New code to help Vic small businesses

Victoria is set to introduce a voluntary Fair Payment Code of Practice to crack down on late payments to small businesses.

Based on a similar model in the UK, the code asks businesses to pledge to pay their suppliers on time - within 30 days of receiving a tax invoice, communicate clearly and resolve disputes quickly.

The Australia-first code will come into effect on July 1, with the Victorian Small Business Commissioner managing a new website where businesses can sign up and resolve complaints.

The code is based on evidence that larger businesses are implementing increasingly longer payment times, taking up to 120 days to pay, which can have a serious impact on the cash flow and viability of small businesses.