While the feature brings structured payment-practice reporting directly into the Australian localization of Business Central, finance administrators and IT leads need to understand both what the tool automates and where human oversight, vendor classification, and statutory verification still apply.
What the Australian Localization Update Delivers
According to Microsoft's Dynamics 365 release plan documentation, Australian companies with more than AUD 100 million in annual turnover are required every six months to report how and when they pay their small business suppliers—defined in Microsoft's feature summary as suppliers with annual turnover under AUD 10 million. Historically, Microsoft's local functionality documentation for Australia noted that while Business Central stored the underlying invoice and payment data, it lacked a dedicated report for the Payment Times Reporting Scheme, leaving customers to either install a partner-built add-in or manually filter Vendor Ledger Entries and export them to Excel.
The June 2026 release wave 1 capability changes that baseline by introducing a structured generation workflow via the Payment Practices page. Instead of manually matching applied payment entries against invoices one by one, finance teams can organize vendors by size or payment terms, select a calculation period and detail grouping, and generate a formatted report that lets users drill down into the sourced entries behind each grouping.
Specifically, Microsoft's release notes state that the feature calculates three core metrics required by local authorities:
- The average agreed payment period
- The average actual payment term
- The proportion of invoices paid after the agreed payment period
Furthermore, the generated report categorizes payment timing details into six specific time ranges based on timing after the invoice date:
- Less than 21 days
- 21–30 days
- 31–60 days
- 61–90 days
- 91–120 days
- More than 120 days
How the Payment Practices Workflow Operates in Business Central
Because regulatory transparency laws exist in multiple jurisdictions—including the United Kingdom, Sweden, and New Zealand—Microsoft built the Payment Practices page as a core framework within Business Central that localizations can adapt. Based on Microsoft Learn's Payment Practices documentation and the Australian release plan details, generating a report follows a straightforward administrative procedure:
- Open the Payment Practices Workspace: In the Business Central web client, open search, enter Payment Practices, and select the related link.
- Create a New Practice Record: Select New to initialize a reporting header.
- Configure the General FastTab Parameters:
- No.: Assign or accept the record identifier for the report run.
- Aggregation Type: Choose how the data is grouped—either by Period (covering the defined start and end dates) or by Company Size. If your organization aggregates by company size, you must first define sizes on the Company Sizes page and assign the appropriate Company Size Code on each relevant Vendor Card.
- Header Type: Select whether the payment practice calculation sources entries for Vendors, Customers, or Both.
- Starting Date and Ending Date: Define the exact six-month reporting window for the calculation.
- Generate and Audit the Data: Select the Generate action. Business Central populates the statistical lines and automatically stamps the Generated On and Generated By fields for internal audit tracking.
- Inspect Sourced Entries: From the Statistics FastTab or grouping lines, select the calculated values to open the Payment Practice Data List page, which exposes the underlying ledger entries used to compute the averages and proportions.
One particularly important governance feature noted in Microsoft's Payment Practices documentation is manual edit tracking. If an accountant or compliance officer modifies the generated line values after running the calculation, Business Central automatically flags the report record as Modified Manually. For internal auditors and CFOs who need to sign off on statutory declarations, that flag provides an immediate indicator of whether numbers came straight from the ledger or underwent post-processing adjustments.
| Feature Component | Business Central Capability | Administrative / Compliance Consideration |
|---|---|---|
| Rollout Status | Generally available since June 5, 2026; enabled automatically for users | Accessible via the Business Central web client without separate feature-switch activation |
| Core Metrics | Average agreed payment period, average actual payment term, proportion paid late | Users can drill into sourced entries for each grouping to verify calculations |
| Aging Buckets | <21, 21–30, 31–60, 61–90, 91–120, and >120 days after invoice date | Compare bucket definitions against current Australian regulator rules for your specific reporting period |
| Vendor Classification | Supports grouping by Company Size or Payment Terms; Vendor Posting Groups can tag small businesses | Small Business Identification (SBI) tool lookups still require proper master-data tagging |
| Audit Trail | Tracks Generated On, Generated By, and Modified Manually status | Manual edits to generated lines trigger the manual modification flag |
Critical Compliance Caveats: Where Software Ends and Statutory Duty Begins
Now for the veteran IT and accounting reality check: turning on a localization feature in an ERP does not put legal compliance on autopilot. When configuring Business Central for Australian Payment Times Reporting, finance teams and Dynamics administrators should pay close attention to three operational nuances documented across Microsoft Learn.
1. Master Data Hygiene and Small Business Identification
Business Central can only group and calculate metrics accurately if it knows which vendors qualify as small business suppliers. In Microsoft's Australian local functionality guidance for Payment Times Reporting, Microsoft notes that reporting entities must confirm whether a supplier qualifies as a small business vendor using the Australian government's Small Business Identification (SBI) Tool. Microsoft recommends creating a dedicated Vendor Posting Group for confirmed small business vendors so that the classification automatically propagates to Vendor Ledger Entries whenever invoices and payments are posted. Likewise, if you use the Company Size aggregation option in the Payment Practices page, those company size codes must be accurately maintained on your Vendor Cards.
2. Reconciling Bucket Definitions and Calculation Dates
If you compare Microsoft's 2026 release plan description with Microsoft's Australian local functionality documentation (updated in October 2026), you will notice a discrepancy worth reviewing with your compliance team. The 2026 release wave 1 overview states that the generated report categorizes details into six ranges (<21 days through >120 days) based on timing after the invoice date. Meanwhile, Microsoft's local functionality documentation for Australia notes that under reporting rules applying to periods starting on or after July 1, 2024, the authorities define three primary buckets based on days after the day of receipt of the invoice (within 30 days, 31 to 60 days, and more than 60 days), alongside tracking invoice counts and proportional invoice values.
What does that mean in practice? Finance teams should inspect the output of the Payment Practices generator against the exact schema and instructions required by the Australian Payment Times Reporting Portal for their filing period. Because Business Central allows users to inspect sourced entries directly—and still supports exporting Vendor Ledger Entries to Excel—teams should verify how invoice dates, posting dates, and credit memos are treated in their generated figures before submitting them to the regulator.
3. Submission and Executive Declarations Remain External
Finally, Microsoft's documentation makes clear that Australian reporting entities must provide the authorities with both a data file (such as a delimited text file) and a formal declaration document signed by a responsible member of the reporting entity or its controlling head entity stating that the reported numbers are true. In consolidated corporate structures where an Australian head entity controls multiple subsidiaries (annual consolidated revenue of AUD 100 million or more), the controlling entity typically submits a single consolidated report. While Business Central streamlines the extraction and calculation of payable metrics, preparing the textual disclosures regarding trade agreements and lodging the signed declaration on the government portal remain responsibilities of the business.
Practical Next Steps for Business Central Administrators
If your organization operates in Australia and falls under the Payment Times Reporting threshold, you do not need to wait for a system upgrade to test this workflow—the feature has been live in General Availability since June 2026. To get the most out of it before your next six-month reporting cycle closes:
- Audit your Vendor Cards and Posting Groups: Verify that vendors confirmed via the government's Small Business Identification Tool are cleanly tagged in Business Central, either through a dedicated Vendor Posting Group or assigned Company Size Codes.
- Run a Pilot Payment Practice Report: Open the Payment Practices page in a sandbox or production environment, set the Header Type to Vendors, and run a test generation over a completed six-month window.
- Spot-Check Sourced Entries: Drill into the Payment Practice Data List from the Statistics FastTab and verify that invoices closed by credit memos are properly distinguished from actual payment settlements.
By pairing Business Central's built-in Payment Practices engine with disciplined vendor master data, Australian finance teams can turn a semi-annual compliance headache into a repeatable, auditable routine.