When Government Pays Late: What Suppliers Can Claim Under CPRs

The Canberra Times reported that “Taxpayers foot $480k bill for Defence's late payment fees”.

This is not discretionary. It is the direct result of Commonwealth payment policy from the Department of Finance.

Why is the Commonwealth paying interest?

Because under the Supplier Pay On Time or Pay Interest Policy (RMG 417):

• The Commonwealth must pay valid invoices within 20 calendar days; and

• If it does not, interest is payable automatically.

This is not goodwill. It is a policy-backed financial obligation.

What this means for suppliers

Late payment is not just delay. It creates a legal and commercial entitlement. If:

• your invoice is correctly rendered; and

• payment is late

then the Commonwealth entity is required to pay interest in accordance with policy. This sits alongside your contract and is reinforced by Commonwealth policy settings.

Where suppliers get this wrong

Most smaller suppliers:

• accept delayed payment as “normal”;

• do not track invoice acceptance dates; and

• do not enforce interest entitlements.

Result:

• you fund delivery;

• the Commonwealth carries no immediate consequence; and

• your margins absorb the impact.

More mature suppliers typically embed this into billing processes.

What to do in practice

At delivery stage:

• ensure invoices are compliant on submission and that you issue them correctly; and

• track the 20-day payment window.

If payment is late:

• identify the delay against policy;

• quantify interest entitlement; and

• confirm interest has been calculated and included, or include as a separate line item where required by the contract or entity practice.

Make sure it is a standard commercial adjustment aligned with contract and policy.

The commercial reality

This is not about “charging government interest”.

It is about ensuring Departments stay compliant, and in practice, once identified, payment issues are typically addressed quickly.

AQMN Legal (and aqmn360)

AQMN Legal (and our offering of aqmn360) works with suppliers to help them get the most value and compliance out of their contracts with Departments, ensure delivery is on time and meets the acceptance criteria, and align with, and leverage, Commonwealth Procurement Rules and policy settings.

For suppliers engaging in Commonwealth work, AQMN is a competitive advantage.