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Government departments still slow to pay business suppliers

Here’s how small businesses that are struggling to get government departments to pay their invoices can now get help from National Treasury.

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Many small businesses are waiting longer for government departments to pay them for supplying goods and services at a time when they need a life line just to stay afloat.

This was revealed in National Treasury’s annual report on government departments’ non-compliance with the requirement to pay suppliers’ invoices within 30 days. The report, which showed the high level of slow payment, especially at provincial level, was released on Thursday. 

“The report shows that national departments achieved an annual average timeous submission rate of 73% during the 2020/21 financial year. This represents a regression when compared to the annual average timeous submission rate of 85% achieved in the 2019/20 financial year,” National Treasury said in a statement.

However, there was an improvement in the number of invoices paid after 30 days and the number of invoices older than 30 days and not paid when comparing the 2020/2021 financial year to the 2019/2020 financial year, amid restrictions posed by the Covid-19 pandemic. 

“These numbers however, remain very high at a provincial level. In the 2020/2021 financial year,” National Treasury said.

National Treasury said it had established a centralised 30 days’ queries email ( where suppliers can log their non-payment queries regarding government slow payers with the National Treasury. 

The National Treasury assists suppliers by following up with institutions that transgress the Public Finance Management Act (PFMA) by paying late or not paying invoices. 

National Treasury then responds to the suppliers and advises on:

  • The reasons for the delay 
  • The date payment will be effected.                    

National Treasury issued a Treasury Instruction Note Number 34, which requires departments to submit 30 days’ exception reports to the relevant treasuries by the 7th day of each month with information in respect of the preceding month. Information relating to the number and value of invoices paid after 30 days from the date of receiving invoices; the number and value of invoices that are older than 30 days, which remained unpaid; and the reasons for the late and/or non-payment of the invoices are required from departments. Treasury Instruction Note Number 34 requires departments to implement manual or electronic systems and processes that will enable departments to track invoices from the time they are received at the relevant cost centres to the time that a payment is made.