Telstra is shortening its payment terms for its suppliers from 30 days down to 20-day terms.
Chief financial officer Vicki Brady said in a blog post that the changes will apply to suppliers with invoices up to $2 million annually.
Brady said the reason for the change is to ensure the suppliers “are paid sooner” and aims to get more than 85 percent of its suppliers on the same terms by the end of FY2020.
“Cash flow is crucial to any business, and this change means operators will have cash in their hand sooner than ever,” Brady said.
In 2017, Telstra started paying its small business suppliers in 30-day terms, following an earlier announcement by chief executive Andy Penn. The telco used the Australian Bureau of Statistics’ definition of what a small business was to determine who was eligible.
“Three years later, these definitions have shifted as part of our ever-diversifying economy,” Brady said.
“Our new methodology for paying invoices within 20 days captures more businesses than ever, and we encourage governments and the Small Business Ombudsman to create a new standard, consistent definition of small business to ensure everyone is playing by the same rules.”