Expenditure
Creditor Payment 30-Day Breach
Compliance with the 30-day payment rule for creditors under the PFMA and MFMA, including average days outstanding.
Why the 30-day rule matters
The 30-day payment rule under the PFMA and MFMA exists to protect suppliers, especially small businesses, from being starved of cash by slow-paying organs of state. Breaching it is both a compliance failure and a sustainability red flag, because late payment usually signals a cash-flow problem the entity is hiding from its statements. AuditPro Core tracks 30-day compliance and average days outstanding so accounting officers can see whether late payment is an exception or a chronic condition.
The Numbers
AuditPro Core renders this view from your tenant's live, tamper-evident records. The figures below are illustrative sample data.
Entities non-compliant
164
39% of portfolio
Avg days to pay
78
▲ 6 days
Value overdue
R 31.4 bn
Within 30 days
47%
of invoices
Average days to pay creditors
Worst payment performers
| Entity | Avg days | Overdue value |
|---|---|---|
| Mahikeng Local | 184 | R 920 m |
| Provincial public works | 142 | R 1.4 bn |
| Emfuleni Local | 167 | R 1.1 bn |
Figures shown are illustrative sample data for demonstration. AuditPro Core renders these views from your own tenant's live, tamper-evident records.
The statutory 30-day obligation
Treasury regulations require all valid invoices to be paid within 30 days of receipt. The rule is non-negotiable and applies regardless of the entity's cash position.
Late payment as a distress signal
When days outstanding climb well beyond 30, it usually means the entity is using suppliers as an informal overdraft. This often precedes a going-concern or solvency finding.
The SMME impact
Small suppliers carry the least working capital and are most damaged by late payment. Chronic breaches push them into distress and reduce future competition for tenders.
Interest and fruitless expenditure
Late payment frequently attracts interest and penalties, which become fruitless and wasteful expenditure. The breach therefore compounds into an additional avoidable loss.
How AuditPro Core Bridges the Gap
- Ageing reconciliation: the creditors ledger is reconciled and aged to calculate true days outstanding against invoice receipt dates.
- Exception workflow: invoices breaching 30 days are flagged for payment and root-cause review.
- Continuous monitoring: average days outstanding is tracked in-year so deterioration is caught before year-end.
- Audit-ready export: the compliance position exports for the audit committee and Treasury reporting.
Key Takeaways
- The 30-day rule is a non-negotiable statutory obligation.
- Rising days outstanding is a leading indicator of cash-flow distress.
- Late payment hits SMME suppliers hardest and shrinks future competition.
- Breaches often trigger interest that becomes fruitless expenditure.
See This on Your Own Data
AuditPro Core renders this dashboard from your tenant's live, tamper-evident records — every figure traceable to source.