Credit Management in Australia - December 2014

Volume 22, No 2 December 2014

The Publication for Credit and Financial Professionals

IN AUSTRALIA

> Privacy > PPSA > Development > Credit Management

2014 Conference Report & Photos www.aicm.com.au

DIRECTORS Australian President – G.L. Morris MICM CCE Australian VP, Law & Regulation – J.A. Neate MICM

40 QLD Division: Rachael Ryan, Sarah Mizon, Fiona Doherty, Scott Goodrick.

Professional Development – S.D. Mitchinson LICM YCPA & CCE – G.C. Young MICM Member Services – J.G. Hurst FICM CCE Finance – G. Odlum MICM CCE CHIEF EXECUTIVE OFFICER N. Pilavidis MICM CCE Level 1, 619 Pacific Highway, St Leonards NSW 2065 Tel: (02) 9906 4563, Fax: (02) 9906 5686 Email: nick@aicm.com.au EXECUTIVE SUPPORT SA Division – Kerry Hammill PO Box 2131, Felixstow SA 5070 Tel: (08) 8365 9021, Fax: (08) 8365 9021, Email: sa@aicm.com.au

42 SA Division: Gail Crowder and Rebecca Edmiston.

EDITOR/PUBLISHER Nick Pilavidis | Email: nick@aicm.com.au CONTRIBUTING EDITORS Colin Magee NSW Murray Ashford QLD Kerry Hammill SA Warren Meyers WA Donna Smith VIC/TAS ADVERTISING MANAGER

44 VIC/TAS Division: Jason McCutcheon has members enthralled.

Tony Paul Association Media Tel: 0401 917 799 Email: tony@associationmedia.com.au EDITING & PRODUCTION Anthea Vandertouw Ferncliff Productions Tel: 0408 290 440 Email: ferncliff1@bigpond.com THE EDITOR reserves the right to alter or omit any article or advertisement submitted and requires idemnity from the advertisers and contributors against damages or liabilities that may arise from material published.

CREDIT MANAGEMENT IN AUSTRALIA is published by the Australian Institute of Credit Management, Level 1, 619 Pacific Highway, St Leonards NSW 2065. The views expressed in CREDIT MANAGEMENT IN AUSTRALIA are not necessarily those of Australian Institute of Credit Management, which does not expect or invite any person to act or rely on any statement, opinion or advice contained herein (whether in the form of an advertisement or editorial) and neither the Institute or any of its employees, agents or contributors shall be liable for any opinion contained herein. © The Australian Institute of Credit Management, 2014.

EDITORIAL CONTRIBUTIONS SHOULD BE SENT TO: The Editor, Level 1, 619 Pacific Highway, St Leonards NSW 2065 or Email: nick@aicm.com.au CREDIT MANAGEMENT IN AUSTRALIA • December 2014

46 WA Division: Great tea and lovely venue.

48 NSW Division: Golf Day Winners – Charles Kinsella, Daniel Grace, Nick Pilavidis and Doug Rouessart.

Volume 22, Number 2 – December 2014

4

Message From the President

AICM Training News - AICM Training News

National Conference

6 8 11 12 14

- Certified Credit Executive Dux - Young Credit Professionals of the Year - Credit Team of the Year - President’s Trophy Award

- Manage bad and doubtful debts - Factoring and invoice discounting - Unique Student Identifier

Around the States Queensland

Learned Legal

South Australia

15 15

Section 64 – PPSA Act 2012 AICM - Can We Help

Victoria/Tasmania Western Australia/Northern Territory New South Wales New Members

Credit Management

36 37 38 39

40 42 44 46 48 51

16

Divergent trends set to trend in 2015

By Stephen Koukoulas

18

Voluntary administrations to rise as record numbers of ASX companies face collapse

By Antony Resnick and Gavin Robertson

20

Veda National Credit Manager’s Survey

Privacy 26

Privacy Awareness

By Debra Kruse and Michael Hartman

Privacy Act Participant Membership Promotion

27

PPSA 30

The Six Reasons

By Kim Powell

32

Personal Property Securities and bailments, consignments and a receiver’s lien

By Leigh Adams

Development 35

Trust me I’m the boss

Wishing you all a Merry Christmas and a Happy New Year

By Daniel Kehoe

ASSOCIATION MEDIA For Advertising Opportunities in Credit Management In Australia

CALL Tony Paul Phone: 0401 917 799 30 Kim Powell

35

32 Leigh Adams

Email: tony@associationmedia.com.au

Daniel Kehoe

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

aicm from the president

W Grant Morris CCE Australian President

4

elcome to our first ever online or soft copy magazine which replaces the traditional magazine we have been mailing for 20 years. We hope you enjoy it as we aim to deliver to you more timely news and better event coverage at a reduced cost to the AICM thus allowing us to divert funds to other areas of benefit to credit professionals.

As the year draws to a close and a new year commences it is opportune to reflect back on 2014 and look forward to what will be in 2015.

In March the Privacy Amendment (Enhancing Privacy Protection) Act 2012 kicked in. The Act required a credit provider to be a member of an External Dispute Resolution Scheme (EDR) and after lobbying by the AICM, it’s members and supporters and other parties this requirement was deferred for 12 months.

Unless further lobbying is successful, which is unlikely as the major objection of cost has been overcome, all credit providers will be required to join an EDR Scheme in March 2015. We have been in discussions with Raj Venga the Ombudsman and CEO of Credit Ombudsman Service (COSL) and COSL are now offering a discounted membership to all AICM members for the fixed annual cost of $850 incl GST in year 1 and $650 incl GST in each subsequent year. This is a considerable discount on standard fees and covers all Privacy disputes which may be lodged with COSL rather than their standard additional fee for each dispute.

Put simply “get on board”. You can register your interest at https://www.surveymonkey. com/s/AICMCOSL to ensure you receive registration forms when an announcement is made regarding the extension of the exemption.

Our October conference on the Gold Coast was our most successful for many years with the largest gathering of Credit Professionals for a long time. There were over 200 companies represented and some 3 dozen of those were ASX100 companies. The sessions were well attended and the dinner was a sell-out.

At the conference we announced the Veda sponsored 2014 Credit Team of the Year which is Reece Pty Ltd and the Dun & Bradstreet sponsored 2014 Young Credit Professional of the Year winner which, for the first time in AICM’s history, was awarded jointly. The winners are

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

Rebecca Edmiston (Bendigo & Adelaide Bank – SA/NT) and Anna Golubeva (Hilti Australia – NSW). Congratulations to Rhys Buzza and the team at Reece and Rebecca and Anna who were very deserving winners of the awards in very strong fields of finalists.

Our conference survey is still open and I would encourage you to please complete the survey and provide your thoughts and suggestions towards the 2015 conference in Sydney. The link is https://www.surveymonkey. com/s/AICMConference I would like to share with you part of my address to delegates at the conference: “Did you know that in the 3 years ended June 2008 the average number of appointments of Administrators, Liquidators and Receivers & Managers was 12,390 and it was fairly steady around that figure in each of those years. In 2009 , as a result of the GFC, it jumped to 15,567 a staggering 24% increase and has remained at these increased levels over the following 4 years closing in 2013 at 15,815.

In the year just gone ie to June 2014, the number of appointments fell by nearly 2,000 or 12% to 13,985.

So all is good, or is it?

Perhaps we should not be complacent when we see historical signs of improvement as our role is to look forward. No-one ever signed off on a deal for the supply of a product or service knowing they wouldn’t be paid. A loss is the future non payment for goods or services provided previously and we must therefore look forward, albeit not forgetting that history is a good teacher.

CPA Australia analysed some 16,000 annual reports of listed companies between 2005 and 2013. On reviewing the 2013 results they noted 11 per cent more companies attracted financial distress warnings that year than during the GFC. These reports are completed by independent auditors, who are required to flag in a company’s annual report if they believe there is “significant uncertainty” in a company’s ability to continue as a going concern.

The report shows that almost a third of ASXlisted companies attracted “going concern” warnings from their independent auditors.

Most of the warnings were concentrated in the bottom 500 listed companies.

Put simply, 58 per cent of Australia’s smallest

aicm from the president

500 listed companies in 2013 attracted going concern warnings by auditors. This is something CPA boss Alex Malley describes as a “sobering reminder of the fragility of the Australian economy and the challenges many businesses face”.

Energy and mining companies are at the fore with more than 40 per cent of these sectors facing serious financial uncertainty. The report notes going concern warnings also increased in sectors including consumer staples, industrials, healthcare and utilities.

The report makes sobering reading indeed, and a good reason to be here this week and to be a member of the AICM.” We need to stay a step ahead of the game and we need to not only be across legislative changes but also lobby for change ourselves. On 7th November the Attorney General released its draft Insolvency Law Reform Bill 2014 and noted The draft Bill comprises a package of proposals to amend and streamline the Bankruptcy Act 1966 and the Corporations Act 2001. The proposed amendments will: zz remove unnecessary costs and increase efficiency in insolvency administrations; zz enhance communication and transparency between stakeholders; zz promote market competition on price and quality; zz boost confidence in the professionalism and competence of insolvency practitioners; and zz remove unnecessary costs from the insolvency industry resulting in around $55.4 million per annum in compliance cost savings.

This Bill requires submissions by December 19 and is currently being reviewed by James Neate, our Legal Affairs Director, with a view to providing a submission on behalf of the AICM and it’s members. I would encourage you to provide any comments to James through our CEO Nick Pilavidis at our office or nick@aicm. com.au.

At the forefront of the AICM are our CCE’s and I am pleased to be able to say that this year 11 have completed the exam and assignment and become CCE’s. A special acknowledgement to the 5 Credit Managers at Coates Hire who took the step and this year became CCE’s (onya Anthony, Denise, Kathy, Mel and Sev) and a word of encouragement to others to encourage your team leaders and managers to come on board

just like the 16 who sat the exam in September and will shortly join the ranks.

Last month 2014’s top performers were recognised at the second annual AICM Pinnacle Awards. I congratulate the following winners: –– Credit Manager of the Year (teams > 10) Adam Clarke - Star Track –– Credit Manager of the Year (teams < 10) Nicole Chesher - Ecolab –– Senior Credit Officer of the Year Imelda Quiros - Coates Hire –– Legal Representative of the Year Paul Hutchinson - Force Legal –– External Collector of the Year Andrew Smith Australian Recoveries & Collections –– Recruiter of the Year Vanessa Alkon Randstad –– High Five Award Sev Indrele - Coates Hire Please take the time to read the various articles and sections in this magazine including “Around the States” to see what is happening in your neck of the woods and an interesting question raised in “AICM – Can We Help”.

I encourage you to submit your questions to aicm@aicm.com.au and we will seek answers from experts in the topic. By sharing your questions you may obtain additional information or a different perspective free of charge and you will definitely help share some knowledge and experience with your fellow Credit Professionals.

It has been a long and successful year for the AICM with a successful national conference, growth in membership and CCE’s and the deferral of the requirement to join an EDR and negotiation of a great deal with COSL for 2015 and beyond.

Max has been to Turkey and the Gold Coast and like the rest of us is looking forward to the Christmas break. Use the break to reflect back on your achievements in 2014 but also use it to plan what you are going to do bigger and better in 2015 – perhaps obtain your CCE or encourage a team mate to do so, undertake a Certificate or Diploma qualification, enter the Credit Team of the Year or Young Credit Professional of the Year, include the Sydney conference in your FY16 budget or help the AICM to put together submissions for legislative reform to make your lot better. Give it some thought and get on board.

I look forward to seeing you at an AICM event soon as you support the Institute which supports you.

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

5

2014 National The 2014 National Conference was full of Great Sessions, Awards, Exhibitors and Networking opportunities.

Some Conference highlights include: –– Great Golf Day –– Informative presentations, Slides and photos are now on the Credit Network http://www.creditnetwork.com.au –– Engaging exhibitors, featuring Video Games, Barista’s, ice cream, prizes and even a Cash Cow! –– Networking and Social event, the highlight being the Presidents Dinner sponsored by D&B. –– CCE Dux Award – David Haysom was the Dux of this year’s CCE candidates

Mark Robberds and Maurine Grant

Debbie Leo and Jeff Hurst.

Nick leads the way.

Thirsty work.

Our MC – James Neate.

Exhibitor alley.

6

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

Conference –– Credit Team of the Year Winner – Congratulations to Reece Pty Ltd –– Young Credit Professional of the Year Winner – Congratulations to Anna Golubeva, NSW and Rebecca Edmiston, SA –– President’s Trophy Winner – South Australia, Congratulations to Gail Crowder and the SA Council The AICM is your Institute and The Conference is your Conference so your thoughts are vital to ensuring your needs are met. Please complete the survey at https://www.surveymonkey.com/s/AICMConference or email aicm@aicm.com.au with any thoughts, comments or Feedback. Please complete the survey whether or not you attended as it will help us review and plan future conferences.

The Girls from Results Legal

Veda – let the games begin.

NCI – We are always ready to meet your needs.

The Cash Cow.

(creditor)Watch – boys just want to have fun.

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

7

2014 National Certified Credit Executive Dux

Lou handing the prize to David Haysom.

CCE Re-certifications – Class of ‘99.

Lou Caldararo and Terry Duffy from NCI. Prior to the opening of the National Conference it is tradition for all CCE’s to attend the annual CCE Luncheon, where new CCE’s are welcomed and CCE’s who have re-certified receive their certificates. This year Peter Mills, Special Counsel, PPS, Finance & Credit Recoveries, Herbert Greer Solicitors spoke about the challenges of doing business in Papua New Guinea and the South Pacific.

Also at this lunch, it is traditional to announce the Dux of the year. The Dux is chosen based on the exam and essay that candidates submit as part of the requirements to apply for CCE status. This year the winner was David Haysom of Fuchs Lubricants (Australasia) Pty Ltd. As David was not able to attend the luncheon so Terry Duffy of NCI presented Vic/Tas President Lou Caldararo with a bottle of Grange Hermitage. When David arrived at the conference an official handing over ceremony took place with photographic evidence taken to show that the bottle was transferred with full contents.

CCE Re-certs – Class of ‘08.

Janelle Muegge – 2014 graduate.

8

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

Conference

Peter Mills addressing CCE Luncheon.

CCE’s at Luncheon.

Grant Morris, National President – Opening address.

Darin Milner from D&B.

A captured audience.

Tim Courtright, Veda – Welcome.

Chris Caton – Conference Keynote Speaker.

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

9

2014 National

EDX Australia.

CreditSoft Solutions.

Noble Systems.

Austral Mercantile.

AMPAC Debt Recovery.

The D&B Team.

10

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

NV Group

Conference 2014 Young Credit Professionals of the Year This year we had a record number of expressions of interest and the feedback from the judging panels at Division and National levels was that the quality of the candidates was extremely high.

Mark Russell, Director at Dun and Bradstreet, in announcing the winners, commented that a handful of points separated all 5 National Finalists. Zero points separated the top 2 with Rebecca Edmiston and Anna Golubeva being announced joint winners. It is the first year in the almost 20 year history of the award that we have two Australian Young Credit Professional of the year winners.

AICM and all of the candidates thank Dun and Bradstreet for their continued support of this award.

Rebecca Edmiston and Anna Golubeva.

The YCPA Finalists.

Rebecca Edmiston.

YCP Winners – current and past.

Anna Golubeva.

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

11

2014 National Credit Team of the Year

The Reece Team with Grant Morris and Debbie Leo. Reece Pty Ltd and Recoveries Corporation Pty Ltd were the top two National Finalists to attend the conference.

Grant Morris, AICM National President and Debbie Leo, General Manager Major Accounts, Veda announced Reece Pty Ltd as the 2014 Credit Team of the Year. This year’s Judges were: –– Grant Morris, National President and National Credit Manager at Coates Hire

The Reece Team celebrate.

12

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

–– Simon Holloway, Credit Manager National Accounts at Carlton and United Breweries –– Andrew Le Marchant, Credit Manager at Allens Linklaters We thank the Judges for their time in this year’s judging and to Veda for their continued support of this award, including making it possible for the judging to be held face to face in both Sydney and Melbourne.

Recoveries Corp representatives.

Conference

2013 Credit Team game show.

Cheers.

Elegant evening ahead.

Hair, Hair, Where, Where!

Delegates at the President’s Dinner.

Lou and Jeff – feeling the love.

Getting to know you!

Let’s dance.

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

13

2014 National Conference President’s Trophy Award

Winners are grinners.

SA President Gail Crowder.

This will pack in my luggage.

Each year the National President announces the President’s Trophy which recognises the division that has excelled with their engagement with their members. This year’s winner was South Australia.

Congratulations to Gail Crowder, SA Division President and the SA council.

Girls just want to have fun.

14

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

aicm Can We Help?

AICM receives questions from Credit Managers that it puts to a panel of lawyers to answer.

The brief is not only to answer the question but to look into the root cause of the problem and contribute strategic thought.

Question

into then mean the Law firm has to tic tac with the ALRM for

Hardly a day goes by without receiving notification of the

decisions on whether to accept any offers made – a doubling

appointment of an Administrator, Liquidator or Receiver and

up of time and fees. I can understand why they might be

Manager (ALRM) and then the reports flow through. I notice

used to pursue payment but why doesn’t the ALRM make the

the reports always include a not insubstantial amount of fees

initial claim? How do they select the Law Firm? Are there any

paid to solicitors and wonder why this is so. Often the legal

commissions paid? Is this required to be reported? Why don’t

fees are equal to the ALRM’s fees. This is a substantial drain

they negotiate reductions in fees especially for the volumes of

on funds and reduces or eliminates dividends to creditors.

business they pass to them? I know the firms we use to assist

Why do ALRM’s find the need to seek such legal advice? Are

us with collection action are very competitive and commercial.

they not knowledgeable in the handling of the appointments?

– National Credit Manager Sydney MICM CCE

Why do they use solicitors to submit initial claims for alleged preferential payments as this would seem to double the cost

Response

ie the ALRM reviews the matter and then the Law Firm does

A good series of questions. We will put to them to ARITA and

the same? Any negotiations which are subsequently entered

a number of Insolvency Firms and seek their comment.

Learned Legal

Section 64 of the Personal Property Securities Act 2012 (‘the PPSA’) The Learned Legal section provides quick tips on specific areas of law that affect credit management.

It is not unusual for customers to seek to factor their accounts to assist with the cash flow of their businesses.

Suppliers should seek to ensure that their Terms and

default of Terms, this does not prevent financiers or factors from registering their security interest under S. 64 of the PPSA with the Personal Property Securities Register. Such

Conditions of Sale (‘Terms’) provide that customers cannot

registration will provide priority over the pmsi security interest

factor their accounts without their consent. Terms should

of suppliers concerning sale proceeds.

provide that customers give suppliers a security interest under the Personal Property Securities Act 2012 (‘PPSA’) in all present

Section 120 of the PPSA

and future inventory and accounts as original collateral.

On occasion a supplier may become aware that the stock

This means that customers agree that the suppliers’ security interest includes not only sale proceeds of stock but in the accounts of customers and so requiring customers to obtain the suppliers’ consent to factor the accounts.

supplied to a customer has been onsold to a third party and the third party owes an amount to the customer on the stock.

Where the supplier has a security interest in the stock in the form of an account the supplier may provide the third party

Terms should further provide a negative pledge which

with a notice pursuant to S. 120 (3) of the PPSA requiring that

specifically provides that customers agree not to grant any

within 5 days of receiving the notice from the supplier, the

security interest in any accounts as original collateral under S.

third party is to pay to the supplier the amount that the third

64 of the PPSA.

party owes to the customer on the stock. In the event that the

By creating in Terms for suppliers a security interest in

third party fails to do so, the supplier may commence Court

accounts as original collateral and requiring customers not

proceedings for orders that the third party pay the amount

to grant a security interest for financiers and factors in such

owed to the customer to the supplier on the stock.

accounts then in the event customers do factor accounts

The use of S. 120 depends upon the supplier knowing that

suppliers may give customers notice of default under Terms

the supplier’s stock has been supplied by the customer to a

and seek to seize unsold stock and incorporated product from

third party and the third party owes an amount on the stock to

customers. However where accounts have been factored in

the customer.

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

15

Credit Management

Divergent trends set to trend in 2015

By Stephen Koukoulas, Economic Adviser to Dun & Bradstreet

This year is coming to an end with the Australian economy having experienced 12 months of divergent trends. Overall, the rate of economic growth has slowed, the unemployment rate edged upwards and inflation has eased, yet business conditions have remained buoyant despite the government announcing budget tightening measures to achieve a surplus.

The influence of global economic and market conditions on Australia have been generally negative this year, highlighted by sharp falls in commodity prices and loose monetary policy settings throughout the industrialised world.

Persistent weakness in the Eurozone

For the credit industry and the business sector more broadly, 2015 appears set to deliver continued mixed news.

Stephen Koukoulas

16

has created a drag on the global economy, including China which continues to experience a slowdown in its performance.

The good news globally has come from the United States, which has registered sustained GDP growth and an improvement in employment to levels that were last seen before the global financial crisis unfolded.

The year’s mixed story has seen the Reserve Bank of Australia hold official interest rates at a record low level throughout the year, while in recent months the Australian dollar has fallen to a five-year low.

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

For the credit industry and the business sector more broadly, 2015 appears set to deliver continued mixed news.

Despite the challenges of 2014, the business sector is looking at next year favourably. Dun & Bradstreet’s (D&B) latest Business Expectations Survey reveals that the corporate sector is upbeat on expected sales, profits and, to a slightly lesser extent, employment and capital expenditure.

Encouragingly, there are signs that the non-mining side of the economy will lift its capital expenditure plans, although more substantial investment levels will be necessary to see overall growth improve next year.

Businesses will also be looking for an improvement from the consumer side of the economy, which has been problematic over the last 12-months.

Despite record-low interest rates, consumers have been cautious in their spending and borrowing (outside of property), with weaknesses in the labour market, a record low pace for wages growth, and high levels of household debt proving major obstacles. Unsurprisingly, given these conditions, D&B’s Consumer Financial Stress Index has deteriorated over the past year as more Australians struggle to meet their current obligation or take on new credit.

Summing up these economic indicators, D&B is forecasting real GDP growth in 2015 at around 2.5 per cent, a little below the pace that is seen to be consistent with strong activity.

With below-trend activity, the unemployment rate is likely to edge higher and could well exceed 6.5 per cent by the middle of the year. As a result, wages growth is set to slow

Credit Management

to a new record low of around two per cent. Inflation is forecast to ease to around 2 per cent, with prices contained by the combination of a subdued economy, negative global influences and weak wages growth.

In this economic climate and with soft revenue growth, the government will struggle with its fiscal policy objective of returning the budget to surplus.

Meanwhile, the RBA will most likely continue with a period of steady monetary policy – although if house price growth eases, the central bank would be inclined to be cut interest rates.

A wildcard for the economy next year is the Australian dollar. Reflecting the fall in commodity prices, the dollar has so far eased from peak levels around $US1.10 to around $US0.87, with further falls to a range of $US0.75–0.80 not out of the question.

At this level, the sections of the economy that need to begin replacing

mining sector output will benefit, including agriculture, manufacturing and Australia’s sizeable services industries. This outcome is significantly more realistic following Australia’s free trade agreement with China.

The bottom line is that the Australian economy is subdued and there may need to be more policy stimulus in 2015. While the business sector is optimistic and economic fundamentals stable, growth will remain below-trend in the near-term.

On the upside, following years of slow economic progress since the global financial crisis, businesses

are better placed to manage soft conditions and also exploit the opportunities that exist. Businessto-business payment times are the healthiest level since 2007, fewer operations are concerned about cashflow, and more startups are commencing operations.

The consumer position, however, has not improved and a divergence has developed between business and consumer outlooks. Whether businesses drag consumers out of their funk or whether the reverse occurs next year could be the decisive moment for the economy. u

The bottom line is that the Australian economy is subdued and there may need to be more policy stimulus in 2015.

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December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

17

Credit Management

Voluntary administrations to rise as record numbers of ASX companies face collapse

By Antony Resnick, principal BRI Ferrier and Gavin Robertson, principal M+K lawyers

Antony Resnick

Gavin Robertson

18

Voluntary administration rates for listed companies look set to soar as directors of growing numbers of small and medium companies in financial dire straits, opt for administration as a potential lifeline for the business, rather than face personal exposure for insolvent trading.

Recent research from CPA Australia* has shown that nearly a third of all ASX-listed companies were close to insolvent in 2013, including more than half of the smallest 500 and 28 per cent of medium companies. And of the more than 700 small and medium companies in serious financial distress, those in the energy and mining, consumer staples, industrials, health care and utilities sectors were at greatest risk of collapse.

Specifically, it is small and medium companies that are facing a perfect storm of financial woes. The capital markets have been brutal, making it especially challenging for small caps to fund working capital. Coupled with low levels of consumer confidence, falling commodity export prices and stagnating household incomes, it’s no wonder many listed entities are struggling.

Directors who have exhausted conventional funding options are more likely to turn to voluntary administration, causing an uptick in voluntary administrations in the months ahead. ASIC statistics for July and August 2014, recorded an 8 per cent rise in voluntary administrations over the previous two months. This upward trend should continue as more directors opt for administration as

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

a final resort attempt to salvage the business when the realisation dawns that the company no longer has the means to continue trading.

While voluntary administration is sometimes regarded as a precursor to liquidation, perceptions are changing and more companies are proactively using this as a positive tool to save the business.

If initiated early enough and the directors have a considered plan for restructuring the business, an administration can in fact be a valuable lifeline, giving distressed companies the maximum chance of survival. There are many brands and businesses which have emerged successfully from the process including Darrell Lea, St Hilliers Group, Spring Gully Foods and many more.

Administrators can implement many options that are not readily available to the directors, including capitalising debt using a deed of company arrangement or restructuring for the purposes of a backdoor listing.

And for directors, administration can be a viable strategy to save the company because of the various benefits available to the company and directors.

The company gains a freeze on its creditors, giving it vital breathing space to restructure and preserve the value of company assets, including trading businesses, for the benefit of all stakeholders. And where assets sales are part of the solution, the administrator will in most cases be able to achieve a better result than the directors because of their strong

Credit Management

Another of the major advantages of a voluntary administration is that directors are protected from exposure to claims of insolvent trading... commercial reputation and ability to inject competitive tension into any bidding process. Additionally, shareholder and director approval are not required to carry out the sale which can save significant time and money.

Another of the major advantages of a voluntary administration is that directors are protected from exposure to claims of insolvent trading which can leave them vulnerable to significant personal liabilities.

The law requires directors to protect the interests of creditors.

They can be held personally liable if they incur debts once a company becomes insolvent. But by placing the company in administration, directors are protected from further liability and the company can then efficiently carry out a reconstruction.

The chances of rehabilitating a company can be significantly improved if companies act at the earlier stages of financial distress.

Putting a company into administration is a finely balanced decision but at the end of the day, erring on the side of being proactive can allow the directors to preserve a measure of control over the company’s destiny and enhance their chances of saving it through a reconstruction that can mean the difference between liquidation and a new lease on life. u *Source: CPA Australia: Audit Reports in Australia 2005 – 2013: Preliminary findings (September 2014) ABOUT THE AUTHORS Antony Resnick is a Principal of BRI Ferrier and is a Registered and Official Liquidator with 22 years’ experience attained internationally in a variety of industries Gavin Robertson is a Principal of M+K Lawyers with particular expertise in mergers and acquisitions, corporate finance and governance.

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19

45%

Credit Management

45%

Veda National Credit Manager’s Survey

45% 45%

27%

27%

Since the GFC Veda’s National Credit Manager Survey has provided valuable insights into credit risk management practices. The key findings from the 2014 Survey are summarised below: 45%

KEY FINDINGS

27% 27%

Economic conditions have affected business sentiment, with a majority of credit managers reporting a negative impact from general economic conditions to their business 27%

27% 27%

That left a net balance of 27% of participants reporting an increase in the number of credit 27% applications over the past 6 months, a strong rise in demand compared with a net balance of only 13% in 2013

86% of credit managers consider default information to be either very important or critical when making a decision to extend credit, up from 73% in 2013. At the same time, the proportion of participants willing to provide credit when an adverse is present has fallen to 34%, the lowest level seen in three years

The introduction of changes to the Privacy Act have had minimal impact on how new credit risk is assessed

27% 27%

45% 45%

DSO

Credit managers have tightened credit policies in DSO response to economic conditions, although this is expected to relax in the next six months

DSO

There has been an overall improvement in Days Sales Outstanding (DSO) performanceDSO with the average DSO at 43.89, compared with 44.91 in 2013

20

EDR

82% of participants feel that DSO membership of an external DSO dispute resolution (EDR) scheme should not be mandatory, while DSO 75% express some level of interest EDR in joining an EDR scheme that has a DSO primary focus on privacy issues only

EDR

45% 45%

Despite poor business conditions, the number of credit applications has risen for 45% of credit managers and has fallen for EDR only 18% of credit managers over the EDR past year. This compares to 40% and 27% in last year’s survey, for rises EDR and falls in credit applications respectively

45 Payment terms have become shorter compared with last year’s survey, with average payment terms estimated at 30.61 days in 2014, compared with 33.65 days in 2013

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

DSO

MANAGING CREDIT

EDR

EDR

There has been a substantial improvement in expectations of future economic conditions, with 27% of participants expecting a positive impact compared with only 16% in last year’s survey

45%

60% of participants feel the introduction of the Personal Property Securities Register (PPSR) has benefited their business and a higher percentage of credit managers are now using the PPSR

%

Economic conditions are affecting the demand for credit and are having an impact on credit management processes.

In 2013, the generally negative economic backdrop of the previous 12 months appeared to be slowing the growth in credit applications, but different economic conditions across industries and regions had differing influences on the demand for credit.

The economic backdrop has improved over the 12 months preceding the 2014 survey, although economic conditions continue to present challenges to many businesses. This means that the management of credit outstanding is of critical importance. Participants reported that the frequency of account reviews has remained broadly unchanged from last year.

On balance, Day Sales Outstanding (DSO) has improved for many

Credit Management

participants over the past year, almost to the levels reported in 2012, with most participants reporting little change. This is in contrast to 2013 where, on balance, DSO deteriorated.

Demand for credit Survey participants reported varied conditions when it came to the demand for credit. The survey results revealed that: zz the demand for credit was rising for 45% of respondents, up from 40% in 2013; zz the demand for credit was falling for 18% of respondents, down from 27% in 2013; and zz 37% reported a neutral change in the demand for credit, up from 33% in 2013.

That left a net balance of 27% of participants reporting an increase in the number of credit applications over the past six months, a strong rise in demand compared with 2013.

As such, the survey results suggest that economic conditions are now having a more uniform impact for firms and households across the economy – compared with last year’s survey, fewer participants saw a decline in credit demand, while more participants are now seeing a rise in credit demand.

However, varied conditions are still evident within industries with some businesses seeing an increase, and some a decrease. On balance, businesses in the construction, finance and insurance, wholesale trade, retail trade, and manufacturing industries reported seeing an increase in the number of credit applications over the past six months, while some industries with a small number of respondents reported seeing a decrease, including agriculture, utilities, government, and property and business services industries.

This improvement in credit demand was seen across most major industries, with the net balance of participants reporting an increase in credit applications in the construction, finance and insurance, manufacturing, mining, retail trade, Chart 5.1 and wholesale trade industries. The net balance reporting changeof increased in all ofreporting these Chart 5.1:a positive Net balance participants an industries for mining, compared with last year’s increase except in credit applications survey.5.1 Chart

Chart 5.1: Net 2014 balance of participants reporting an 2013

Chart 5.1: Net balance of participants reporting an increase increase in credit applications 50% 50 in credit applications 40 2014

2013 30%

30 50 20 40

30%

2013 31%

6%

2014

18%

13%

12%

6%

-10%

-20 0

-15%

Construction

-10

30%

26%

22%

-10 10

20

50%

18%

13%

12%

10 30 0 20

20

31%

30%

26%

22%

C in m Ch in mo

-20 Construction

Finance Manufacturing and Insurance -10%

Retail trade

Wholesale trade

Mining

-15%

Finance Manufacturing and Insurance

Retail trade

Wholesale trade

Mining

These results are broadly consistent with what Veda has seen on its bureau. Following a fall in trade credit enquires in late 2013, growth in the number of trade credit enquires picked up in early 2014, with growth in trade credit enquiries still remaining positive in mid-2014.

Chart 5.2: Change in the number of credit applications Chart the 5.2: Change the number of credit applications over over last sixinmonths the last six months

Chart 5.2: Change in the number of credit applications 7% Significant over the last six months 2013

C si

Ch six

30

4%

decrease

2014 Moderate Significant decrease decrease

The economic backdrop has improved over the 12 months preceding the 2014 survey, although economic conditions continue to present challenges to many businesses.

20%

7%

14%

4%

Neutral Moderate decrease Moderate increase Neutral

Significant increase

Chart 5.1

Chart 5.1: Net balance of participants reporting an increase in credit applications It is also informative to consider the change in the net 201320132014 results from to 2014. The net proportion of survey 50% 50 respondents reporting an increase in credit applications 40 from 13% in 2013 to 27% in 2014. This suggests that the rose 31% 30% 30 extent to 30% which the demand 26%for credit is rising has gained 22% 20 momentum since the last survey, when averaged across all 18% 13% 12% survey respondents.

10

2014 33%

20%

37%

14%

29%

Significant Moderate increase increase

11%

10

33%

35% 37%

20

11%

30

40

Chart 5.3: Net balance of those reporting an increase 0 balance 10 of applications 20 in the5.3: number of credit over the last six Chart Net those reporting an30 increase in40 the months of (%) number credit applications over the last six months (%)

13%

2014

27% 0

10

20

30

6%

0 -10

-10%

-20 Construction

-15% Finance

Manufacturing

Retail

Wholesale

Mining

50

2

35%

10%

2013

100

29%

10% 0

10 300

2013

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

21

1%

ng

ex

2014

27% 0

10

%

20

a o

30

Reflecting the broad nature of survey participants, around one third of participants have opened less than 50 accounts in the last six months, while a further 46% of participants opened between 50 and 500 accounts.

The remaining 21% of participants opened more than 500 accounts in the last six months.

This is broadly similar to the 2013 survey, although there are now slightly more organisations opening between 50 and 500 accounts, and slightly fewer opening more than 500 accounts in the last six months.

Chart5.4: 5.4:Amount Amount of new accounts opened the Chart of new accounts opened in thein last sixlast six months months

cations

37%

13%

2013

Credit Management

Chart 5.5: The importance of default information when

Chart 5.5: The importance of default information when making a decision to extend credit making a decision to extend credit 34%

Critical

39%

Very important

47%

22%

Important

10% 4% 2%

Slightly important

14% 7% 3% 8% 11%

251 to 500

11% 11%

151 to 250

9%

40

7%

101 to 150

8%

30

40

50

considered as important when considering Chart 5.6: Type of default or adverse information considered extending credit as important when considering extending credit

12%

51 to 100

17% 33%

1 to 50

4%

Other

33% 0

5

10

15

20

25

30

35

Chart 5.5: The importance of default information when making a decision to extend credit

Importance of default information

Default information continues to be very important when 34% making a decision to extend credit.

Critical 39% In the 2014 survey, 87% of participants reported that 39% Very default information was either very important or of critical important 47% importance when making a decision to extend credit, with a 22% Important further 10% reporting 10% it as important.

There has been a substantial increase in those 4% Slightly important 2% considering default information to be either very 2013 important or of 1% critical importance. Compared with the Not 2014 1% important 2013 survey, 73% of participants reported that default 0 10 20 with 30 50 information met these criteria, a further40 22% reporting it as important. Some credit managers noted that default information is being used as a preventative measure to help manage additional risk. The increased importance of default information is consistent with elevated perceptions of risk amid the difficult economic conditions still prevailing.

22

20

In terms of the type of default or adverse information considered as important to the credit decision process, external administration or bankruptcy, director or proprietor default, court writs and actions, and company/ business default, were all felt to be important by survey respondents.

Every year, survey participants have continually reported the importance of each type of default or adverse information, and responses have varied by only a small amount. Almost all participants indicate that every type of default or adverse Chart 5.6: Type ofinformation default or is important. adverse information

2%

501 to 1000

10

2014

4%

1001 to 3000

2014

1%

2013

4%

3001 to 5000

2013

1%

Not important 0

5% 5000+

bu 39%

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

External administration or bankruptcy

96%

Director or proprietor default

86%

Court writs and actions

98%

Company/ business default

94% 0

20

40

60

80

100

The 2014 survey reveals that the proportion of participants who would provide credit if there was an adverse present was at 34%. Over the previous three years, the proportion of participants providing credit in the presence of adverse increased significantly from just above 30% in 2011 to 51% in 2012, and to 64% in 2013. The proportion of participants willing to provide credit when an adverse is present has therefore fallen to the lowest level seen in three years. This is a reflection that credit policies have continued to become tighter in 2014, and is consistent with higher perceptions of risk among credit managers as well as the increasing importance being placed on default information reported earlier.

25%

60 days

27%

Credit Management

30 days

Chart 5.7 Chart 5.7: Providing credit when an adverse is present 70

64% 60

51%

50 40 30

34%

31%

16%

14 days

Chart 5.7: Providing credit when an adverse is present

73%

24%

7 days

19%

from 44.89 in 2011 or to less43.22 in 2012. In 2013, 22% the average number of DSO increased to 44.91. In 2014, the average 24% Nohas terms number of DSO subsequently reduced to 43.89. /COD 34% This improvement may be reflective of some improved economic conditions for some businesses recently.

It 0 20 40 60 may also be a reflection of the finding reported earlier Chart 5.9applications are now being approved when an that fewer adverse is present.

Chart5.9 5.9: Average current DSO Chart

80

performance (days) Chart 5.9: Average current DSO

20

Chart 5.9: Average current DSO performance (days)

10

47

performance (days) 47

0

45 45

2011

2012

2013

44.91%

44.89%

44.91%

44.89%

2014

41 41

Payment terms Most organisations request 30 days for payment.

81% of organisations represented in the survey provide 30 day payment terms, 27% request payment in 60 days, and 58% operate with COD or other payment terms. The average payment term, as weighted by the responses shown in Chart 5.8 and factoring in non-standard responses in the other category where possible, was estimated at 30.61 days in 2014 compared with 33.65 days in 2013. This suggests that there has been an increase in the number of credit managers requesting shorter payment terms, reflecting the tightening of credit policies over the past six to 12 months.

The survey results show that the standard payment terms for most credit managers remains 30 days.

Chart 5.8: Payment terms offered 26%

Other

43.89% 43.89%

43.22% 43.22%

43 43

2013

24%

2014

39

Cha perf

39 37

37 2011

2012

2011

2013

2012

Deg ROT

2014

2013

2014

Indeed, the survey findings on the proportion of participants reporting a change in DSO are also consistent with an overall improvement in DSO performance in 2014.

The proportion of participants reporting deterioration in their DSO activity fell by 11 percentage points in 2014 while there was an increase of seven percentage points for those reporting an improvement, compared with 2013. The changes in the 2014 survey suggest that, on balance, DSO performance improved in 2014.

Dol

Bad a

Accou e.g

O

Chart 5.10: DSO change over the past six months (%)

Chart 5.10: DSO change over the past six months (%)

25%

60 days

27%

29%

73%

30 days

Deteriorated 2013 Chart 5.10: DSO change over the past six months (%) 18%

81%

2014

16%

14 days

19%

Improved

26%

24%

7 days or less

19% 22% 24%

No terms /COD

Improved

20

40

60

80

52% 56%

18% 0

34% 0

29%

No Deteriorated 10

20

30 19%

2014 40

50

60

26%

100

52%

No Key indicators of payment performance

DSO activity Average DSO amongst survey participants has improved over the past year, almost returning to the levels seen in 2012.

DSO showed an improvement in 2012, decreasing

2013

56%

As in previous years, DSO is still the most commonplace 10 20 30 This is40 KPI for account0 receivables performance. closely 50 followed by past overdue, and accounts in each period. In 2013, bad and doubtful debts was the third most important KPI, although the importance of accounts in each period has increased substantially.

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

23

60

Credit Management

Chart 5.11: 2013 2013KPIs KPIsfor foraccount account receivables/payment Chart 5.11: receivables/payment performance (%) used ASIC information; performance (%)

89%

Degree to which your ROT security interests

3%

87% Other

4%used

company or business credit reports;

Chart 5.12: Information types used to make decisions Chart 5.12: Information types used to make decisions about about creditfor policies for new customers (%) credit policies new customers (%)

12% 34%

Dollars in each period

86%

Bad and doubtful debts Accounts in each period e.g. current, 30 days, 60 days, etc.

Proprietor or director financial information (e.g. income, expenses)

used information from an 51% application form; and

Past overdue

71% 0

s (%)

used directors/proprietors histories and their other business relationships.

10 20 30 40 50 60

66% 69%

4

The types of information most frequently used by survey participants in their credit decision-making process were as follows:

% 56% 60

89%

2013 2014

32% 28% 38%

Property and assets of the company/business

33% 41%

PPSR grantor search results

35%

70

Types of information used to help make decisions about credit policies

3

30% 24%

Property and assets of the proprietor or director

61%

Day Sales Outstanding (DSO)

that the changes to the Privacy Act have caused the decline in the importance of director information. This change will need to be monitored closely over the coming year.

Company or business financial information (e.g. revenue, profit, expenses, etc.)

49% 48% 54%

Credit scores

61%

Trade payment information/references

56% 66%

Directors’ / proprietors’ credit histories and their other business relationships

75% 71% 84%

used ASIC information;

Information from an application form

86% 82%

Company or business credit reports

87% 80%

ASIC information

87%

used company or business credit reports;

89% 0

20

40

60

80

100

Chart 5.12: Information types used to make decisions about credit policies for new customers (%)

Account reviews

86%

used information from an application form; and

71%

used directors/proprietors histories and their other business relationships.

Proprietor or director Account review frequency 30% financial information 24% broadly (e.g. income, expenses) Account review frequency has remained unchanged from 2013. In 2014, 27% of respondents 32% Property and assets of conducted reviews of accounts, 12% conducted the proprietor annual or director 28% quarterly reviews, and 7% conducted bi-annual reviews.

38% Property and assets of 55% credit managers conduct reviews at the request theof company/business 33% of the customer, or have some other review arrangement.

41% PPSR grantor These proportions were similar to those in 2012 and 2013. search results

2013 2014

35%

Chart 5.13: When Company or to complete account reviews (%)

49% Chart 5.13: When to complete account reviews (%) business financial

In addition to those key information types, the results showed that credit managers also used a broad range of other information types in their decision making.

These results have generally remained similar to prior years. However, ASIC information and credit scores have become increasingly important in the last two years, up 13 percentage points and 17 percentage points since 2012, respectively. Directors’ or proprietors’ credit histories and property and assets of companies have become less important, down 10 percentage points and eight percentage points since 2012, respectively. It is possible

48%

information (e.g. revenue, profit, expenses, etc.)

54%

At customerCredit scores request /Other

54% 61% 55%

Trade payment Annually information/references

56%

24%

Directors’ / proprietors’ 5% credit histories and Bi-annually their other business 7% relationships Information from Quarterly an application form

Cha

66%

27%

75% 71%

2014

12%

0 10 Company or business credit reports

20

84% revie

2013

17%

30

40

50

60

86% PP new r 82% again

87% Score 80%

ASIC information

24

89% pay

CREDIT MANAGEMENT IN AUSTRALIA • December 2014 0

20

40

60

Account review frequency has

80

100

5%

Bi-annually

7% Chart 5.13: When to complete account reviews (%) 17%

Quarterly

At customer request/Other

2013 2014

12% 0

10

20

30

40

54%

50

I do not use triggers to review accounts

4%

PPSR alerts on new registrations against a grantor

9%

60 55%

24%

2014

Credit Management

8%

11%

Score movement

Annually

2013

7%

10%

Chart 5.14: 18% to review accounts Trade Triggers used

27%

Chart 5.14: Triggers used to review accounts payment report 21%

5% 7%

Account review frequency has remained broadly unchanged 17% Quarterly 12% from 2013.

Bi-annually

0

10

20

30

40

2013 2014

50

60

Triggers for reviews Past due is the main trigger for conducting reviews.

80% of survey participants reported that a trigger used Account review frequency has to review accounts is when they are past due, while broadly unchanged 65%remained reported the use of external alerts such as external administration or court action, and 65% reported the use of from 2013. amount outstanding.

While the top three triggers for conducting reviews remained the same from last year, some changes were recorded in how common it was for particular triggers to be used. Notably, more participants reported using amount outstanding (up from 54% to 65% of participants), while more participants reported using past due (up from 71% to 80%) as triggers. u

I do not use Other triggers to review accounts

34%

4% 7%

PPSR Amount alerts on new outstanding registrations against a grantor External alerts e.g. external Score movement administration, court actions

2014 54%

8%

65%

9%

63%

11%

65%

10%

71%

18%

PastTrade due payment report

Other

2013

27%

80%

21% 0

20

4034%

60

80

100

27%

Amount outstanding

54% 65%

External alerts e.g. external administration, court actions

63% 65% 71%

Past due

80% 0

20

40

60

80

100

The full survey can be found at www.creditnetwork.com.au

Connect with credit professionals online when ever you need support or info.

Access a world of resources for credit professionals.

See photos & presenter slides from the AICM National Conference.

creditnetwork.com.au

Proudly sPonsored by

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

25

Privacy

Privacy Awareness

By Debra Kruse and Michael Hartman

Debra Kruse

In Brief: Recent changes to the Privacy Act The Privacy Amendment (Enhancing Privacy Protection) Act 2012 was signed into law on 12 December 2012 – and the changes made by that Act commenced on 12 March 2014. It was the most significant reform of the Privacy Act 1988 since the privacy regime was extended to cover private sector businesses in 2001.

The 10 National Privacy Principles were replaced with 13 Australian Privacy Principles (APPs). In addition, the regulator (the Privacy Commissioner) has published extensive legally binding APP guidelines. With respect to “credit reporting”, the provisions in Part IIIA of the Privacy Act which deal with “credit reporting” have been completely replaced with a new Part IIIA that enables a more “comprehensive” credit reporting system and imposes more restrictions and obligations on credit providers (which includes trade credit providers), credit reporting bodies and others who deal with credit related information (such as debt collectors). A new legally binding Credit Reporting Privacy Code (CR code) has also been published.

In addition, the changes introduced a significant new civil penalty regime and the regulator, has been given significant additional powers, including the power to accept and enforce Enforceable Undertakings.

Key changes: the APPs

Michael Hartman

26

Privacy by design: APP 1 introduces a positive obligation for businesses to take reasonable steps in the circumstances to have and implement practices, procedures and systems that will ensure compliance with the

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

APPs and enable them to deal with inquiries or complaints about their compliance. This is often referred to as “privacy by design”. Businesses may be able to demonstrate this, for example, by developing and maintaining training programs, staff manuals, standard procedures and other relevant documents that demonstrate awareness of, and compliance with, their obligations.

Businesses should also be able to demonstrate that their systems, such as their data management systems, will enable them to comply with their obligations.

This requirement for an internal framework is perhaps the biggest change and the one most often overlooked.

In addition to the internally documented practices, businesses must update (and make publicly available) a clearly expressed external privacy policy about their management of personal information (and it must be kept up-to-date policy)..

One way to think of this, is that your external privacy policy explains to the public and your customers what you will do to protect their privacy. On the other hand, your internal framework tells your staff how your privacy compliance program will be implemented, monitored and managed.

New potential liability for overseas disclosures: There are new restrictions on disclosing personal information to overseas recipients (which includes allowing someone overseas to access personal information that resides on systems located in Australia). Businesses may be deemed to be responsible for (and held liable for) any breaches by overseas recipients.

Privacy

Increased notification obligations: When collecting personal information (whether directly from an individual or from a third party), businesses must take reasonable steps in the circumstances (if any) to notify additional matters to individuals – or to otherwise ensure individuals are aware of the additional matters. These include information about the business’ access, correction and complaints processes (replicating much of what is contained in their external APP privacy policy), and also the location of any likely overseas recipients of individuals’ information.

Direct marketing: There are additional restrictions and conditions on direct marketing. These include telling the individual, if they request, the source of their information used to direct market (when the information is not collected directly from the individual – for example, when businesses buy marketing lists) and conditions relating to opt-out mechanisms.

Corrections: There are new obligations in relation to correcting personal information if either the business is satisfied that the information is inaccurate, out-of-date, incomplete, irrelevant or misleading, or the individual requests correction.

A business must notify others (that it had previously provided the personal information to) of any correction if the individual asks them to.

Key changes: Part IIIA and the credit reporting system Personal information in the context of commercial credit: The new Part IIIA applies to credit providers, including commercial lenders and trade credit providers who provide credit to individuals (sole traders, partners, trustees) or who take guarantees from individuals for credit provided to someone else (for example, a director’s guarantee for credit provided to a company).

Access to consumer credit history: The types of consumer credit related information that can be held by a regulated credit reporting body has been expanded. If a commercial lender or trade credit provider wants to access an individual’s consumer credit history (from a regulated credit reporting body) to assist in their commercial lending decision, the lender or trade credit provider will be subject to all of the restrictions in Part IIIA that include highly prescriptive rules about the collection, use and disclosure of credit related personal information by and to credit providers and credit reporting bodies.

We’ve got you covered

From both a reputational and regulatory risk perspective it is important you understand the privacy management practices of those from whom you obtain credit reports. In particular, you need to understand if any consumer credit history (including information derived from such information such as credit scores) is included in credit reports that you get.

If so, certain obligations will apply to your handling of that information.

Privacy by design: Similar to APP 1, Part IIIA introduces a positive obligation for commercial lenders and trade credit providers to take reasonable steps in the circumstances to have and implement practices,



Under recent privacy law reforms, credit providers who want access to consumer credit reports must join an external dispute resolution (EDR) scheme recognised by the Office of the Australian Information Commissioner (OAIC).

The Credit Ombudsman Service Limited (COSL) has been recognised by the OAIC. An exemption from the EDR requirement until 11 March 2015 has meant that commercial credit providers have not had to join an EDR scheme. With that date fast approaching, commercial credit providers should be considering their next steps. Any commercial credit provider can join COSL. If your core business is not related to financial services, we can also offer you a tailored membership option at a capped fee. The types of complaints we can deal with is also limited to privacy-related complaints.

Contact us for further information.

02 9273 8455 www.cosl.com.au

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

27

Privacy

procedures and systems that will ensure compliance with Part IIIA, the new Credit Reporting Code of Conduct and the Regulations made under the Privacy Act and enable them to deal with inquiries or complaints about their compliance.

In addition to the privacy policy required under APP1, commercial lenders and trade credit providers must have a clearly expressed and up-to-date “credit reporting policy” about their management of credit related personal information (this can be combined with the APP1 privacy policy) Mandatory EDR scheme membership: This is a new requirement. From 12 March 2015, a commercial lender or a trade credit provider will need to be a member of a recognised external dispute resolution scheme (EDR scheme) to get consumer credit reports from regulated credit reporting bodies.

A temporary exemption from this requirement is currently in place as a result of an exempting Regulation, but will expire on 12 March 2015 unless a further Regulation is made prior to that date that has the effect of making the exemption permanent.

It is not yet clear whether a permanent exemption will be granted, so it may be wise to consider registering your interest to become an EDR scheme member sooner rather than later, as there may be a last minute ‘rush’ of applications if the final decision is that a permanent exemption will not be put in place.

AICM members were recently advised that Raj Venga, CEO and Ombudsman of the Credit Ombudsman Service Limited (COSL), has announced an offer of “Commercial Privacy Act Participant” membership category for AICM members who provide commercial credit, but whose core business is not the provision of financial services. This will apply to businesses that extend “trade credit” terms in connection with their core business of providing goods or services. The offer from COSL will enable those businesses to become members of COSL for a fixed annual cost of $850 (inc GST) in the first year, and $650 (inc GST) annually thereafter. There will be no additional COSL costs for handling complaints made. You can register your interest in this offer at https://www. surveymonkey.com/s/AICMCOSL1 Additional notifications obligations: In addition to the requirements of the APPs, commercial lenders and trade credit providers must also notify individuals of other matters, or otherwise ensure individuals are aware of those matters, which generally replicate the matters set out in their “credit reporting policy” about their collection and handling of credit related personal information. When a commercial lender or trade credit provider intends to get a consumer credit report, the individual must be notified of (or otherwise made aware of) the name and contact details of the relevant credit reporting body.

If a court finds that a business has breached a civil penalty provision, any individual affected by that breach can apply to the court for compensation for any loss or damage suffered (which can include injury to the individual’s feelings or humiliation, in addition to monetary loss).

28

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

Access, corrections and complaints: There are increased obligations (over and above the APP requirements) that apply to access, corrections and complaints with respect to certain credit related personal information. The main feature of the new correction and complaint provisions is the ‘firstcontact” obligation, where the obligation to resolve a correction request or complaint lies with the first credit reporting body or credit provider that the individual contacts.

Audit: Credit reporting bodies have an obligation to monitor and audit their customers’ compliance with key elements under Part IIIA.

Key changes: penalties and powers Civil penalty: The Federal Court, hearing proceedings brought by the Privacy Commissioner, will have the power to impose civil penalties of up to $1.7 million for a breach by a corporation of specific provisions of Part IIIA or, more generally, for serious or repeated interferences with the privacy of an individual under the APPs. Compensation: If a court finds that a business has breached a civil penalty provision, any individual affected by that breach can apply to the court for compensation for any loss or damage suffered (which can include injury to the individual’s feelings or humiliation, in addition to monetary loss).

Assessments: The Privacy Commissioner can conduct an assessment of whether personal information held by a business is being managed and maintained in according to the APPs and Part IIIA (which includes the Credit Reporting Code of Conduct).

Investigations: The Privacy Commissioner can initiate and conduct investigations of a business’s compliance with the Privacy Act on its own initiative or as a result of a complaint made by an individual.

Privacy

At the conclusion of an investigation, the Privacy Commissioner can make determinations that include ordering compensation to individuals and ordering a business to take specific action to prevent further repeats of the acts or practices investigated.

Enforceable Undertakings: Significantly, the Privacy Commissioner can accept Enforceable Undertakings from businesses that they will take, or refrain from taking, specific action to ensure compliance with the Privacy Act, or to ensure that, in the future, they do not interfere with the privacy of an individual. The undertakings are enforceable by the Privacy Commissioner on application to the Federal Court.

Note: There is no mandatory obligation to report data breaches to either individuals or to the Privacy Commissioner – yet. A Bill was tabled in tabled in May 2013 to make breach reporting mandatory. The Bill lapsed when the federal election was called. However, there appears to be bi-partisan support for the Bill and it may be re-introduced into parliament and passed in the not too distant future. u

Credit Managers: what you should do now As a result of the changes to the Privacy Act, credit managers should consider whether their credit application and privacy notice documents meet the new requirements. For example, if you obtain reports about individuals (credit applicants or their guarantors) from credit reporting bodies that include any information about the individual’s consumer credit activities (or any information derived from consumer credit activities, such as credit scores), do your consents meet the regulatory requirements?

Some other things to consider, (even if you don’t obtain any consumer credit reports) - does your credit function have: l external policies and notifications that meet the required transparency standard?; l internal policies and procedures to ensure that

This briefing was prepared by Debra Kruse and Michael Hartman, Principal Consultants, Inflexion Point Consulting.

your use, disclosure and protection of personal information meet the regulatory requirements?

And what about beyond the credit function?

www.inflexionpoint.com.au You can contact Debra at dkruse@ inflexionpoint.com.au, or Michael at mhartman@inflexionpoint.com.au

The new Privacy Act requirements generally apply to all personal information collected and held by businesses. Do other functions in your business

FOOTNOTE: 1. Registration of interest does not commit you to membership. Your registration will be followed up in early 2015 if it becomes clear that the temporary exemption will not be extended.

have appropriate measures in place to meet the new requirements?

Complying with the Personal Property Securities Act? Are you really sure?

As Australia’s only National PPSA advisers (it’s all we do), EDX understands the implications of the PPSA for you and your business.

We offer practical, no nonsense advice on how to deal and comply with the PPSA. Of the many compliance reviews we’ve performed, more than 95% fail to appropriately or completely comply with the PPSA. At best this may limit the scope of the security interest and at worst invalidate the security interest altogether.

EDX’s PPSA Compliance Reviews are designed to review your PPSA policies and procedures and to identify anomalies in your application of the PPSA. If you think you’re complying try our Free Desktop Compliance Review – we’ll conduct a high level review of your registrations and let you know how compliant you really are.

To request a Desktop Review or further advice on the PPSA please contact our National Office on – (03) 9866 4559 or through our website www.edxppsr.com.au

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

29

PPSA

The six reasons

By Kim Powell Many businesses are reluctant to register all their customers on the PPSR, due to cost. The reluctance may increase if they need to register multiple security interests against each customer to obtain the desired level of protection.

This is understandable; if you have 5,000 customers, each requiring dual registrations, the Registrar’s fees alone are $80,000 for 7 year registrations – and more if you opt for a longer period. A typical response is to select a credit limit and only register customers with a higher limit, or actual exposure.

If this is your policy, there are 6 reasons to reconsider. Let’s work through an example where the business has chosen not to register against any customers with a credit limit of less than $30,000.

1. Overtrading – it is well known that overtrading is a primary cause of insolvency. The customer with a $25,000 limit manages to get $75,000 of goods before being placed on stop credit. Six weeks later the company goes into administration. It is no use

Kim Powell 30

trying to register when you start to get worried about the account.

If your customer is using your goods as inventory you lose the super priority of your Purchased Money Security Interest (PMSI) for all goods delivered prior to registration. If your customer is not using your goods as inventory, you would still only get the PMSI priority for goods delivered during the 15 business days prior to registration on the PPSR. 2. The “6 month rule” – most people are unaware that the Corporations Act was changed to take account of the PPSA, to prevent companies with knowledge of imminent insolvency fraudulently granting security to related or preferred parties. The rule can also catch the innocent. The (abridged) rule is that if (i) you register your security interest more than 20 business days after the security agreement is created and (ii) your customer becomes insolvent within 6 months of registration then your security interest will vest in the insolvent company. In other words, you will lose your goods. This means that if you delay registration until you become concerned about your customer, you are taking on a 6 month risk with your highest risk customer on the other side.

3. The hidden cost of monitoring – if you do decide on credit limits as your registration criteria, someone in your organisation has got to monitor this. You may have to redesign your business processes to tightly monitor your sales team so that customers cannot go above their limit. There may be a direct cost in lost sales and there is certainly the hidden staff costs of monitoring the credit limits in this way. And in any event, doesn’t your staff have better things to do?

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

4. The scourge of unfair preference claims – your team has done a fantastic job and collected lump sums on account from your customer in the months leading up to liquidation. It is then that the liquidator comes knocking to claw some of that money back under the unfair preference regime in the Corporations Act. If the claim is for $30,000 or less, it is probably not worth fighting in court. A properly registered security interest is a very good line of defence.

5. And then there are “shoot throughs” – businesses with a “long tail” of low value debtors will be well aware of businesses which sell their assets and disappear without settling their debts. Even if the location of the proprietor is known, it is often not economic to pursue him/her. This is where registration can sometime provide an unexpected benefit. If the business is being sold it is common practice for the purchaser’s solicitor to complete a PPSR search to see if the business assets are encumbered. If your interest is disclosed, the vendor has no choice but to approach you with a discharge request – which you will gladly provide on full settlement of your account.

6. Ledger integrity – is a task often left until tomorrow (which never comes). Everyone knows that having accurate legal names for customers and signed terms of trade is best practice and increases the chance of successful legal action against slow payers. But it is a task we often put off, particularly for businesses with large ledgers and mature companies who have been trading for many years.

There may soon be no choice. As Australia’s concern with terrorism increases it is likely that the scope

PPSA

of anti-money laundering and counter terrorism initiatives will be broadened to include many more companies. At that point “knowing your customer” will become mandatory. Why wait for the inevitable? Your PPSR project requires you to have accurate customer details and your ledger integrity will be greatly improved as a result.

Please do not think, “It won’t happen to me.” The following example demonstrates the risks of relying on credit management alone, rather than the PPSR.

was otherwise pretty good at credit control. The customer had been placed on “stop credit” and a payment was offered to secure the next delivery. The goods had been delivered and had not even been cleared from the loading dock when receivers were appointed. The cheque was dishonoured, the vendor could not get any goods back and was understandably annoyed.

Regrettably, they had no one to blame but themselves. To make matters worse, if the customer now goes into liquidation, there is the risk of earlier lump sum payments being clawed back as preferences.

Risky business: A true story We had one very frustrated business approach us after losing out twice with the same customer.

The business had failed to register against its customer, but

Striking the right balance If businesses wish to achieve a higher level of protection after reading this, there is normally some remedial work that will be necessary on existing

customers, particularly to overcome the adverse impact of the “six month rule”.

There will always be risk in business and good credit management is all about managing the risk involved in extending credit.

The PPSA can be an excellent risk management tool if used properly.

We hope this article will be of some assistance when deciding your registration policy. u ABOUT THE AUTHOR: Kim Powell is co-founder of EDX a national firm specialising in PPS registration and consulting. EDX has its roots in New Zealand where similar legislation was enacted in 2002. In his earlier career, Kim has been an insolvency practitioner, headed the commercial credit recovery division of a major bank, as well as a period as a business banker advancing funds on a secured basis.

This background made the PPSA a natural area of interest. Kim moved to Australia in 2010 to lead EDX’s entry in to the local market and is based in Melbourne Contact Kim: kim.powell@edxppsr.com.au or 0410 475 100.

Market leading legal

Trade CrediT

SpecialiStS legal Recovery Disputed Debts privacy act advice credit agreements ppSa claims & advice preference Defences

australia Wide legal recovery

coMMercial disputes

insolvency law

resultslegal.com.au 1300 757 534

AustrAliA wide

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

31

PPSA

Personal Property Securities and bailments, consignments and a receiver’s lien

By Leigh Adams

One of the requirements for a bailment to be a PPS lease is that the bailor must be regularly engaged in the business of bailing goods.

Leigh Adams

32

The recent case of Re Arcabi Pty Ltd; ex parte Theobald [2014] WASC 310, is an interesting insight as to how the Courts will interpret the interaction between the rights of secured creditors under the Personal Property Securities Act 2009 (the Act) and the rights of an external controller to a lien over property (whether or not the subject of such a security). It also clarifies the application of the Act to bailments and consignments.

Facts Arcabi stored and sold rare coins and bank notes (Goods). They were stored in Albany WA (the Premises). The Goods were owned by third parties (Investors).

Arcabi defaulted on its loan from Westpac (the Bank) and the question for consideration was whether the Bank’s receiver could take the Investor’s Goods and sell them and apply the proceeds to reduce the indebtedness of Arcabi to the Bank.

The Goods were of two types.

Firstly “Mixed Storage Goods”: the arrangement here was that these Goods were stored only, and the Investors owning the Mixed Storage Goods were charged a storage fee and issued with an invoice.

The second type were “Consignment only Goods”. These Goods were part of an arrangement between Arcabi and some Investors whereby the Investor in each instance requested Arcabi to sell the Goods on consignment to third parties.

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

Bailment The Court concluded that the arrangement in relation to the Mixed Storage Goods was a bailment. By way of background, a bailment is where a bailor delivers goods to a bailee upon a promise, express or implied, that they will be delivered back to the bailor, or dealt with in a stipulated way. If the bailment secured payment or performance of an obligation, then it gave rise to a security interest under s 12 of the Act and enlivened the operation of its priority provisions.

The Court accepted that there are four factors indicative of a bailment arrangement securing payment or performance of an obligation, those factors being: (i) Where the bailment provides that the ownership of Goods would vest in the bailee on the expiry of the bailment; (ii) Where the bailee would have an option or obligation (at any time) to purchase the Goods; (iii) Where the term of the arrangement was likely to be for the major part of the economic life of the Goods; (iv) Where the minimum payments under the bailment amount substantially to the cost of the Goods.

None of these indicia applied in this case.

But if the bailment was a PPS lease under s13, then it would be deemed to give rise to a security interest, and the provisions of the Act would therefore apply.

One of the requirements for a

PPSA

bailment to be a PPS lease is that the bailor must be regularly engaged in the business of bailing goods.

However, the Investors were not regularly engaged in the business of bailing goods. They were in the business of profiting from the exchange of rare coins and bank notes.

The issue of the bailment was merely incidental to this main purpose.

Consignment The Court then turned to the Consignment Only Goods. Generally, consignments are to be distinguished from retention of title (RoT) arrangements. RoT arrangements provide for title to pass only when full payment has been received. RoT arrangements do secure payment or performance of an obligation.

Nevertheless, if the consignment in substance secured the payment or performance of an obligation, then the operation of the priority provisions of the Act would be enlivened.

The Court looked at the 15 indicators relevant to determining whether a consignment exists. They are: (a) the merchant is the agent of the supplier; (b) title to the goods remains in the supplier; (c) title passes directly from the supplier to the ultimate purchaser and does not pass through the merchant; (d) the merchant has no obligation to pay for the goods until they are sold to a third party; (e) the supplier has the right to demand the return of the goods at any time; (f) the merchant has the right to return unsold goods to the supplier; (g) the merchant is required to segregate the supplier’s goods from his own; (h) the merchant is required to maintain separate records;

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December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

33

PPSA

(i) the merchant is required to hold sale proceeds on trust for the supplier; (j) the goods are shown as an asset in the books and records of the supplier and are not shown in the books and records of the merchant as an asset; and (k) the supplier has the right to stipulate a fixed or floor price.

The Court held that there was a consignment. But the consignment did not in substance secure payment or performance of an obligation because: (i) the Goods were not held as security for a debt as no moneys were payable by Arcabi unless or until it sold the Goods, but title by that time would have passed to the third party purchaser; (ii) if an item was not sold then title would remain with the Investor and there was no obligation on the part of Arcabi to pay the Investor; (iii) the Investor remained entitled to take back its consigned Goods – even in circumstances where all that was involved was a change of mind on behalf of the Investor.

Conclusion for bailments and consignments The Act did not apply and the Investors were allowed to keep their Goods, subject to some riders explained in more detail below.

The case confirms that businesses offering storage services including businesses storing for example, furniture for travellers, old & completed files for professionals, and other similar businesses like those running bus depots, or indeed retaining rare coins and notes of investors for subsequent sale, will likely not be subject to the provisions of the Act. It is interesting that the Court did not consider the meaning of “value” in s 13(3). Section 13(3) provides that a bailment is only a PPS lease (and therefore, a deemed security interest) if the bailee provides “value” and

34

...the long established legal principle that whenever an external controller is appointed, they have a right of indemnity out of the company’s property for their remuneration and expenses. value is defined in s 10 to include any consideration sufficient to support a contract. To be consistent with the Arcabi conclusion, “value” should just mean ‘money’. In the Arcabi case, it was the bailor who provided the money. The bailee provided the services. However, this issue is still unresolved for the time being.

Receiver’s lien The Court then considered whether the Receivers were entitled to an indemnity in the form of a lien over the Goods for the work undertaken by them in relation to the Goods.

The Court noted the long established legal principle that whenever an external controller is appointed, they have a right of indemnity out of the company’s property for their remuneration and expenses. These principles extend to an out of court receiver.

The Court also noted the Universal Distributing case which established that where an external controller expends a material part of his time and energy in recovering assets enuring for priority creditors, and where the controller’s duties must be performed before a surplus might arise to which the unsecured creditors may participate, then the cost of the work should be thrown upon the proceeds of the assets and even if no benefit to unsecured creditors eventuates, a lien is not denied to the controller.

On this basis, the Court held that the Receivers were entitled to an indemnity in the form of a lien over the Goods for their work despite the fact that a substantial amount of that

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

work related to identifying Goods which were eventually held not to be part of Arcabi’s assets.

The Court also held that the Receivers were entitled to an indemnity in respect to their costs and expenses in arranging insurance in relation to all Goods including those owned by the Investors.

As for any unclaimed Goods, the Court considered that the Receivers were justified in treating them as property of the Company to which their lien would attach if after appropriate advertising of the intended sale and writing to the relevant Investors, no relevant response had been received.

Conclusion for Receiver’s lien It is interesting that whilst the Court clearly accepted the principle that the Receivers were entitled to exercise a lien over the Goods of the Investors in respect to (i) their costs of and incidental to identifying those Goods and (ii) their costs and expenses referrable to insuring the Investors’ Goods, the orders only fully implemented this principle in respect to ‘(ii)’ but not ‘(i)’, in that the Receivers’ lien for ‘(i)’ was applied to the company’s assets (including Investors’ Goods which were unclaimed), but not to the Investor’s Goods which were claimed.

One can only presume from this result that there were enough funds available to pay the Receivers without having to further white-ant the equity in the Investor’s Goods. u Leigh Adams Lawyers North Sydney Ph: (02) 99640022

Development

Trust me. I’m the boss.

By Daniel Kehoe Trust is the basis of every effective workplace relationship, be it with your boss or the people you manage.

If the trust between people has died, then so has the relationship.

Trust is also a key component of being an effective leader. Some would say the most important component. It is difficult to get people to follow you if trust is missing.

Some of the key elements of being able to demonstrate trust start with the following.

The moment you don’t deliver as promised your credibility starts to come into question. So don’t make wild promises.

Respect the rights of all people.

Do this by listening to them and acknowledging their point of view. You may even present their perspective to others. You don’t have to agree with their point of view, but at least they will feel they have had a good hearing.

Be seen to treat all people equally and fairly. A hard one because no two situations are the same. Ensure that your processes are transparent and consistently applied to all. Explain the rationale for your thinking, how you came to your conclusions, why you followed a particular course of action.

Always do what you say you are going to do. The moment you don’t deliver as promised your credibility starts to come into question. So don’t make wild promises. Check what it is that people really need and check that you can deliver.

Speak confidently about what you believe will and should happen.

Instil confidence in your ability and the decisions you make. Provide a sound rationale for why you believe something should happen and the reasons why something will happen.

Be prepared to listen to an opposing view point and make a shift in your thinking if what is presented makes sense.

Make informed decisions. Know the ‘ins’ and ‘outs’ of a situation. Weighing up the ‘for’ and ‘against’. Gather the evidence and facts that will support the decision you make. Don’t guess.

Don’t assume that others see the situation as you do or have the same knowledge as you.

Daniel Kehoe

Inform others of the reasons for your decisions. Establish a credibility, a rationale for your thoughts and just

how this decision evolved. Be aware of the ramifications of decisions on others.

Minimise the risk of failure. Seek input from others about potential risks and take steps to check that they are minimised. If the things you do are seen as being successful people will trust your judgement and ability.

Provide counsel to those who seek it. When asked for advice, give it. This is not saying solve their problems for them. It is about you assuming the role of a mentor and assisting them to make the all important informed decision. Help them see the range of choices and the possible consequences.

Keep confidential conversations between those who are authorised to know. The quickest way to lose the trust of someone is to breach their confidence. This can be tricky because in some situations you may feel others should know of a problem about which someone has come to you in confidence. Whenever you feel this to be the case, seek permission from the person concerned to discuss this matter with others.

Provide others with the space to manage their own priorities. In other words, keep your nose out of areas where it doesn’t belong. Allow them to be responsible for the outcome and to achieve it in the best way possible.

You must be sure that they are capable of doing the job. u Daniel Kehoe: Author of the best-selling You Lead, They’ll Follow books, Daniel has worked as a management consultant since 1979 in Australia, Indonesia, Malaysia, Singapore, and UAE (Dubai, Abu Dhabi and Al Ain). He is a Fellow of the Institute of Management Consultants Reprinted with permission

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

35

aicm Training News AICM Training News Welcome to the first edition of AICM Training News. The AICM RTO is the Registered Training Organisation arm of your institute.

Through these updates we aim to highlight the opportunities and benefits of undertaking individual courses or working towards a Certificate or Diploma in Credit Management.

Opportunities to continue your development in 2015 2015 is yet to get started; however, we have received enrolments already for our Sydney and Brisbane face to face courses in February 2015. AICM will be conducting training in both Sydney and Brisbane in February for – zz 1 day training – Manage bad and doubtful debts This course covers all facets of the collection process from invoice to managing bad and doubtful debts zz 2 day training – Manage factoring and invoice discounting A must do course for anyone working with factoring and/ or invoice discounting and is endorsed by DIFA (Debtor and Invoice Factoring Association) See the following pages for more information on these courses.

Additional public courses will be offered throughout 2015 in Sydney, Brisbane and Melbourne.

Please email Debby Manners at debby@aicm.com.au if there are any specific units that you would like to see tabled for training in 2015.

Whilst our public courses require a

minimum of 8 students to proceed, our Online Learning platform is open for immediate enrolment.

Recent Graduates AICM would like to acknowledge and congratulate the following AICM students that have successfully completed their qualification/courses in the past 3 months.

Laura Jenkins Juliana Widjaja Elizabeth Morris Amanda Tarling Emma Elphinstone Michaela Novak Kirstin Atkins Aimee Martin Nikole Vamarasi Michael Honeybone Bonnie Chapman Kate Pattison Matthew Robertson Bineeta Kotak Daniel Guarino Suong Nguyen Kalinga Perera Carly Rae Debra Briggs Deepika Vyasnarayanan

Experience of Vanessa Betland, Team Leader Wyong Council, recent Graduate of the Diploma of Credit Management.

As someone who fell in to debt recovery and was quite successful I decided in 2011 I had rested on my laurels long enough and needed to increase and formalise the knowledge around my inadvertently “chosen” career.

With the end goal in mind I started liaising with our peak industry body which resulted in the release of, and my commencement in, the components that would result in attaining a Diploma of Credit Management (fancy). As someone who had not formally studied after the completion of year 12, I was concerned that I had bitten of much more than I could chew and made a solid decision to “chew faster” – this just had to be done, so off we went in June 2011 rather afraid but determined. After recently completing the required components, on track for my self-set 3 year completion timeframe I cannot thank and compliment the Institute, their staff and their education facilitators enough. I FINISHED, I finished with a minimum of fuss and while maintaining the constraints of motherhood and a very demanding full time role in credit management. To all who would like that qualification, whatever it may be, and the knowledge and confidence that goes with it, sign up – the Institute of Credit Management Learning Services know what they are doing and can and will hold your hand start to finish – YIPEE – onwards and upwards.

36

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

aicm Training News Anja Bonnard Brian King Nicolette Thomson Michael Ludbey Yvonne Harrison Kellie Frahm Nicholas Samojenko Julie Cuskelly Cindy McDonald Jasmine Lynch Rashmi Canagasabey Vanessa Betland

New Regulatory requirements The past 3 months have been exhausting and exciting with new regulatory requirements being introduced for Registered Training Organisations as at 1st January. These new changes will see the introduction nationally of the New Unique Student

Experience of Julie Cuskelly, Senior Credit Controller at Australian Liquor Marketers, Recent Graduate of the Certificate IV Credit Management I was given the opportunity to do this course and couldn’t be happier with myself and my work colleagues who completed alongside me. I did not think I would be doing assignments and having to study again at my age.

The skills and laws I have learnt from this course have improved my skills and also helped me move forward in my job role and career. The help and support we received from Tony Sawyer the whole time was a massive and am proud to now call her a friend. The information gained throughout this course I would recommend to anyone entering the Credit environment.

Identifier, which all existing and new students will be required to register for. How to register information has been included in this edition of RTO News. In addition from the 1st January 2015, new reporting processes have been implemented for AVETMISS Student Data Reporting, which we

have been working tirelessly with our IT Management Team to ensure that we have all of our data reporting processes in place to meet our reporting obligations. I can now report that all AICM data has been validated and all of our processes are in place for 1st January 2015. u

Manage bad and doubtful debts Build the skills of your credit team.

l Understanding the difference

Strategies for minimising

This unit is beneficial to loans

between a bad and a doubtful

uncollectable debt. Preparing

officers, collections and credit

debt

recommendation for write off.

officers and credit team leaders.

This course ensures candidates have the understanding and skills of best practice in the area of debt collection.

The ability to identify and recover an overdue customer account is a core requirement of

l Methods for dealing with a customer’s excuses for not paying the outstanding amount

l This unit will be offered face to face in Brisbane on the 9th

l Negotiating with the customer

February and Sydney on the

to recover the outstanding

18th February 2015. Register

payment

your interest early as these 1 day

l Monitoring and documenting the outcome of the recovery action

a credit professional.

public courses fill fast. Contact Debby Manners on 02-9906 4563 for further information.

Topics Covered: Outcomes are covered within

Negotiating the recovery process

this unit:

of an outstanding debt. The

and successfully complete

This course deals with the key

importance of the reporting

the assessment requirements

aspects of dealing with a debt that

function. Identify customer excuses

for FNSCRD403A Manage

has been categorised as bad or

and reasons and strategies to

bad and doubtful debts

doubtful including:

avoid payment. Commonly used

which is a Core unit from the

l The steps involved in reviewing

reports used in consumer and

FNSFNS40111 Certificate IV in

an account to determine if a

commercial credit. Identifying a

Credit Management will receive a

debt is likely to become bad or

bad and doubtful debt. Managing

nationally recognised Statement

doubtful

the outsourced recovery process.

of Attainment.

l Participants that undertake

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

37

aicm Training News Factoring and invoice discounting There has been substantial growth in the use of

Topics Covered:

factoring and/or invoice discounting arrangements over

The History of Factoring and Discounting,

the past few years. This course is relevant to people

Introduction to Factoring and Discounting, The

in all areas of business that provide factoring and/or

Approval Process, Verification, Securities, Risk

invoice discounting arrangements. This course is also

Monitoring and Maintenance, Why was the PPSA

beneficial to businesses that may intend to undertake

Introduced.

such arrangements. l This unit will be offered face to face in Sydney, The following outcomes are covered within this unit.

Brisbane and Melbourne quarterly in 2015. Register

l Differentiating between the types of factoring and

your interest early as these 2 day public courses

invoice discounting arrangements that may be

fill fast. Refer to the AICM website for dates, or

offered to prospective clients

contact Debby Manners on 02-9906 4563 for

l How to effectively communicate to clients the

further information.

different policies and procedures that the client would need to follow depending upon the type of product provided l Strategies to ensure that clients understand how

l Participants that undertake and successfully complete the assessment requirements for FNSCRD502A Manage factoring and invoice

legal assignment will vary depending on the type of

discounting arrangements which is an Elective unit

product

from the FNS51511 Diploma of Credit Management,

l What information should be provided to debtors when an arrangement has been entered into with a

will receive a nationally recognised Statement of Attainment.

client l The advice that should be given to debtors of the debt recovery process that will be followed as a result of the introduction of the factoring and/or invoice discounting arrangement l How to manage the relationship between the client and the factor and/or invoice discounter and establish ongoing monitoring procedures

38

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

AICM are proud to deliver this unit in collaboration with DIFA

aicm Training News IMPORTANT STUDENT INFORMATION

Unique Student Identifier From the 1st January 2015 if you are undertaking nationally recognised training delivered by AICM you will need to have a Unique Student Identifier (USI).

A USI gives you access to your online USI account which is made up of ten numbers and letters. It will look something like this: 3AW88YH9U5.

A USI account will contain all your nationally recognised training records and results from 1 January 2015 onwards. Your results from 2015 will be available in your USI account in 2016.

When applying for a job or enrolling in further study, you will often need to provide your training records and results.

One of the main benefits of the USI is that you will have easy access to your training records and results throughout your life. You can access your USI account online from a computer, tablet or smart phone anywhere and anytime.

Do you need a USI? You will need a USI when you enrol or re-enrol in training from 1st January 2015 if you are a: zz student enrolling in nationally recognised training for the first time, for example certificate III, certificate IV or diploma course; zz student’s continuing with nationally recognised training.

You are a continuing student if you are a student who has already started your course in a previous year (and not yet completed it) and will continue studying after 1 January 2015.

Once you create your USI you will need to give your USI to each training organisation you study with so your training outcomes can be linked and you will be able to: zz view and update your details in your USI account; zz give your training organisation permission to view and/ or update your USI account; zz give your training organisation view access to your transcript; zz control access to your transcript; and zz view online and download your training records and results in the form of a transcript which will help you with job applications and enrolment in further training.

If you are an international, overseas or an offshore student please visit usi.gov.au for more information.

How to get a USI It is free and easy for you to create your own USI online.

While you may create your own USI, training organisations are also able to create a USI for you.

Steps to create your USI The following steps show how you can create a USI: Step 1 Have at least one and preferably two forms of ID ready from the list below: –– Driver’s Licence –– Medicare Card –– Australian Passport –– Visa (with Non-Australian Passport) for international students –– Birth Certificate (Australian) –– Certificate Of Registration By Descent –– Citizenship Certificate IMPORTANT: To make sure we keep all of your training records together, the USI will be linked to your name as it appears on the form of ID you used to create the USI. The personal details entered when you create a USI must match exactly with those on your form of ID. If you do not have proof of ID from the list above, you can contact AICM on (02) 99064563.

Step 2 Have your personal contact details ready (e.g. email address, or mobile number, or address).

Step 3 Visit the USI website at: www.usi.gov.au Step 4 Select the ‘Create a USI’ link and follow the steps.

Step 5 Agree to the Terms and Conditions.

Step 6 Follow the instructions to create a USI – it should only take a few minutes. Upon completion, the USI will be displayed on the screen. It will also be sent to your preferred method of contact.

Step 7 You should then write down the USI and keep it somewhere handy and safe. u

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queensland

aicm around the states

Rachael Ryan, Sarah Mizon, Fiona Doherty, Scott Goodrick.

President’s Report My report this month is being written from a secured bunker just outside Brisbane’s city limits. The G20 Summit has descended and leaders from around the world are meeting.

There are attack helicopters overhead, armoured motorcades making their way to and fro the secret meeting place (the Convention Centre in South Brisbane).

All of this is still nowhere as exciting as the AICM National Conference that was held in October on the Gold Coast, we farewelled our leader Terry Collins CEO and welcomed Nick Piliavidis. Another magnificent preceding Golf Day (Much Thanks Greg Young). With the Conference proper under way, there were more ex-presidents than the G20 but much less hair. The energy and hunger for knowledge was exhibited by the high attendance figures, even the morning session following the Presidents dinner.

So many things were highlights, the standard of the YCP candidates was outstanding – thank goodness I do not have to go up against them for a role. I loved James Neate’s Master of Ceremonies performances, which brought it all together and the very high caliber of the speakers and presenters.

On behalf of Queensland Council I would like to thank all the delegates, sponsors and booth holders for coming to our part of the world. It was certainly a rewarding experience for myself, and my fellow councilors. We look forward to having you back when the conference comes back to the Gold Coast.

As soon as Brisbane has emerged from the G20 and we are not in lock-down, Queensland Council is holding our final function for the year at the historic riverside Regatta Hotel in Toowong. It promises to be a great opportunity to get together with like-minded individuals and wrap up 2014.

If you have not attended our functions previously, 2015 is the time to start. If you want to attend short sharp sessions 40

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

Stacey Woodward QLD YCPA 2014.

that will give you some insights and the opportunity to do some networking after, our Monthly Credit Network Nights will be just right for you. Look out for details.

I wish you all a safe and happy holiday break if you are having one. If not, love what you do.

– Brian Kay FICM CCE AICM Queensland Council President

September 2014 Credit Network Night Our last event before National Conference was held in Randstad’s Boardroom in their office in Queen Street.

This was a change of venue for us and quite a social event was enjoyed by all. Thirty people attended to hear Alison Jardie, who is a psychologist and a facilitator in Leadership Development to give her presentation on leadership and team building.

Alison presented an interesting, educational and often motivational segment about issues which are relevant, not only in the workplace, but also in our personal lives. To understand the individual personalities of the team is an important strategy to keep the team at peak performance and highly motivated. Where gaps in performance or communication become evident, the development of the team is critical.

Alison identified the ability to analyse the strategy of the team to keep the team members participating at full capacity. These strategies are naturally adaptable from the workplace to our personal lives and our family commitments in an effort to build a life with a little less stress!!!

Our thanks go to Alison, the Randstad crew for their hospitality and the use of their venue.

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around the states

Ron Freier & Haley Kuhn.

Karen Leggett and Julie McNamara.

Introducing Queensland Council QUEENSLAND DIRECTOR – GREG YOUNG BA, LLB, JP, MICM, MQLS Greg is a Partner of Forbes Dowling Lawyers in the Brisbane office at North Quay. Greg has extensive knowledge in the experience in the areas of debt recovery, insolvency and personal injury and specialises in these areas of commercial litigation, insolvency and personal injury litigation. In a previous life Greg obtained considerable experience in these fields as a Partner with McGillivrays.

In being able to handle these matters with some considerable aplomb, Greg holds a Bachelor of Arts (Uni of Qld), A Bachelor of Laws (QUT), is a Justice of the Peace, is a QLD Law Society Accredited Specialist in Personal Injuries, is a Member of the Institute of Credit Management and a Member of the Queensland Law Society.

Greg joined AICM in 1997 and during this time has been able to contribute his time to the development of the Queensland Division. It was during Greg’s time as Queensland President that Queensland won the ‘Presidents Trophy’, which is awarded to the highest performing state.

Greg has been serving on council for ten years and his quiet bearing and his wise council has guided the council over many sensitive issues. At the present time Greg is half way through his tenure as Queensland’s Director, representing Queensland members and relevant matters at National Board level.

For those who know Greg well, we would also add that he specialises and practices regularly his golf with any and every opportunity taken to practice or enhance his skills upon the green and maybe an occasional visit to the 19th hole.

QLD delegates.

The Australian Institute of Credit Management Queensland welcomes the following organisations as our sponsors for 2014 The Australian Institute of Credit Management and our Sponsors benefit from a cooperative and supportive relationship that provides high profile branding opportunities to sponsoring organisations and gives the credit industry greater recognition and the opportunity to work together to promote best practice in the credit industry and in so doing provide professional development opportunities for credit practitioners in Australia.

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south australia

aicm around the states

Gail Crowder and Rebecca Edmiston.

Wade Bekesi and Megan Bekesi.

President’s Report

Currently the PD committee are busy putting together a Credit Symposium for next year which will be held in March, in the picturesque Adelaide Hills. Our annual Symposiums are a full day event and prove to be very popular offering high calibre speakers and great networking opportunities. We have also been able to negotiate discounted rates for those attendees who wish to stay on to enjoy “Adelaide Hills hospitality” On behalf of the SA committee, members and sponsors we would like to wish all of our national colleagues and friends a very Safe and Merry Christmas. Ensure you take the time to spend special moments with your loved ones and prepare for another eventful and exciting year ahead. Look forward to seeing you all soon!

Now in my second year as President of the SA Division I must say it has proven to be an exciting challenge for me!

Supported by an enthusiastic committee, loyal sponsors and members has enabled our State division to receive the honourable “President’s Trophy” for 2014. Thank you to all members for your dedication to the AICM and what we continue to achieve each year.

I would like to take the opportunity to say how extremely proud we are of Rebecca Edmiston, Team Manager – Legal Mortgage Help Centre Third Party at Bendigo and Adelaide Bank for being awarded joint winner of the YCP. Rebecca is keen to work with the committee over the year ahead and we look forward to her input.

Congratulations to Janelle Muegge for achieving her CCE this year. We all understand it is hard to juggle the time to fit this in whilst holding a full time position, so well done!

Our Annual Award’s Dinner was full of fun and frivolity with our humorous James Neate, SA Director, hosting the evening.

Our special guest speaker was Nick Pilavidis, AICM CEO, who shared his career highlights and thoughts for the future of the AICM. What a star studded event it was with high attendance from all sectors of the credit industry.

We continue to search for new presenters at our monthly Credit Focus mornings and have worked hard to improve the quality and contents for our attendees in 2015.

The end of year Christmas Networking evening will be held at the Bombay Bicycle Club, quirky and unique with it’s animal themes, particularly the elephants, delicious mixture of Indian food and jungle noises! Guaranteed to be a super night and a great way to toast 2014 and the festive break. In the meantime the Functions committee are brainstorming some new events to bring some spice to the New Year.

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– Gail Crowder, SA Division President

Credit Focus Review The South Australian Division has had a very successful few months with some excellent opportunities for our members to gain valuable knowledge in the essential areas of Financial Statements & their value presented by Des Monroe and his team from BRI Ferrier in July, Risk Free Credit By Security presented by Alice Carter of Lynch Meyer in August, Effective Communication by Jane Calleja from NCI Insurance Brokers September, & Credit Management 101 presented by Adrian Stewart in November.

We are very fortunate to have all of these above mentioned people and many more other Credit Professionals who are willing to give their time to the institute to ensure that we are able to continue offering a prime source of Credit Training and networking opportunities that these events provide.

We are looking forward to an exciting program for 2015 with many new topics & speakers combined with a few of the old favourites which have been requested by you, “our members”

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so please keep on contacting us with your suggestions and any ideas as this is the best way for you to get the most out of your membership.

– Lyn McKell, AICM South Australian Division Credit Focus Chair

GAIL CROWDER MICM SA Division President Having worked in the credit industry for nearly 20 years, Gail commenced her career in one of the toughest areas of collections, the transport industry. These challenges encouraged her to continue to work in credit having roles at Lux Ltd, Receivables Management Ltd and then 7 years at Collection House where she managed insurance and commercial accounts. Gail was offered a newly created role in Business Development and then went on to manage several credit departments. At National Credit Management she was the Business Development Manager for SA, WA and was overseeing VIC for a short term. Gail continues to focus on improving/building client and staff relations in the credit industry. She has a strong enthusiasm for delivering the best results possible! Her 3 children are her pride and joy and she believes that good communication and understanding each individuals needs is the the key to all relationships. She is currently embracing her second year in the role of President of the AICM, SA Division and thanks her dedicated and professional committee !

WADE BEKESI MICM Managing Director, Mercantile CPA SA Division Councillor Growing up in the middle class Wester suburbs of Adelaide, I hated school but had a real passion for owning my own business one day and helping other people in business. I have hundreds of books on business and finance and through this have learnt the two most important aspects of business are sales and cash flow.

I started my career as in sales in 1999 and worked for various small businesses for over 5 years. This included working in sales and business development for Mercantile Collection Services for 2 years. I then worked in the credit management area of GE debt collection for 2 years before being offered the opportunity to purchase Mercantile Collection Services in 2006. This gave me the opportunity to own my own business and help other businesses

by assisting them with their cash flow through debtor management.

In 2012 we merged with Creditors Protection Agency bringing experts in consumer and commercial debt collection to the business, we are now known as Mercantile CPA and has come a long way over the past 9 years and has grown year on year. Over this time, I have learnt a great deal about managing and running a business. I understand that there are many aspects of running a successful and profitable business. One of the most important aspects is cash flow. By offering affordable, effective and efficient accounts receivable and debt collection services I believe that we are helping business to prosper and become more resilient in an increasingly more challenging financial climate. I am glad to be part of the South Australian AICM council and look forward to ensuring the growth of the AICM members in South Australia.

Events Calendar

Thursday 20 November 2014

Christmas Function VENUE: TBA

The Australian Institute of Credit Management South Australia welcomes the following organisations as our sponsors for 2014

The Australian Institute of Credit Management and our Sponsors benefit from a cooperative and supportive relationship that provides high profile branding opportunities to sponsoring organisations and gives the credit industry greater recognition and the opportunity to work together to promote best practice in the credit industry and in so doing provide professional development opportunities for credit practitioners in Australia.

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victoria/tasmania

aicm around the states

Jason McCutcheon has members enthralled.

September Network Breakfast well attended.

President’s Report

catching up with all those important people you’d like to see before year’s end.

We’re hoping to see a great turn out this year. Jump online and check it out the venue at www.krimper.com.au and we’ll see you there!

To our State partners Veda, DNB, Randstad, National Collection Services, thank you for support and contribution over the last 12 months and looking forward to a bigger and better year in 2015.

Next year’s calendar is up on the web site we have new and interesting topics and upcoming events therefore I will look forward in see you in some and if not all of the events during the year.

Many thanks to all the councillors for their support and assistance over the last 12 months and we are looking forward to bigger things in 2015.

Wishing everyone a happy and enjoyable festive season and no doubt a well-deserved break over the holiday period.

It was great to see some many old faces at this year’s National Conference held at the Gold Coast, what was more pleasing was the large number of first timers attending the conference.

Good to see the message is spreading and our future is the credit profession is in good hands.

Congratulation to all the Victorian entrants for this year’s Credit Team of the Year, Victoria had 3 out of the 4 finalists.

Congratulation to Rhys Buzza and his team at Reece for winning this year’s Credit Team of the Year and Brooke Lawrence and her team at Recoveries Corporation as a close runner up, a special mention to Bianca Stephens and her team at Seek for making it to the national finals. This is a great recognition for the winning team but I believe that all the participants would agree this process brings the team closure together and it thrusts some of us outside our normal bounders to strive for excellence. Therefore I would encourage as many as you can to participate in next year’s Credit Team of the Year.

Congratulation to David Haysom from Fuchs Oils as this year CCE Dux for 2015, great effort and well done. National Credit Insurance (NCI) has been a great support of this event, the bottle of Penfold Grange has always been well received by the worthy winner. The CCE qualification will raise the level of respect among colleagues in business, credit management and the broader financial community. CCE is an important catalyst to staff development. It will encourage managers and potential managers to expand their knowledge beyond their particular area of specialisation, whilst continuing to learn and grow in the market place. CCE tells your employer you are motivated and accomplished together with being up to date in your knowledge of credit management skills.

It’s that time of year again and this year’s AICM Christmas Party is going to be a night not to miss. Join your friends, Credit Colleagues and staff at the Division’s End of Year Festive Cocktail Party, being the credit industries Premiere Networking opportunity for the year.

We’re trying something a little different this year, going for a more relaxed environment and conducive to conversation and 44

CREDIT MANAGEMENT IN AUSTRALIA • December 2014

– Lou Caldararo

September Networking Breakfast A great turn out to the September Networking Breakfast, where Jason McCutcheon, recipient of the Swinburne University of Technology Industry Engagement Award in 2010 and runner up for Teacher of the Year at Box Hill TAFE in 2010 and 2012, delivered and interesting and informative presentation on Leadership and Career development for women. Jason engaged in the topic of areas of career development where women are not making the right moves to improve their chances of advancement. Some of the areas Jason covered were confidence, assertiveness, and resilience, reluctance to self-promote, career choice, support, and over- analysis at the expense of making decisions. Members and guests who attended were delivered a male’s perspective as to some of the issues that hold women back. Jason hoped that those who attended came away with some positive action steps to improve their career aspirations.

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victoria/tasmania

around the states

this development into the team in such a short period was invaluable. The process itself is enough reason to have the team undertake the award.

What has winning the award has meant to you personally?

For the Team to receive such an accolade is a very satisfying moment and an achievement I will cherish for my career. To see the development in the team, and to be acknowledged for our achievements and to have a team that in my opinion contains the very best young talent and the future leaders of our industry is something I am very proud of.

The Reece Team with Grant Morris and Debbie Leo.

Credit Team of the Year Award The VIC/TAS Divisional Committee on behalf of all the members would like to congratulate Rhys Buzza and the Team at Reece for their submission to and outstanding effort in winning the AICM Credit Team of the Year award. Tony Mackwell of VMIA, newly appointed to the VIC/TAS Division Committee, recently interviewed Rhys on the Credit Team of the Year Award, on how they found the process and benefits to him and his team.

Are there any other comments you would like to make?

I would encourage other managers and leaders to seriously consider nominating for the award. It is a great way to review and assess your teams achievements and development, it provides outstanding development and learning opportunities for team members and it provides exposure to the team and tem members that cannot otherwise be obtained in such a short time.

Events Calendar

Tuesday 16th December

What has winning the award has meant for the team?

Winning the award has been a tremendous boost for the team.

Recognition for 18 months of incredibly hard work. Having the team buy into and engage in a massive change program that encompassed, people, technology and process and to get an ultimate reward for that engagement is outstanding. Winning the award has meant the Team has gained terrific recognition and allowed them to grow their own profile in the industry. This growth and the new networking opportunities will deliver new and long lasting relationships that will benefit them for many years to come.

What has winning the award has meant for the company?

Reece Pty Ltd has been incredibly supportive of the work the team has been doing and the changes they have been driving throughout the business. The Senior Leadership Team for the business have personally taken an interest in the teams progress and the teams endeavours with the award. Reece Pty Ltd is a very proud company very driven to succeed and is never complacent, the winning of the award is confirmation we are going in the right direction.

VIC/TAS Division 2014 Christmas Party @ Krimper (Guilford Lane)

COCKTAIL PARTY; RELAX WITH DRINKS, CANAPÉS AND PLENTY OF MINGLE TIME.

The Australian Institute of Credit Management Victoria/Tasmania welcomes the following organisations as our sponsors for 2014 The Australian Institute of Credit Management and our Sponsors benefit from a cooperative and supportive relationship that provides high profile branding opportunities to sponsoring organisations and gives the credit industry greater recognition and the opportunity to work together to promote best practice in the credit industry and in so doing provide professional development opportunities for credit practitioners in Australia.

What are your thoughts on the process?

The process itself was outstanding. The team were stretched in many ways throughout the application and presentation process. During the process the team developed, leaderships skills, teamwork, communication, initiative, confidence and professionalism. As a leader of the team, to be able to drive

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western australia/nt

aicm around the states

Great tea and lovely venue.

President’s Report Welcome to my final report for the 2014 year. And what a year it has been. Is it me or is it that the pace of life and in this context our working life, just keeps picking up momentum. Just when you think everything is moving along nicely along comes a new or more dynamic way of doing things.

The AICM National Office now has a new CEO in the form of Nick Pilavidis (by the way welcome aboard Nick), there is no doubt that Nick will continue the growth and development of our Institute. With Nick being the Young Credit professional of the year in 2005 I am looking forward to see what initiatives he will bring to the National Office.

This brings me to my main point of reference in this report: I was reading some literature lately that caught my attention.

The topic being ‘how to communicate to a new generation, or in other words how to grab the attention of a generation of short attention spans? The new generations, X and Y are ‘Digital Natives’ (love those words) as they have spent their entire lives immersed in technology – computers, video games, smart phones, internet, facebook, hashtags, tweets, twitters and so on and their ‘Native Speak’ is that of digital language.

These new generations think and process information fundamentally differently from their predecessors!

Digital natives are used to receiving information really fast, they like parallel processes and they multi-task.

They function best when networked and thrive on instant gratification and frequent rewards. Some may even say they prefer games to ‘serious work’- ah you would have to brave to say that and it would be at your peril because if you are not able to keep up with these Natives then you are surely going to fall behind.

Take your website for example – they say that you have 3 seconds to engage with the new generation when and if they 46

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visit, if no engagement they have gone. Digital natives can smell a hard sell so your company’s communication strategies need to be about others, not just you and your product. They need to be focused on building connections and the broader community.

And this brings me to my final message – Our new CEO will be focused on building connections for our Institute and he will engage with the broader community….and we have to support him in any way we can, otherwise we run the risk of being left behind!

Enjoy your upcoming Christmas festivities and I look forward to catching up with you at our Sundowner on the 4th December.

– Colin Phillis MICM – WA President

Young Credit Professional Report High numbers of young and new people join the world of Credit and Collections every day, be it by choice or by accident!

To maintain and continue to improve standards, each of us has a responsibility to ensure the staff working around us are ‘on the ball’ and using best practises. Less Experienced or less confident people often need a mentor or an encouraging manager to help us find our way!

So if each of us proactively ensure to Forward and Share relevant institute communications and events with others in the industry, we can help build awareness of the AICM Institute and the training and network of contacts it can provide. Let’s all encourage self-development as the better the staff around us, the better we can perform as a whole!

Previous YCP Award winners Kristy Shrigley, Rosanna Maugeri and now Tamera Russell (2014 WA winner), are all involved in boosting youth awareness and career progression.

Currently focussed on building alliances with other young

aicm

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Events Calendar

Thursday 4 December 2014

XMAS Sundowner – Relax and Network VENUE – SOUTH OF PERTH YACHT CLUB

Media and Publications Lisa Marr (Instant Waste Management) – WA 2015 Functions & Media co-chair.

professional groups in WA ready for the 2015 YCP Award, AICM is in the process of becoming an affiliate of Perth Young Professionals (a membership group of Gen Y professionals from various industries and sectors across WA) and other groups such as the Young Finance Professionals and Young Guns WA. – Kristy Shrigley MICM – Media & Publications

Seminars and Events As our new Functions & Events managers, Steve Thomas (NCI) and new council member Lisa Marr (Instant Waste) have been very busy signing off on the new 2015 calendar of events! With a lot of feedback received in recent months from our WA members, we plan to take all that has been learned and continue to improve the quality and attendance of these events. Watch this space!

Inaugural “Ladies in Credit High Tea” – Friday 24th October 2014 This 1st of what may be a series of events was held at The Pagoda, South Perth recently and a good cross section of industries represented. It was a great way to end the working week and welcome the weekend. We are looking forward to growing this event in 2015 and including the gentlemen, and attracting some key speakers.

Check out our Facebook WA page for Photos of the event.

The WA AICM Facebook page has been up and running for a while now, but this is really just for sharing photos. The name of the page is AustralianInstituteOfCreditManagementaicm.

Pictures of AICM National events such as the conference are available on our affiliate Credit Network website: http://www.creditnetwork.com.au/ The Credit Network is a fantastic and free resource that many of our AICM members have joined. With interactive forums, presentation templates, fact sheets and more make sure to check it out. Additionally, the national AICM – Australian Institute of Credit Management Linkedin page is getting bigger and bigger every day. Feel free to post submissions and comments here for us to share.

The Australian Institute of Credit Management Western Australia/NT welcomes the following organisations as our sponsors for 2014 The Australian Institute of Credit Management and our Sponsors benefit from a cooperative and supportive relationship that provides high profile branding opportunities to sponsoring organisations and gives the credit industry greater recognition and the opportunity to work together to promote best practice in the credit industry and in so doing provide professional development opportunities for credit practitioners in Australia.

AICM Xmas Sundowner – Thursday 4th December 2014 Hope to see you all at our social end of year function, held at the ever popular South of Perth Yacht Club. There have been some changes in 2014 so it is a great opportunity to meet your council members and give us some feedback and suggestions for 2015.

Keep an eye out in future issues of the AICM magazine for a feature on each of our Councillors, who they are personally, and more information on the AICM portfolio they manage.

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new south wales

Winners: Charles Kinsella, Daniel Grace, Nick Pilavidis and Doug Rouessart.

aicm around the states

Len Russell from Neuroscience Research Australia Foundation and Colin Magee.

President’s Report NSW GOLF DAY We celebrated the re launch of the NSW Golf Day at Oatlands Golf Course on 12th September. I would really like to say a big thank you to all our sponsors for supporting this event, they were: zz Naming Day Sponsor: Australian Recoveries & Collections (ARC) with (creditor)watch zz Drinks Cart Sponsor: Commercial Credit Services zz Putting Competition: Turks Legal zz Welcoming Pack: Trace Personnel zz BBQ Sponsor: Ampac Debt Recovery zz Premium Sponsors: IP Payments, Bing, Stone Recruitment, Hall Chadwick, Hymans Valuers & Auctioneers, Veda and Wise McGrath Hole Sponsors: Atradius, Byron Thomas Recruitment, EDX, Cor Cordis, Debt Sale Brokers Australia P/L, Fortis Law Group, TDX Group, Trace Personnel, Collexus P/L, Dun & Bradstreet and Makinson d’Apice Lawyers.

We had just on 100 golfers that hit off just on Midday after a lovely morning tea.

Jamie and Danielle from CCS headed around with the drinks cart as well as selling raffle tickets for our chosen charity for the day NeuRA, (Neuroscience Research Australia Foundation).

Len who attended the dinner on behalf of the charity was overwhelmed with the $1500 we were able to donate to the cause….a really huge thank you to everyone on the day for making this happen.

Mark and David from Ampac kept everyone fed with some beautiful garlic prawns whilst Will and Alison from Turks Legal had the putting green decked out with cupcakes and bottles of wine for a fantastically run putting competition that came down to a playoff at the end of the day with Alistair Hewson taking home the prize.

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CREDIT MANAGEMENT IN AUSTRALIA • December 2014

National President Grant Morris busy at work.

Chris, Matt and Patrick from (creditor)watch had the crowds very interested running the “gambling hole” which was eventually won by Steve Jardie who went home with his wallet quite fatter than when he got there…

Kaeley from Stone Recruitment was making sure everyone was prepared for the “19” happily supplying stubby holders to all and a pro shop voucher for nearest the pin.We had our own paparazzi for the day with the lovely Balveen Sani from BBW making sure everyone was snapped “hitting that booming drive”…

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Naming Sponsors ARC (Andrew Smith) and (creditor) watch (Colin Porter).

Drinks Cart Sponsor & raffle girls from Commercial Credit Services Jamie Kerry, Danielle Attard and Colin Magee.

Group photo on the putting green.

Our lucky winners for the day were: –– First: Team (creditor)watch Charles Kinsella, Danial Grace, Nick Pilavidis and Doug Rouessart –– Second: Team Atradius Paul Daniele, Alister Hewson, Mark Smith and Paul Morgan –– Third: Team Wise McGrath Matt Stokes, Simon Robinson, Joe Kyayo and Kyle Grey –– Longest Drive Men: Lewis Greenup and Paul Mead –– Longest Drive Ladies: Louise Thomson (twice) –– Nearest the Pin Men: Steve Jardie and Kevin Hartin –– Straightest Drive Men: Andrew Smith –– Straightest Drive Women: Louise Thomson –– Raffle Winner: David Mann –– NAGA: Team Bing Nadine Butcher, Alexandra, Mikey and John Gargen We finished the day with drinks in the bar followed by a lovely 3-course dinner. Big thanks to fellow organisers Andrew Smith and Patrick Coghlan as well as Jennifer from the club.

Look forward to seeing you all there again next year.

The Australian Institute of Credit Management New South Wales welcomes the following organisations as our sponsors for 2014 The Australian Institute of Credit Management and our Sponsors benefit from a cooperative and supportive relationship that provides high profile branding opportunities to sponsoring organisations and gives the credit industry greater recognition and the opportunity to work together to promote best practice in the credit industry and in so doing provide professional development opportunities for credit practitioners in Australia.

– Colin Magee

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new south wales City Networking Night (Fraud – How to protect your company) – 16th September Over 40 people attended the KPMG boardroom to see Giles Woodgate and Richard Rowley from Woodgate & Company give us a very informative discussion on fraud, this was followed by some drinks and canapés and plenty of good networking done by the crowd at hand.

Some of the teams...

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CREDIT MANAGEMENT IN AUSTRALIA • December 2014

aicm around the states

National Conference on the Gold Coast – October 15-17 October 2014 It was good catching up with everyone at this years conference.

The program was great, and a fantastic President’s dinner was enjoyed by all. Thank you to everyone involved. I, and the NSW Council look forward to welcoming you all in Sydney in 2015 Lastly, Merry Christmas and a safe and happy new year to all…hope Santa is kind to you.

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NEW MEMBERS The Institute welcomes the following credit professionals who were recently admitted to membership in September and October 2014

QUEENSLAND

VICTORIA/TASMANIA

Kelly Anderson

Hastings Deering (Australia) Limited

Kerrie Adams

NEC Australia Pty Ltd

Gerard Burns

Credit Collection Services Australia

Zoe Cortese

Cummings Flavel McCormack

Suzanne Hammond

Data #3 Limited

Naomi Gibson

Connect East

Gale Petersen

Hastings Deering (Australia) Limited

Rebecca Harris

Petrogas Pty Ltd

Patrick Quinn

Creevy Russell Lawyers

Michael Hartman

Inflexion Point

John Shanahan

Gervase Consulting

Lita Kalava

GWA Group Limited

Ashley Stanton

Creevy Russell Lawyers

Gary Sartor

GWA Group Limited

Stacey Woodward

Boral Construction Materials

Rosemarie Sicari

GWA Group Limited

Lynn Whelan

GWA Group Limited

NEW SOUTH WALES

David Beynon

Kessler Financial Services Australia Pty Ltd

SOUTH AUSTRALIA

Tara Blake

Imperial Tobacco Australia Ltd

Rebecca Edmiston

Damien Brunell

Austral Mercantile Collections Pty Ltd

Stephen Flamer-Smith Bendigo & Adelaide Bank Ltd

Janne Capra

Imperial Tobacco Australia Ltd

Leah Hanisch

CCC Financial Solutions Group

Tracy Do

Imperial Tobacco Australia Ltd

Emma Trebilcock

CCC Financial Solutions Group

Terence Eames

Ice Pay Pty Ltd

Phoebe Hu

CCC Financial Solutions Group

Laura Harrison-Clancy Imperial Tobacco Australia Ltd

Mai Huynh

CCC Financial Solutions Group

Suzanne Ingold

Imperial Tobacco Australia Ltd

Leah Hanisch

CCC Financial Solutions Group

Linda Jacob-Flores

Imperial Tobacco Australia Ltd

James Marsionis

CCC Financial Solutions Group

Lissa King

Imperial Tobacco Australia Ltd

Asher Macdonald

Dimension Data Australia

David Mahbub

Imperial Tobacco Australia Ltd

Samantha Olyve

Imperial Tobacco Australia Ltd

WESTERN AUSTRALIA

Moses Sub Raju

Dan Murphys

Paul Abbott

Wesfarmers Kleenheat Gas Pty Ltd

Peter Tennant

Imperial Tobacco Australia Ltd

Christine Griffiths

Architectural Ceiling Systems Pty Ltd

Stipe Vuleta

Chamberlains Law Firm

Pania Henry

Wesfarmers Kleenheat Gas Pty Ltd

Ken Ward

Austral Mercantile Collections Pty Ltd

Beverley Husk

WestFarmers Kleenhaet Gas Pty Ltd

Donna Willcocks

Onesteel Pty Ltd

Tammy Kurek

Wesfarmers Kleenheat Gas Pty Ltd

Stephen Wright

GWA Group Limited

Tenille Miller

WestFarmers Kleenhaet Gas Pty Ltd

Andrea Profant

Wesfarmers Kleenheat Gas Pty Ltd

Jo Ralph

National Credit Insurance (Brokers) Pty Ltd

Bendigo & Adelaide Bank

December 2014 • CREDIT MANAGEMENT IN AUSTRALIA

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Keeping you ahead of the game

At Veda, we’re committed to helping you simplify business processes and make better decisions every single day.

As a market-leading provider of trade credit solutions, you will have the confidence you need to stay ahead of the game and make a real difference to your business.

With Veda you can: • Improve credit application automation with online decisioning • Understand your customer’s payment history and reduce bad risk with DebtorIQ • Assess risk of higher value transactions with RAP Interactive Taking control and staying ahead of the game has never been easier.

For more information, contact David Jovanov on (02) 9278 7847 or visit veda.com.au/business