation, but will usually include the following items:

  • the identity of the supplier, such as the business name
  • the ABN of the supplier
  • the date of issue of the invoice
  • that the document is intended as a tax invoice, such as including the words ‘tax invoice’ on the invoice
  • an invoice number shown prominently on the invoice
  • the purchaser’s identity, such as name, or ABN, for goods or services costing $1,000 or more
  • a units of supply line item
  • the description of the goods or services provided
  • the quantity provided
  • the per unit cost
  • the amount of GST that has been included (if relevant)
  • the total amount to be paid
  • the payment terms (usually 5 calendar days for eInvoices or otherwise 20 calendar days)
  • the name and contact details of the relevant Australian Government official that manages the contract
  • the purchase order number or other reference number as advised by the purchaser
  • details of how the Australian Government can make payment to your business, for example your bank account details or instructions for credit card payment.

Most of this information is already required if you are registered for GST so it should not be too much extra work to provide a correctly rendered invoice.

What happens if I don’t get paid on time?

It does not matter what size your business is, if the Australian Government organisation has acknowledged the satisfactory delivery of the goods and services in accordance with your contract and receipted a correctly rendered invoice from you, you are entitled to be paid on time.

Where payment is not made within the maximum payment terms, the Australian Government organisation is required to pay interest to your business if the amount of interest accrued is more than $100, as per the Supplier Pay On-Time or Pay Interest Policy (unless a specific exemption outlined in the policy applies).

Interest will not be payable if your business does not submit a correctly rendered invoice that meets the requirements of the written contract, including a purchase order contract. Interest will also not be payable where the Australian Government organisation has not acknowledged the satisfactory delivery of the goods or services.

You can find an Interest Calculator on the Department of Finance website to estimate the amount of interest payable in line with this policy.

What if there is dispute about my invoice?

The Australian Government follows best practice to pay the undisputed part of an invoice within the normal payment terms.

The Australian Government organisation is required to let you know as soon as practicable if there is an issue with your invoice so that you can address the problem and get paid.

You can help minimise invoice disputes by:

  • carefully following the requirements laid down in your contract for a correctly rendered invoice
  • checking all details on the invoice are correct before submitting your invoice (for example quantities, per unit costs, total costs, tax codes for GST or GST free products)
  • talking regularly with the Australian Government organisation’s contract manager to be sure they are satisfied with the work you have provided
  • promptly fixing any errors detected on your invoices.