🇦🇺Australia

Delayed Defence Payments

1 verified sources

Definition

Defence mandates payment within 30 days of the later of goods receipt or correct invoice, requiring specific details like PO number, contact officer details, and receipt stamp. Incorrect milestone invoices trigger slow verification, extending time-to-cash.

Key Findings

  • Financial Impact: AUD 100,000+ opportunity cost per delayed large progress payment (assuming 30-90 extra days at 10% annual financing cost)
  • Frequency: Per invoice or milestone in Defence contracts
  • Root Cause: Manual invoice matching against strict Defence requirements in progress/milestone billing

Why This Matters

The Pitch: Defense suppliers in Australia waste months in cash flow tied up in high AR days from Defence milestone billing delays. Automation of invoice validation eliminates this risk.

Affected Stakeholders

Finance Managers, Accounts Receivable Teams, Project Controllers

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Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Defence ERP Overrun

AUD 2.5B total overrun (from $1B original to $3.5B lifetime)

Procurement Delays and Cost Escalations

AUD 16-21B allocated over decade with delays risking 10-20% overruns; individual projects like 155mm munitions paused costing millions in sunk tender efforts

Idle Capacity from Compliance Bottlenecks

AUD 5-10M per year in idle equipment for mid-tier firms; targets 15,000 rounds/year delayed to 2028

Export Control Permit Breaches

AUD 100,000+ per breach in fines; 20-40 hours/month in permit delays per project

Compliance Ambiguities & Red Tape

AUD 50,000-150,000 per large project in extended liability and admin costs

DSGL Misclassification Risks

2-5% project delays (AUD 100k+ per delayed export); minimum statutory fines AUD 222,000 per serious breach

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