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Payment times reporting Small Business Identification tool

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The SBI tool reduces the compliance burden for reporting entities. It assists reporting entities to identify which suppliers they need to report on.

For the purposes of the scheme, a business is small if it is identified as such through the SBI Tool. The Tool identities businesses as small businesses if they carry on an enterprise in Australia, have an ABN and their annual turnover was less than $10 million for the most recent income year.

Reporting entities can access the SBI tool through a reporting portal.

To use the SBI tool, a reporting entity should first collate a list of their supplier ABNs. As entities are not required to report on payments to member of their controlling corporation’s group, the entity should remove the ABNs of these businesses. This includes small businesses that are subsidiaries of the group.

A reporting entity will upload a list of its suppliers ABNs and the Tool will return a CSV file listing those who have been identified indirectly as small businesses. The Tool works on a ‘negative screen’ basis: the database contains ABNs of medium and large businesses, the list uploaded by a reporting entity

The reporting entity can then upload a CSV file of its relevant supplier ABNs to the SBI tool. The SBI tool will return a CSV file listing the ABNs. These ABNs are small businesses for the purposes of their Payment times report.

The SBI tool only contains the ABNs of large and medium sized businesses. It does not include any information on small businesses. The SBI tool works as a ‘negative screen’ for small businesses. ABNs uploaded are matched against the database, any ABNs that do not have a match are assumed to be small businesses. The SBI tool returns a list of ABNs that excludes the identified large and medium sized businesses within a reporting entity’s list of supplier ABNs. 

 Small businesses concerned about being identified as a small business can opt-out of being identified in the SBI tool. They can do this online via the reporting portal. They also have the ability to opt back in.

Small businesses that have opted out will not be included in the aggregate data provided in Payment times reports.

Small business suppliers that do not have an ABN (e.g. foreign entity/overseas suppliers) do not need to be reported on by a reporting entity.

When to run the SBI tool

A reporting entity must run an extract from the SBI tool at the end of the reporting period during the during the 3-month reporting window.

Payments to the small business ABNs identified in this extract must be reported on.

This will ensure new small business suppliers engaged with during the reporting period will be captured.

Small businesses that have chosen to opt out of the SBI tool will also be excluded from the aggregate data.

Reporting entities can also use the SBI tool at any other time. For example, to assess their current payment terms and practices in relation to their small business suppliers.