The Federal Small Business Ombudsman says too many big companies are leaving smaller firms in the lurch.

The agency has criticised major businesses and multinationals for dragging their heels when it comes to paying bills to smaller providers, effectively using them as cheap finance options.

Australian Small Business and Family Enterprise Ombudsman Kate Carnell says new laws should be created to force companies to pay their bills within 30 days.

She has proposed government agencies take an even stronger line and pay their bills within 15 days.

The Ombudsman investigated the slow paying practice, taking in over 3,000 submissions from small businesses.

Sixty per cent reported slow payments were getting worse.

“[It] is huge number, and we've found it's pretty widespread,” Ms Carnell said.

“Large, billion-dollar multinational companies are extending their payment times to as long as four months — no small business can last that long.

“So they are fundamentally using small-to-medium Australian businesses as cheap banks.”

The US government recently moved to a 15-day deadline for payments, and a Harvard Business school review of the policy found it alone had created 75,000 jobs.

“So there's real evidence to show that it produces jobs and growth,” Ms Carnell said.

“Fundamentally we've got to put a line in the sand — if large, multinational, billion-dollar companies can continue to push out their payment times for small business, it stops the economy growing.

“Small businesses can't invest in their businesses, they can't employ if they don't have cash flow.

“Cash flow is the fuel of the engine room in our economy, so we've got to get cash flow moving for small business.”

Ms Carnell said the reforms could be part of broader changes in the name of transparency.

“We think that naming and shaming is a good idea,” she said.

“And you can't do that unless we've got actual publication of what's happening with payment terms and times — they've done this in the UK.

“We're talking about the top 100 companies in Australia being required to report twice a year on their payment times, their terms and how they've delivered against those.

“We will be starting the process of setting up a national transparency register website to encourage this to happen.”