Credit Management in Australia - December 2015 by AICM

Volume 23, No 2 December 2015

The Publication for Credit and Financial Professionals

IN AUSTRALIA

Season’s

Greetings FIND OUT THE LATEST ON:

 Human Resources  Credit Management  Legal and PPS  Training news

DIRECTORS Australian President – G.L. Morris MICM CCE

NSW Division: Golf Day.

Australian VP, Legal Affairs – J.A. Neate MICM Professional Development – S.D. Mitchinson LICM YCPA & CCE – G.C. Young MICM CCE Member Services – J.G. Hurst FICM CCE Finance – G. Odlum MICM CCE CHIEF EXECUTIVE OFFICER N. Pilavidis MICM CCE Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065 PO Box 64, St Leonards NSW 1590 Tel: 1300 560 996, Fax: (02) 9906 5686 Email: nick@aicm.com.au

40 Qld Division: WINC Panel – Gemma Twemlow, Julie George, John McNamara and Sonia McDonald.

EDITOR/PUBLISHER Nick Pilavidis | Email: nick@aicm.com.au CONTRIBUTING EDITORS Colin Magee NSW Stacey Woodward Qld Gail Crowder SA Warren Meyers WA Donna Smith Vic/Tas ADVERTISING MANAGER John Field FICM, CCE, ACPM, Ph: 1300 560 996 Mob: 0412 732 831, Email: johnfield.aicmq@aicm.com.au

44 SA Division: Neil Fennell – Credit Management Fundamentals.

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 3, Suite 303, 1-9 Chandos Street, 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, 2015.

47 Vic/Tas Division: Trivia Night winners – Team Transurban.

JOIN US ON LINKEDIN

Click Here EDITORIAL CONTRIBUTIONS SHOULD BE SENT TO: The Editor, Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065 or email: nick@aicm.com.au

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

51 WA/NT Division: High Tea.

Volume 23, Number 2 – December 2015

Paul McFadden

Jan Reeves

20 Joseph Scarcella

Frank Gambera

David Francis

Oliver Shtein

Message From the President

PPS

Portfolio Update

Case Note: Central Cleaning Supplies (Aust) Pty Ltd -v- Elkerton [2015] VSCA 92

By James Neate MICM

By Frank Gambera MICM

Human Resources

Lower PPSR costs for equipment hire businesses

Engaging process focused staff

By Moses Samaha MICM

By Paul Burgess MICM

Keeping it in the family

AFSA launches new PPSR guide

How do I know my worth

The money or the box

By Jan Reeves MICM

Credit Management

Quarterly Business Credit Demand Index By Paul McFadden

7 quick wins you get from phoning instead of (e)-mailing your customers

By Oliver Shtein

Annual Conference Photos

AICM Training News

Can we help?

Trade references

By Aroud Visser

Staff engagement – its not as scary as it sounds

By Stacey Feaver MICM

Around the States New South Wales Queensland

Legal

Impact of DOCAs By Joseph Scarcella MICM

Unfair contract terms By David Francis LICM

South Australia Victoria/Tasmania

Western Australia/Northern Territory New Members

35 40 44 47 51 53

For advertising opportunities in Credit Management In Australia

Contact: JOHN FIELD

FICM, CCE, ACPM

Ph: (02) 9906 4563 | Mob: 0412 732 831 | E: johnfield.aicmq@aicm.com.au

aicm

From the President

Grant Morris CCE Australian President

his month we are back to our regular

Young Credit professional of the Year Award in what was

soft copy magazine following the annual

once again a very strong field. An awesome acceptance

hard copy version we issue each year in

speech and an exceptional young credit professional.

conjunction with the national conference.

Onya Tate.

Many members and colleagues attended the national

Our CCE lunch was the largest ever with the greatest

conference, in fact it was a record number who attended

number of awards presented including the Dux of the

at some stage over the three days and this record

Year which is sponsored by NCI and was awarded to

extended to the conference golf day and the President’s

Alison Beythien, Holcim’s National Credit Manager. Well

dinner. If you didn’t make it then make sure you get along

done Alison.

to next year’s event on the Gold Coast where we will take

The Christmas period is a time for reflection and as

the learnings from the Sydney conference and feedback

we look back we are proud of 2015 especially

from delegates and members to provide you with the best

zz The significant increases in student numbers

information, education and networking experience that

undertaking Certificate IV and Diploma courses – both

can be packed into 3 days.

online and face to face. Inhouse training was conducted

zz Plan now to get yourself there

at major banks and finance companies, utilities and

zz Include it in your annual budgets when next you

trade credit operations as far afield as Manilla.

complete them zz Incorporate it as reward and recognition for achieving your KPI’s or targets

zz A record member participation at events across the country such as full houses at Women in Credit or WinC luncheons in Sydney and large numbers in

zz Add it to your training and development programme

Melbourne and Brisbane, Insolvency Symposiums,

zz Use it as motivation and reward for your staff ie offer

Network meetings, trivia nights and golf days in

to send them along, too, when they hit their targets. The cost of the conference is far less than what good

Melbourne and Sydney zz The sell out of the Pinnacle Awards in NSW and,

organisations spend on the development of their

following the growing success in New South Wales

employees.

in recent years, their expansion into Victoria in

Thanks to Veda for again standing with us and being our conference premium sponsor and supporting the

December this year. zz The licencing agreement we entered into with

Credit Team of the Year Award which was won by Caltex.

the UK Credit Institute, the Chartered Institute of

Congratulations to Caltex who are a fantastic team

Credit Management. This will see us deliver quality

who have overcome a number of hurdles and produced

accreditation for Australian Credit Operations and raise

outstanding results in 2015.

the bar here in Australia. Two companies are already

Thanks to Austral Mercantile who were the conference supporting sponsor. Their back up and assistance was very much appreciated. The biggest roll out at the conference was the

enrolled in the programme as we establish the AICMQ accreditation. zz There were solid increases in nominees for the Credit Team of the Year and YCP Awards and the calibre was

President’s dinner which was sponsored by Dun &

very high – again congratulations to Caltex and Tate

Bradstreet and at which we had the very great pleasure

O’Connor.

to see Tate O’Connor from South Australia win the National

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

zz We introduced our online magazine and supplemented

From the President

aicm

this with the new monthly newsletter – making us

Grant’s Soapbox

all better and more regularly informed.

We continue to receive strong support of our proposed

zz We helped the industry overcome the obstacle of

lobbying of the Attorney-General and ARITA for

EDR’s and the Privacy Reforms requiring membership

changes to legislation and practices in

of an external dispute resolution scheme.

zz The period in which preference claims can be

zz We hit our optimistic, but very necessary profit target

made ie the 3 year “statute of limitations” on

and have gone some way to restoring our financial

making preference claims is too long and should

health following past storms. This puts us half way to

be shortened to a year or less. zz The recovery of preferential payments and those

the target suggested by our auditor. zz There was a 20% increase in the number of CCE’s –

Liquidator recovered funds not being paid in

our highest professional recognition, and the biggest

dividends to unsecured creditors or any class of

growth in many years.

creditor for that matter.

zz We held our inaugural webinar, with many to regularly

zz Unsecured creditors who are genuinely at arm’s length being subject to preference claims.

follow. While it was pleasing to see companies entering External Administration of all forms drop to 12,726 in 2014/2015 (a fall of 9% and the lowest level since 2007/2008) it is interesting to note that the Q1 result this financial year reveals 4,118 companies entered administration. This is up 14% on Q1 in FY15 and represents the 2nd quarter in a row where external administrations have grown by 14% to the previous period. Not a good sign at all and an indication of some tough times ahead. On the personal insolvency front it is pleasing to see the number of Personal Insolvencies were virtually static in the September quarter when compared to the September quarter last year (4,386 and 4,390 respectively) although it is an increase of more than 4% on the June quarter (4,215). It probably comes as no surprise that the biggest increases were in the mining states of WA and Qld with year on year first quarter increases of 7.7% and 6.6% respectively. The next highest increase was Victoria at 1.0%.

zz Spurious and inflated preference claims from Liquidators ie claiming $700K and settling for $10K. zz Fees charged by Administrators, Liquidators and Receivers & Managers ie specifically annual increases of 5 – 10% and more. This action is now being taken up by James Neate and the Legal Affairs portfolio with lobbying of the Attorney-General to be our first action. With the Federal Government announcing reforms to the insolvency regime as part of the Innovation Statement made on 7/12/15 (click here), the time is right for us to unite and drive for practical reform to address these issues. We can never have enough support and it is not too late to register your support by sending Nick (our CEO) or I an email simply saying you support positive changes in these areas. It doesn’t need to be wordy. We are happy with a simple “good onya”. The emails/links are grant.morris@coateshire.com.au and nick@aicm.com.au.

The message here is monitor these trends, take action in managing your book, make your management aware of

I hope we see you at an AICM event soon as you support the Institute which supports you.

the difficulties out there where they exist in your area of trade and show your worth and professionalism to your business by becoming a CCE.

– Grant Morris CCE grant.morris@coateshire.com.au Ph: 0407 405 198

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Portfolio Update Legal Affairs As part of an occasional series, we profile each National Portfolio to better inform members of the role of the National Board, its policy objectives and the work undertaken for members’ benefit.

James Neate MICM

Legal Affairs Portfolio Previously known as the Law & Regulation Portfolio the Legal Affairs Portfolio has been relaunched. All Australian businesses, and therefore all credit departments and allied service providers, operate within a highly regulated and complicated commercial legal environment. Professional credit controllers must have current knowledge of a range of legal matters in order to carry out their duties. Given the complexities of modern, professional, credit management practice, it is appropriate that the AICM continues its leading role as a training and education specialist in the niche credit industry. The AICM also seeks to exert greater influence as the voice of the credit industry in terms of input into legislative and regulatory change. The focus of the National Legal Affairs Portfolio is twofold: 1. To liaise with division Legal Affairs Portfolio chairs to identify and coordinate appropriate legal education across a broad range of topics and including: zz Australian Competition Consumer Law, Australian Privacy Laws, Workplace Occupational Health and Safety Law, Personal Property Securities Act, Corporations Act and Bankruptcy Act in respect of insolvency; zz ASIC debt collection protocols; zz Federal and State based legislation and Court Rules.

2. To amplify the voice of the AICM in driving legislative change and reform which reflects members’ concerns. To do this, an informal “AICM Legal Affairs Advisory Panel” has been developed drawing upon the skills of a broad range of members and nonmembers, credit managers and legal advisers, each with their own particular interests, networks and specialties. As National Director for South Australia and Director of the Legal Affairs Portfolio, James Neate, Partner of Lynch Meyer Lawyers, is always keen to hear from members with any specific legal or legislative issues of concern. Feedback from members is vital in shaping the education programme in an ever more complex legal environment. Contributions by members enable policy formulation so the AICM can continue to make relevant and forceful submissions for legislative change. The most recent examples of these have been formal submissions to the Commonwealth AttorneyGeneral’s Department as part of the review of the Privacy Act and Personal Property Securities Register Act review. James welcomes any direct contact concerning the Legal Affairs Portfolio and can be reached on 08 8223 7600 or at jneate@lynchmeyer.com.au u

Professional credit controllers must have current knowledge of a range of legal matters in order to carry out their duties.

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

Human Resources

Engaging process focused staff By Paul Burgess MICM*

Paul Burgess MICM

I was asked not so long ago how I go about engaging collections staff who spend their day making or receiving phone calls. Their main task, and in some cases their only task, is to collect the debt that is the focus of the call. The question was asked from the perspective of keeping these calls both professional and customer focused. In reality, making call after call does lead to a very short term view of the world. The next customer on the list owes $100. The job at hand is to collect that $100 in the shortest time possible, within the confines of legislative and ethical guidelines and rules, and in alignment with the culture of the company. This is by no means an easy task, and is further complicated by the addition of the person making the call, their feelings, beliefs and persuasions. Have they just had a relationship break up? Have they run over the cat on the way to work? As a leader, it is important to have a clear vision: a picture that the whole team can pick up and work towards. It is the translation of this vision to each role, each daily task, that is the difference between the success or failure of the vision. When giving my answer I thought hard about how I translate my vision to the team and how well they understand how they impact on the success of that vision. My vision is to make credit a competitive advantage for the company. It is easy to translate this to a role where retention of customers through problem solving their

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

issues feeds back into a competitive advantage. This is what I would consider a direct influence on the pursuit. However there are also indirect influences on the pursuit. As an example, the team member who’s responsibility it is to pick up the phone and make the collection calls. It is true that a leader’s mind is in the future and a manager’s mind is in the present. In the modern world people need less managing and more leading. To bring the collections role into the vision I first get the focus off the immediate call and onto the big picture. The call is not about collecting $100 today, but setting the customer up for good payment behaviour for the next six to twelve months. Yes, it is important to still work to getting the $100 in, but it is more important to work towards on time payments over the next twelve months. Every collections call becomes a potential relationship building experience which keeps the mind focused on the future. The next call becomes easier, less stressful. The one call everyone gets a day that really gets under your skin becomes more than manageable; it becomes a challenge to work a potential protagonistic situation into an opportunity to win over a faithful and passionate customer, to create a loyal customer. A success in this type of call becomes a direct influence on the pursuit towards competitive advantage of the credit function. It gives the team member a sense of

Human Resources

value in the team and in their efforts, and where there is a perception of value, there is commitment and engagement. My role as leader in the above situation is to keep the team’s mind focused on the future, get out of their way and let them do their thing and provide an environment that is conducive to unlimited thinking. This involves not getting upset when things go wrong, and they do go wrong from time to time, but to be part of the solution by asking, in the immortal words of Bruce Sullivan, “What happened? How can I help?” Given the emphasis on working towards the future, I do things today to ensure tomorrow is a successful day. The one tool I have found

incredibly powerful for this is to say thank you to team members at the end of the day for a good days work. This does two things: it shakes off the negatives of the day just gone, and provides the basis for the next days’ enthusiasm for the task at hand. Appreciation, it would seem, is a hidden secret to tap into unlimited potential. The real not so hidden secret is that I mean it. I would be interested in hearing from anyone who has had similar experiences, or who employs the “What happened? How can I help?” method. u

“As a leader, it is important to have a clear vision: a picture that the whole team can pick up and work towards.”

*Paul is National Credit Manager at Steelforce Australia Pty Limited

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Human Resources

Keeping it in the family

“... I have been challenged to think beyond what was put in front of me, to consider why I had reached certain conclusions and above all to have confidence in making decisions” 10

It is often said that credit people are just one big family and for Christie Addison, Megan Kernick and Robyn Erskine this is certainly true. Credit professionals Megan Kernick and Christie Addison not only share the family bond of being cousins they also share the bond of choosing credit as their profession. Christie is Credit Manager at United Energy & Multinet Gas and Megan is Credit Team Leader at the Reece Group. “Aunty” Robyn is an experienced Insolvency Practitioner with Brooke Bird and has been closely involved with the AICM for many years where she continues to serve on the Victorian/Tasmanian council. We recently caught up with Christie, Megan and Robyn to find out just how three members of the one family have found their way into the credit profession and what this has meant for each of them. What we found is that the pathway into credit was quite different for each. Robyn, an accountant by profession, has specialised in personal and corporate insolvency so while not directly involved in credit interacts regularly with credit professionals. She sees the role of the credit manager as one that is incredibly important. She says “an organisation should never under estimate the value of the credit team. Without sound credit policies and processes it can lead to liquidity problems which in turn can cause the failure of a business”. Christie came via what one would consider the traditional pathway commencing

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

some 14 years ago as an Accounts Receivable trainee with Nestle Peters Ice Cream. Megan on the other hand, after completing more than half of a teaching degree, felt she needed a change and was seeking some real life hands on experience that university just was not providing and was encouraged by Christie to look at an accounts receivable role. Obviously one of the great attributes of the credit profession is the broad base that people looking to work in credit can come from which opens up opportunities for many different people from many different backgrounds. Both Christie and Megan have enjoyed career growth and success which no doubt comes from hard work and commitment. Both attribute much of their success to the tremendous support they have received from fellow credit professionals who have unselfishly acted as mentors by giving freely of their knowledge and helping them develop sound credit skills. Megan says “from day one at Reece I have been challenged to think beyond what was put in front of me, to consider why I had reached certain conclusions and above all to have confidence in making decisions”. Christie is also glowing of the support she has received along her journey especially during her early years at Nestle where, as a young credit team member, she was encouraged by her supervisor to gain valuable skills in managing small and large ledgers progressing to project management and credit analysis. In turn Christie now finds herself in the position of

Human Resources

being able to assist with developing her own team and sees this as one of the most enjoyable parts of her current position at United Energy. Both agree the collegiate atmosphere in credit has allowed them to develop and grow professionally. Megan says “one of the best parts of my job are the people I work with. There is a great culture at Reece and we all just want to do our best for the team”. The AICM has been important in their careers. Robyn says being part of the AICM has developed a strong network of credit professionals which has stood her in good stead when appointed to various insolvency matters. “Knowing you can pick up the phone and find out how a particular supply chain works or how things work in a particular industry is invaluable”. Christie rates being a State Finalist in the YCP Awards in 2004 and 2006 and receiving the Tony Mamone Memorial Award in 2006 as some of the major highlights in her career. Megan feels the opportunities her employer has given her by

“the support I’ve received ... in giving me the flexibility needed to be a valuable employee and a working mother has been really appreciated” supporting her membership of the AICM, allowing her to attend the various training sessions and the National Conference each year has enabled her to grow and understand the world of credit. Since joining the credit profession in 2013 she has been a state finalist in the YCP awards this year and a member of the National Credit Team of the Year in 2014. Personal support is also seen as important. For Christie, a busy mother of two small children, juggling a full on career and motherhood is challenging. She feels very fortunate to be given the opportunity to work 4 days per week with 3 days in the office and one day from home however being a senior member of staff this often means that the days she is in the office are long and on her day off she spends quite a bit of her day checking and replying to

emails just to ensure the work that is needed to be done gets done. The ability of being able to work from home does allow her important time with her family. “Being a working mum is a juggle. Thankfully I have a husband that can share the load, picking the kids up from day care and getting dinner on the table. I often feel that we are always racing the clock and rushing but the kids are very adaptable and are used to having two working parents”. She said “the support I’ve received from United Energy in giving me the flexibility needed to be a valuable employee and a working mother has been really appreciated”. Clearly being part of the credit family has allowed this particular family to make the most of life’s opportunities, make great friendships and develop challenging and stimulating careers. u

Connect with the right people for trade credit solutions. When it comes to credit risk management, navigating the different options requires specialist expertise. And that’s what you get with NCI: • 30 years experience • Superior service • National coverage • Long-term partnerships • Innovative solutions • NCINet online access To find out how all this can benefit you and your clients, visit www.nci.com.au, email info@nci.com.au or telephone 1300 654 500 (Aust) and 0800 442 556 (NZ). National Credit Insurance (Brokers) Pty Ltd ABN 68 008 090 702 AFS Licence No 233817

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Human Resources

How do I know my worth? By Jan Reeves MICM^

Working in credit control and collections can be a great career for many reasons including: 1. It’s a challenging role where you are able to develop top communication skills. 2. You can see your results daily. It’s very rewarding! 3. It is service focused. If you provide great service to internal and external clients, you will get results. In addition, everyone loves good service so you can make lots of friends throughout your career. 4. You can make a positive contribution to your company’s growth. You can make that as visible as you wish. 5. It’s possible to see exactly what you need to do to progress your career. You can plan your career from day 1. 6. You can know your own worth in the job market.

Do I need to be at senior level to know my worth?

Jan Reeves MICM

If you are a junior trainee, an experienced credit controller or collector, team leader or manager it’s almost always possible to understand your worth to an organisation. That’s very useful when you are planning the next steps in your career! Below are 2 examples of how to gain an understanding of how much you are worth to an organisation using standard DSO and 90+ results. However, before embarking on a strategy to reduce DSO or 90+ in your current or new role, you must first have an understanding of the direction your company is currently taking.

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

Understand your company’s current business focus: zz What is the current focus around sales? Is it to increase sales? Keep sales level? Is the focus controlled sales growth? zz And what about making a profit this year? What is the focus around this? Is growth or profit currently the most important? zz Is the company borrowing to fund receivables? What are the costs involved? Is there lots of cash and spare funds available? Understanding the answers to these type of questions is important for everyone involved in both the sales and credit/collection function. To move any business forward, everyone in it has to be working towards the same overall business goals. When senior management have signed-off on the current focus of the business, suitable and realistic DSO and 90+ targets can be agreed on. Once they are agreed, a credit policy and collections plan can be devised to achieve those goals. If you work in a credit or collections environment without understanding the business focus you can find yourself working against some other departments. That type of situation can be frustrating and disheartening. It would be very hard to enjoy your job working in that environment. For example: zz It may suit a business to hold shipments if the customer’s payment is 1 day overdue. It definitely wouldn’t suit all businesses. It depends on the overall business focus.

Human Resources

zz It could suit some organisations to give a customer a 90 day credit facility, for example if they are trying to win a new account. It definitely wouldn’t suit other organisations. zz Although a particular business may have trading terms of 30 days nett, the industry average DSO may be 60 days. In that instance, your business may be comfortable accepting a DSO of 60 days. Once you have an understanding of your company’s current business focus, and what their goals and expectations are, then you can work out how you can make the best contribution. Once you know that it will be clearer to work out your worth.

Examples: How to work out your worth (Adapt these to your current environment and circumstances) Example 1: Considering 90+ balances (This example is taken directly from a Sydney based Credit Manager) When John* joined Ryland Matrix* as Credit Manager, the ledger he took over had: zz Total ledger value of $70 million. zz 90+ balance $20 million Ryland Matrix* are a service company and operate in a very competitive environment. Most of their growth comes from repeat business and referrals so it was paramount that the $20m was collected without upsetting clients. Using an outstanding customer service approach, in a just a few short months, John’s* team were able to collect $19.5 million of the 90+ balance. The $19.5m went onto deposit at their bank: Result for Ryland Services: 1. Extra $19.5 million on deposit at 3% = $48.7K per month (extra profit $585K per annum) 2. ‘Potential bad debt reserve’ reduced by more than 97%

If you work in a credit or collections environment without understanding the business focus, you can find yourself working against some other departments. Result for John* and his team: 1. Much appreciation and recognition from the Company. 2. Bonuses and salary increases for the whole team according to their personal results. 3. Terrific results to add to everyone’s CV. Example 2. Considering DSO (Example taken directly from a Western Sydney based Credit Controller) When Mary* joined Buckerman Industrial Pty Ltd* their trading terms were 30 days from invoice date. However, the receivables Mary* took over were: zz Ledger value $5 million zz DSO average for the previous 12 months 68 days. The brief from the CEO and Finance Manager of Buckerman* was to reduce the DSO by 2.5 days a month to achieve a DSO of 38 days within 12 months. The business plan for the next 12 months was reviewed and a credit/collections plan agreed. With a structured and customer service type approach, and without losing any customers, Mary was able to reduce the DSO by an average of 2.5 days each month over the next 12 months. Result for Buckerman: 1. An average of $183K extra a month on deposit earning 3% interest = $2.2 million additional cash in 12 months and $36K in interest 2. Potential bad debt reserve’ reduced by more than $2 million

Result for Mary* 1. Two bonuses and a pay increase. 2. A great deal of recognition and thanks from senior management. 3. A marvellous result to add to her CV. The key to knowing your worth in the job market is to be aware of the results you are achieving. Then you can relate that to how much cash you are saving the company, in terms of interest, either on cash invested or loans. The credit/collections function is hugely important in any business. Businesses only survive if they are able to collect their receivables. The faster they collect their cash the more money they are able to make. With a little knowledge and planning you will be able to see the results you are having in terms of hard cash. Learn to understand your worth and to articulate the important contribution you are making to the company. Know your worth and take control of your career today! u

*Not their real names ^Jan Reeves has been involved in credit and collections her whole career, most recently as Managing Director of a specialist credit and collections recruitment company. She has now turned her focus to helping small businesses to get all their invoices paid by the due date. Using her experience as a business owner and a Credit Professional she has developed an online collections course, http://getpaidfortheworkthatyoudo.com/ , written especially to guide small business owners.

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

Veda Quarterly Business Credit Demand Index (September 2015 Quarter)

Moderate growth of business credit for September quarter • Overall business credit applications rose 1.6% (vs September quarter 2014) • Business loans (+1.8%) and asset finance applications (+6.7%) grew, trade credit weakened (-2.2%) (vs September quarter 2014)

• NSW’s position as a strong economic performer evidenced in business credit growth By Paul McFadden*

Paul McFadden

The Veda Quarterly Business Credit Demand Index, measuring applications for business loans, trade credit and asset finance, grew moderately by 1.6% in the September 2015 quarter. Asset finance applications grew (+6.7%), business loans grew (+1.8%), and trade credit declined (-2.2%) in the September quarter 2015 compared to the September quarter 2014. The Veda Business Credit Demand Index has historically proven to be a lead indicator of how the overall economy is performing. Veda’s data continues to indicate moderate growth in credit demand for business, but showed a slight decline from the annual growth rate of +3.7% in the June quarter. Veda’s General Manager, Commercial Risk and New Markets, Paul McFadden said: “With growth in the Australian economy remaining below trend, moderate business credit growth should be seen as a positive.” Overall

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

business credit applications eased in the September 2015 quarter (+1.6%). The softer conditions reflected across both mining and non-mining jurisdictions, however, non-mining states showed stronger demand for business credit. NSW (+5.9%) and Victoria (+2.5%) were the strongest states, followed by SA (+1.7%), ACT (+1.4%). Tasmania (-12.3%) was the only non-mining state to experience contraction. All mining jurisdictions experienced declining business credit applications for the September quarter 2015; Queensland fell by (-1.7%), WA (-4.5%) and NT (-10.7%). Business loan applications eased in the September quarter to +1.8%. Of the non-mining jurisdictions NSW (+9.6%), Victoria (+2.3%), and the ACT (+2.1%) enjoyed strong growth in applications, while SA (-1.4%) and Tasmania (-15.4%) recorded a fall. Business loan applications across the mining jurisdictions

Credit Management

Changes in Overall Business Credit Demand – Quarterly Year on Year % 7% 6%

6.0%

% Change YoY

5% 4% 3%

4.0%

3.7%

3.7% 3.1%

2.5%

2.4%

1.9%

1.6%

0.6%

1% 0%

-0.1%

-1% -1.1%

-2%

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 Quarter of Enquiry *Veda recomputes the entire index over its lifetime every quarter so there will be a slight adjustment to the above historical figures. Veda normalises the date for a like-for-like comparison.

experienced drops across all states, with Queensland (-0.9%), having a modest drop, while WA (-11.1%) and the NT (-19.0%) dropped sharply in the September quarter. Trade credit applications fell overall in the September quarter (-2.2%). Trade credit applications over the past year fell in NSW (-1.5%), Victoria (-2.8%), Queensland (-5.1%), Tasmania (-16.1%), the ACT (-4.8%) and the NT (-8.3%). SA (+5.5%), and WA (+1.4%) were the only two states to see growth in trade credit applications. The easing of trade credit applications was largely driven by weakness in the main category of 30-day accounts (-4.2%), with applications for seven-day accounts (+3.3%) seeing a lift.

Asset finance applications picked up in the September quarter (+6.7%). This represented an improvement in the annual rate of growth for asset finance applications from 4.0% in the June quarter. NSW (+10.7%), Victoria (+9.8%) and the ACT (+10.0%) saw strong growth in asset finance applications, followed by the NT (+2.8%), Queensland (+2.5%), SA (+1.3%) and Tasmania (+0.9%). WA (-3.4%) continues to see falls mirroring the downturn in mining-related construction work. “Changes to accelerated depreciation rules for small businesses in May’s Federal Budget caused a spike in demand for asset finance for items under $20,000 in the June quarter.

Demand for asset finance strengthened in the September quarter (+6.7%). “While growth in national credit demand was moderate, NSW’s position as a strong economic performer stood out in this quarter’s credit demand numbers. NSW led all states in overall business credit applications (+5.9%), business loan applications (+9.6%) and asset finance applications (+10.7%). NSW’s economy has been underpinned by growth in the construction and housing sectors, which have been performing strongly,” Mr McFadden said. u

*Paul McFadden is General Manager Commercial Risk at Veda.

“While growth in national credit demand was moderate, NSW’s position as a strong economic performer stood out in this quarter’s credit demand numbers...”

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

7 quick wins you get from phoning instead of (e)-mailing your customers By Aroud Visser*

Customer contact is what makes your customers pay faster, and cash is the fuel of your organisation.

Any time in credit management that is not spent communicating with your customers is time not adding value to your business. Customer contact is what makes your customers pay faster and cash is the fuel of your organisation. In our years of experience offering customers credit management software we have seen a large portion of organisations spending excessive time in pre-call preparation and prioritisation. By the time you’re ready to contact you customer it might be tempting to just send an email reminder. But in our view, depending on how your policies are set up and which type of relationship you (want to) have with your customer, phoning can be more effective than sending an (e)-mail or text message. Here are 7 reasons why direct customer contact is the better way to achieve results within credit management:

1. Proactiveness Phoning is a more proactive approach than an email or a letter. By phoning the customer you show that you are committed to your own cause as well as the customer’s – collaboratively removing barriers that are preventing them from paying that invoice.

2. Getting the right person

Aroud Visser

When you call the chances are higher you will get the right person on the phone. This is important if you are dealing with open invoices and

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

payments. Getting the right person on the phone gives you instant access to all the facts and details about the barriers mentioned above. And this also allows you to keep your customer contact information current and accurate.

3. Direct result In our experience no other medium achieves direct results like a phone call. When you have your customer on the phone you can do business instantly, rather than waiting for a response to an email or a letter. It takes the hassle out of putting next steps in place or letting the customer decide the next move.

4. Two-way commitment Sending a letter or email asks your customer for commitment, but it does not mean that they will give you that commitment. If you call your customers and discuss options with them, you will end up with a two-way commitment, rather than a one-way request.

5. Tracking dissatisfaction When you have your customers on the phone they can feed back any dissatisfaction that could stem from an invoice they have received. In this way you can move quickly to the root cause of the customer not paying, provide a solution and move on.

6. Building customer intimacy You have an agreement with your customer. Stick to your

Credit Management

policies and processes and let your customer know that you are expecting them to keep their promises. Communicate in a pragmatic business way but keep your communication friendly and personal. So stick to your agreements but don’t forget to apply the personal attention that a customer needs. Personal commitments by the customer take promises and performance to a different level.

7. Picking up on the less obvious signals Speaking to someone allows you to pick up on emotions and behaviour. You might be able to detect “hidden messages” and ask that extra question to get to the bottom of

the situation. In writing you do not know whether you are reading fact or fiction. All the above steps have something in common. By creating customer intimacy you start nudging your customers in the direction that you want them to go, by communicating and understanding. It is about achieving success through mutual commitment, rather than pushing through a process which could lead to conflict and jeopardize the long-term relationship. Sending emails and texts definitely have a place and can be very effective. Phone calls can often be seen as the more time-consuming option. But appropriate communication is what we are aiming for. Modern, focused credit collection

software can help you free up the time to pick up the phone and call those customers who need direct contact, by: —— prioritising which communication is appropriate for which of your customers, at which point in time. —— automating your administrative tasks, to give you more time to focus on customers. u

Aroud Visser is head of International New Business Development at OnGuard Netherlands. He enjoys sharing exposure to current international ‘best practice’ trends in credit management. Onguard is represented in Australia and New Zealand by Cosyn, OnGuard’s certified Business partner freephone 1-800-123 613 or email info@cosynsoftware.co.nz. Alternatively you can visit www.cosynsoftware.co.nz or follow @OnGuardHQ on Twitter to stay up to date with international best practice.

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

Staff engagement its not as scary as it sounds By Stacey Feaver MICM*

Staff engagement isn’t something that should be left up to the manager, this is the responsibility of everyone in the company. 18

Every good people manager will know the importance of staff engagement within a business, especially in a high stress environment like the credit industry. Every year we all face the struggles of that ever tightening budget, revenue targets and client retention levels. These are a just few things we are required to take into consideration every day. While trying to concentrate on the experience of the customer and looking after the people working for you, we are participating in two completely different battlefields. Hard work, right? Well, it shouldn’t be. As we shift into the silly season we should start considering the next year ahead. Now I know what you’re going to say! You’re still trying to negotiate Christmas with a smile on your face and 400 family members invading your lounge room for lunch on the 25th December. But trust me you won’t regret walking into a positive and infectious environment moving into the New Year and 2016 in all its glory. Why not make the change to encourage productivity and manage a high performing team? Richard Branson and other business royalty alike will agree, they have even spoken about the importance of their teams and owe a lot of their success to the people that surround them. They also have the view we need to treat our colleagues and team members like capable and smart adults. In doing this they will make

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

better decisions that will benefit the business. Australians work an average of 60 hours a week from the age of 22 – 65. This is over 14 years of our entire lives in the office! While you’re digesting that information think about how much harder it would all be if the team you worked in wasn’t a cohesive and functioning unit? You will consistently fight a losing battle and none of this is good for the business you work for, or the people involved on the ground. Staff engagement isn’t something that should be left up to the manager. This is the responsibility of everyone in the company. From the CEO making those sometimes difficult decisions, to the people a business can’t live without, which is every single other person in the company. Regardless of the size of the teams, this effects everyone in the exact same way. Keep in mind our teams usually work better when they feel supported and respected by the company that pays their salary. We all have a common goal and we are essentially on the same team, so why would working against each other be a productive environment for anyone? Driving the employee engagement can be hard, but when done correctly the result is extremely satisfying for both yourself and the team you’re working with. To get all this going there are a couple of very easy things everyone

Credit Management

can do to start moving in the right direction. Have your team set their own values. Take the time to listen to each individual and what is important to them to succeed. Your role in making sure this is an effective exercise is to steer the conversation towards tangible results. Encourage brainstorming, no matter how wild it may seem. Encourage everyone to think about their initiatives and how they can execute these ideas successfully. Consider leaving them alone to discuss the different ideas. If you have given them clear guidelines of what you are expecting, and trust them, you will be surprised with what is presented back to you. Then, as a group, decide on the three most important and tangible ideas. Plan how you’re going to implement them and place times frames around it. Be realistic with this, you don’t want to under deliver. There are a few different benefits that come from this exercise. Your team will feel valued and listened to, as well as gaining a sense of accountability and responsibility.

“Have your team set their own values. Take the time to listen to each individual and what is important to them to succeed.” When humans feel like they are making a difference and their opinions matter, they automatically participate more willingly. Action Plans are a vital part of making sure you can track and keep ahead of what you are doing. The corporate world is constantly changing, being able to keep track of where everything stands is paramount to the success of a business. Delegate tasks to everyone to play on their strength as an individual. Have you got one team member that is exceptional in a specific task within the workplace? Can they transfer this knowledge to the rest of the team? Why not have them work amongst themselves to organise a small training session? Then follow up on the progress of these items in regular pulse checks. Once

everyone is satisfied with the outcome, everyone can agree on the next item to tackle. Repeat this and don’t stop. This exercise isn’t designed to change company policy but to encourage participation and responsibility, demonstrate trust and move in the direction of a team that work to the best of their ability to achieve an overall goal. And the goal for all of us is to be successful, both individually and as a business. Remember that we are only as great as the team we work with. And from one manager to another, it worked with my team and it can with yours. So what will your 2016 look like? u

Stacey Feaver is State Collections Manager for Austral Mercantile Collections Pty Ltd www.australmercantile.com.au

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

Impact of Deeds of Company Arrangements on secured creditors By Joseph Scarcella MICM*

The voluntary administration regime in Part 5.3A Corporations Act 2001 allows reconstruction possibilities to be pursued via a deed of company arrangement (DOCA) in such a way that, if creditors so desire, a legacy of debt may be extinguished so that liquidation may be avoided. Implicit in that is that the company will thereby be permitted to return to mainstream commercial life1 and have a “fresh start”. There have been two recent decisions of the Courts2 that materially alter the perception of the position of a secured creditor once a DOCA has been executed. The previous thinking was that secured creditors who did not vote in favour of a DOCA had an unfettered right to exercise their security rights over assets of the company to recover amounts owed to them. Recently, two decisions in Western Australia and New South Wales have cast some doubt on the ability of secured creditors to maintain their debt post the execution of a DOCA. The impacts of these decisions are explored in this article.

Understanding the Legislative Framework

Joseph Scarcella MICM

Section 444A(4)(d) Corporations Act 2001, provides that the instrument setting out the terms of the DOCA to be voted upon by creditors at a second meeting must specify to what extent the company is to be released from its debts.

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

Section 444D Corporations Act 2001, broadly provides that a DOCA binds all creditors of the company but does not prevent a secured creditor from realising or otherwise dealing with their security interest except in so far as the DOCA so provides and the secured creditor voted in favour of the resolution to execute that DOCA at the second meeting of creditors of the company. The highlighted words above have particular importance. Firstly, it is usual that most DOCAs provide that it will bind all creditors who have a debt or claim against the company at the date of administration. However, nowhere in s444D (nor Part 5.3A for that matter) is the secured creditor’s debt referred to as being preserved post the execution of DOCA. All that is preserved by the legislative framework is the right to realise and deal with a security interest. The statutory framework contemplates that the DOCA must state what debts are to be released and the extent of such release.

The Components of a Security Interest A security interest also has a proprietary element, that part of it which is said to attach to the assets of the grantor company. That right allows the secured creditor a right of action against the property of the company. It is common for modern security interests to attach to present and future (known as after acquired) property. Thus there are

Legal

two proprietary rights, those against existing assets, and those against future assets. Further, a security interest has a personal element, being a claim against the company itself (as distinct from the assets) for any debt owed. At law proprietary rights under a security interest exists regardless if a debt is owed to the secured creditor or not. That is why even though you may pay off your home loan (the debt), the bank still needs to release the mortgage (the security interest) over your house.

The DOCA in Question In decision of Bluenergy Group Limited, the particular DOCA provided (like most DOCAs) that: zz The DOCA binds all persons having a Claim against the company; zz On and from the commencement of the DOCA, that all Claims against the company would be released and discharged; zz “Claim” was defined to include a debt or a present future or contingent claim against the company; zz A secured creditor could realise or otherwise deal with their security except to the extent the secured creditor voted in favour of the DOCA or released its security. A particular secured creditor in question did not vote in favour of the DOCA, nor did the DOCA provide. The NSW Supreme Court had to consider, amongst other things, if: (a) The secured creditor’s debt was released? (b) If the secured creditor’s security remained? (c) If the secured creditor’s security extended to property acquired after the DOCA?

Does a DOCA release a secured creditor’s debt? The NSW Supreme Court found that nothing in the structure of Part 5.3A Corporations Act 2001 preserved the debt of a secured creditor if the DOCA provided that all debts of the company are to be released without saying anything about preserving the debts of a secured creditor. The reason for this is that s444D only preserved the proprietary rights of the secured creditor.

Does a DOCA release a security? Given that the DOCA in question (and s444D) expressly preserved the right of the secured creditor to realise and otherwise deal with its security interest, the security remained and still attached to the relevant assets of the company. However, that security interest no longer secured any debt obligation, the debts having been released by the entry into the DOCA.

Does a DOCA extinguish security over future property? The Court found that the existence of a continuing security extending indefinitely into the future over a company’s after-acquired property, where the DOCA provided for the release of the secured creditor’s debt, would place a very significant practical obstacle in the way of any future operation of a company that emerged after a DOCA, including potentially preventing the obtaining of new secured finance. The Court found this was inconsistent that a DOCA was to give a company a “fresh start”. This interpretation places a restriction on the scope of the assets available to a secured creditor seeking

to “realise or otherwise deal” with its security. Only those assets which are held by company as at the time of the execution of the DOCA would be available.

What are the practical implications? zz Secured creditors should ensure that a DOCA expressly confirms that their debts are not released. zz Unless debts and security interests of secured creditors are preserved by a DOCA, it is likely that secured creditors will —— vote down any proposals for a DOCA thus reducing the prospects of restructures and companies having a fresh start; and —— enforce their security interests immediately (including by appointing receivers) – this will limit the ability of restructures and increase the costs associated with external insolvency administrations. zz If secured creditors do not act as suggested above then companies entering a DOCA will have a lower debt burden and a greater chance of restructure. u

*Joseph Scarcella is a partner at Ashurst in the Restructuring & Special Situations Group in Sydney. www.ashurst.com

FOOTNOTES: 1 Blacktown City Council v Macarthur Telecommunications Pty Ltd (2003) 47 ACSR 391 2 Australian Gypsum Industries Pty Ltd v Dalesun Holdings Pty Ltd (2015) 106 ACSR 79 and In the matter of Bluenergy Group Limited (Subject to a Deed of Company Arrangement) (Administrator Appointed) (2015) 107 ACSR 373

At law proprietary rights under a security interest exists regardless if a debt is owed to the secured creditor or not. That is why even though you may pay off your home loan the bank still needs to release the mortgage over your house.

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

Will your terms of trade and contracts be deemed unfair? By David Francis LICM*

From 12 November 2016 the protections to consumers from unfair terms in standard form contracts in Part 2.3 of the Australian Consumer Law (ACL) will be extended to small businesses. This will apply to the supply of goods or services other than financial services or products in the sale or grant of an interest in land. Financial services or products will be subject to identical provisions in the Australian Securities and Investments Commission Act 2001.

Why has this happened?

David Francis LICM

When the unfair terms protections were first put forward in 2009 they were not confined to consumers but had been extended to small businesses. However, following extensive lobbying (including by the AICM) the extension to small business was excluded from the amendments to the ACL when it commenced operation on 1 January 2011. Nonetheless, that extension to small business remained part of the Liberal/National Party Coalition policy. When the Coalition gained government it signalled its intention to introduce the extension of the unfair contract terms provisions to small business. Although there was significant opposition from industry the government decided to proceed with the amendments necessary to extend the Unfair Terms Law to small business. In the Explanatory Material to the 2015 Bill the following justifications

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

were put forward for the extension of the unfair contract term provisions. zz Small business is vulnerable As they are often offered contracts on a “take it or leave it” basis and lack the resources to understand and negotiate contract terms which leads to potential detriment where unfair contract terms are enforced. zz Transfer of Risk to Small Business Unfair contract terms often allocate contract risks to the party that is less able to manage them (usually small businesses), as they are less likely to have robust risk management policies or be in a position to absorb the costs associated with a risk allocated to them eventuating. zz Lack of Legal expertise The cost of obtaining legal advice, particularly for low-value contracts can result in small businesses not entering contracts due to their lack of confidence in understanding and negotiating terms. This may mean they miss out on market opportunities. zz Unfair business dealings laws exist but not for contracts. Existing laws largely address ‘unfair’ behaviour in business dealings, rather than unfair contract terms. Moreover, the protections available under the ASIC Act for unfair contract terms are currently only afforded to consumers and not businesses. zz More efficient allocation of risk The extension of the unfair contract terms protection to cover small businesses will reduce the incentive to include and enforce unfair terms in small business contracts, providing a

Legal

more efficient allocation of risk and supporting small business’ confidence in agreeing to contracts. zz Limited to “Low-value” contracts Small businesses also engage in highvalue commercial transactions that are fundamental to their business, where it may be reasonable to expect that they undertake appropriate due diligence (such as seeking legal advice). Limiting the extension to lowvalue small business contracts that are standard form will support timepoor small businesses entering into contracts for day-to-day transactions, while maintaining the onus on small businesses to undertake due diligence when entering into high-value contracts. The amending legislation was introduced into the Commonwealth Parliament on 24 June 2015, passed both houses on 20 October 2015 and received the Royal assent on 12 November 2015. The Act provides that it commences operation 12 months after assent to allow businesses time to adjust their policies, procedures and paperwork.

What contracts are affected? The amended law will apply to contracts entered into or renewed on or after 12 November 2016 which are: zz standard form contracts zz for the supply of goods or services (or the sale or grant of an interest in land) zz between parties at least one of which employs less than 20 people, including casual employees employed on a regular and systematic basis (which makes it a “small business”, as defined by the amended Act). If a business has subsidiaries which are separate legal entities, employees of its subsidiaries will not be included in the employee headcount. zz contracts where the upfront price payable under the contract is no more than $300,000.00 or, if the contract is for more than 12 months, no more than $1 million.

Credit applications, guarantees and other security documents are likely to be standard form contracts for the purposes of the law. If the contract is varied on or after 12 November 2016, the amended law will apply to the varied terms.

What is a standard form contract? A contract will be presumed a standard form contract if a party to a proceeding alleges that it is. The burden will be on the other party to prove otherwise. The court must consider the following when deciding whether a contract is a standard form contract for the purposes of these laws: zz whether one of the parties has all or most of the bargaining power in the transaction zz whether the contract was prepared by one party for any discussion occurred between the parties about the transaction zz whether the other party was, in effect, required either to accept or reject the terms of the contract in the form in which they are presented zz whether the other party was given any real opportunity to negotiate terms contract whether the terms of the contract take into account the specific characteristics of the other party or the particular transaction. A court may take into account any matters it considers relevant, but must take into account the above. Credit applications, guarantees and other security documents are likely to be standard form contracts for the purposes of the law. It is difficult to see how a trade credit provider relying on a credit application and guarantee would ever be able to rebut the presumption that those documents were standard form contracts.

What contracts and terms are excluded? zz Contracts entered into before 12 November 2016 (unless rolled over or renewed on or after this date). zz Shipping contracts. zz Constitutions of companies, managed investment schemes or other kinds of bodies. zz Certain insurance contracts, such as car insurance. zz Contracts in sectors exempted by the Minister (none declared as yet). zz Terms that define the main subject matter of the contract. zz Terms that set the upfront price payable under the contract. zz Terms that are required or expressly permitted by law of the Commonwealth, or a State or Territory. My view is that a retention of title provision giving rise to registration of a purchase money security interest under the PPSA is such a term.

What is an unfair contract term? There are three limbs of unfair contract terms, the Act says that a term of a small business contract is unfair if it: zz would cause a significant imbalance in the parties’ rights and obligations arising under the contract (1st limb); and zz it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term (2nd limb); and zz it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on (3rd limb).

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

These 3 limbs must be proven by the small business in order to escape the alleged unfair term. However, for the purposes of proving the 2nd limb, a term of the contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the trade creditor (who would be advantaged by the term), unless the trade creditor proves otherwise. In determining whether a term of a consumer contract is unfair, a court may take into account such matters as it thinks relevant, but must take into account the following: (a) the extent to which the term is transparent; (b) the contract as a whole.

Transparency of a term A term is transparent if it is expressed in reasonably plain language, legible, presented clearly and readily available to any party affected by the term. Terms that may not be transparent include terms that are hidden in fine print or schedules, or that are phrased in legal, complex or technical language.

The contract as a whole While a term in isolation may indicate it is unfair the court will consider it in light of the contract as a whole. Some terms that might seem quite unfair in one context may not be unfair in another. Conversely, if a particular term was decided by a court in one case to be fair, this does not mean it will always be fair. For example, a potentially unfair term may be included in a small business contract but may be counterbalanced by additional benefits – such as a lower price – being offered to the small business. However, favourable terms may not counterbalance an unfair term if the small business is unaware of them, for example, implied terms, terms hidden in fine print, in a schedule, in another document or written in legalese.

Other matters The ACL provides that the court may also take into account such other matters as it thinks relevant. It is likely that the court would take the following matters into account in most situations: zz pre-contractual conduct of the parties zz other options available to small business at the time of the contract zz the notice given to small business customers about the terms of the contract, particularly any unusual terms zz any explanation given to small business customers about the terms of the contract zz whether a small business had reasonable opportunity to consider the terms before concluding the contract; and zz whether small business should or could have sought professional advice before entering into the type of contract in question. Section 25 of the Act also provides 13 or 14 examples of the types of terms of the contract that might be unfair. However, space does not allow those to be set out.

Enforcement of the new law The ACCC and state and territory consumer protection agencies share responsibility for enforcement of the unfair contract terms protections for small-business goods and services. ASIC is responsible for enforcing the protections in relation to financial products and services. If a trade creditor sues a small business to collect a debt and the court makes a declaration that a term is unfair, that term is void and cannot be relied on by the trade creditor as part of the contract.

the structure of your credit documentation distinguishing between security terms (which you won’t change) and trading terms (which you may change). If you rely on guarantees with charging clauses, be sure you have them all in place with all the customers you want them from by 11 November 2016. Conduct a survey of your customer base to work out how many fall within the small business definition (i.e., fewer than 20 employees) so you can develop an informed strategy. If you want to rely on your current terms and conditions for customers with 20 or more employees, decide if you want to develop 2 sets of terms, one for small business and another for the rest. My view is that will be unworkable. Work out what terms can be mutualised without too much harm (e.g., unilateral variation) and change them to avoid needless hassles. Alternatively, and despite the avowed purpose of the amendments, consider if there is any point at all in amending your terms and conditions. A lot of the time you won’t know on the day of contract whether customer had fewer than 20 employees. It may be that the credit policy will need to be adjusted to allow negotiation if it seems that the small business can prove it. Develop a process to annually monitor small business customers so that if a customer moves from less than 20 employees to 20 or more employees the relevant terms and conditions can be varied so that the contract is outside the Unfair Terms Law.u

What to do during the transitional period? The following are brain-storming ideas, not advice. zz Use the next 12 months to change

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

*David Francis is a Solicitor and Director of Francis Commercial Lawyers Pty Ltd Tel: (02) 9587-9002 Fax: (02) 9587-9003 Email: davidg.francis@bigpond.com

Legal

Case note Central Cleaning Supplies (Aust) Pty Ltd -vElkerton [2015] VSCA 92 By Frank Gambera MICM*

The Court of Appeal of the Supreme Court of Victoria has upheld the security interest of Central Cleaning Supplies (‘the Supplier’) over the supplies of cleaning products and equipment (‘goods’) to Swan Services (‘the Customer’).

Summary of facts zz The customer in 2009 completed and signed ‘An Application for Commercial Credit Facilities’ which was required before the supplier would supply goods on 30 day terms. zz Clause 2 of the Credit Application provided ‘The supply of goods by the seller is governed by the seller’s Standard Terms and Conditions as in force from time to time’. zz The Supplier’s Terms and Conditions of Supply were

Frank Gambera MICM

printed on the invoices issued by the Supplier which included a standard ROT clause. The Terms and Conditions of Supply were not attached nor did they form part of the Credit Application. zz The Supplier supplied to the customer from September 2008 to May 2013 when an administrator was appointed to the Customer. zz The Supplier did not register its security interest over the goods supplied and the subject of the case. zz The Supplier was unsuccessful at trial. The Trial Judge determined that each invoice for supply was a separate contract. The relevant separate contracts came into effect after 30 January 2012, and the transitional provisions of the Personal Property Securities Act (‘the Act’) did not perfect the contracts.

Summary of the decision of the Court of Appeal zz The Court of Appeal overturned the Trial Judge’s decision. zz The Credit Application did not create a contract between the Supplier and the customer. However the contract between them was formed when the supply took place. The customer did not become bound by the Credit Application Terms until the first supply of goods after the Credit Application was made. zz The Supplier’s supply of goods was acceptance of the customer’s application for credit by conduct. The delivery of the goods which the customer had ordered and the

sending of the invoice confirmed that the supply was on 30 day credit and this was the conduct through which ‘the supplier signified its acceptance of the customer as an account customer’. The sending of the invoice was the critical step which confirmed that credit was being provided.

Commentary zz The PPSA requires a formal security agreement to be in place before supply of goods. zz The Court considered that a formal agreement for all future supplies of goods existed. In this case the formal agreement consisted of the Credit Application and the invoices which contained the Terms and Conditions of the Sale. zz Usually the Terms and Conditions of Supply would form part of the Credit Application and the Terms and Conditions of Sale would either be included in or be attached to the Credit Application at the time the customer signed the Credit Application. zz This decision may provide some comfort to suppliers where they rely on Credit Applications similar to those in this case and also possibly where the Credit Application cannot be found but there are documents such as emails and invoices which contain terms which can be inferred as constituting a formal security agreement. u

*Frank Gambera is Director for McMahon Fearnley Lawyers www.mcmahonfearnley.com.au

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

PPS

Lower PPSR costs for equipment hire businesses By Moses Samaha MICM*

Small to medium hire and rental businesses will benefit from reduced PPSR costs, thanks to changes to the Personal Property Securities Act 2009.

This makes the treatment of leases of serial-numbered goods and nonserial-numbered goods consistent. For many businesses the outcome will be less confusion, fewer registrations and lower costs.

What has changed? From 1 October 2015 the changes reduced the number of leases that hire and rental businesses need to protect with PPS registrations. Previously leases of serialnumbered goods (such as cars, trucks, caravans, cranes and watercraft) lasting more than 90 days but less than 12 months were deemed PPS leases and needed to be registered. On 1 October 2015 the definition of a deemed PPS lease was narrowed. Now leases of serial-numbered goods of less than 12 months may fall outside the definition and no longer need to be registered on the PPSR.

Moses Samaha MICM

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

What has not changed? The law reform won’t apply to leases: zz With a term of more than 12 months; zz Capable of being renewed beyond a 12 month term; zz Of an indefinite term; zz Entered into before 1 October 2015. It’s important to seek legal advice in relation to your specific circumstances to understand the action you should take. u *Moses Samaha is General Manager, Commercial/Property Solutions & B2B Channels at Veda. www.veda.com.au

PPSR

AFSA launches new PPSR guide for business The Australian Financial Security Authority (AFSA) is the body responsible for administration of the Personal Property Securities Register and they released a new guide designed to increase awareness of the Personal Property Securities system on 13 November 2015. The Guide was created by Associate Professor David Brown from the University of Adelaide. Mr Brown is co-author of the book Australian Personal Property Securities Law (LexisNexis, 2012) and he teaches and writes on the Personal Property Securities Act, insolvency law and property law. An acknowledgement is given by Mr Brown to James Neate (AICM Director and Law & Legislation chair), Gail Crowder (AICM SA Division President) and several other AICM Members and CCE’s for their assistance in participating in a feedback group coordinated by James Neate. The feedback group provided firsthand accounts of issues that Members face and their real world experiences of difficulties and lack of broader understanding of the existence and operation of the Register. This guide is targeted at small businesses, their accountants, financial advisers and lawyers. It was released by the AFSA Chief Executive, Veronique Ingram who said “Our new business guide – titled Are you in business? – is intended to help Australian businesses not familiar with the practical implications of this law”. “It also explains how they might benefit from using the national online system – the Personal Property Securities Register, also known as the PPSR” Ms Ingram said. The guide is well designed and clearly explains some of the basic concepts including clarifying that “Personal Property” relates to Goods and/or Assets and “Securities” relates to Debt. The guide may be useful for credit professionals attempting to educate team members and colleagues about the importance of the PPSR or to pass on to their customers to assist with their understanding of the PPSA. Gavin McCosker, Registrar of Australia’s Personal Property Securities system, said “The business guide is

BEFORE YOU SAY “NOTHING TO DO WITH ME” ‘Personal Property’ and ‘Securities’ are legal terms. This roughly translates to:

designed to present information on the law and the PPSR in a way that is easy to understand”. “We’ll build on the release of the business guide with the regular development and release of more resources – including products tailored for specific sectors – through a variety of channels,” he said. The PPSR business guide is available on the PPSR website (www.ppsr.gov.au). The AICM joins Mr Brown in thanking the following AICM members for assisting with this guide: zz Gail Crowder, Executive Director, Kemps Credit Solutions, and President SA Division AICM; zz Nigel Hillier CCE, Credit and Administration Manager, Coopers Brewery; zz Anne Wilkins CCE, National Credit Controller, FMG Engineering; zz Nick Pontikinas, FP&A and Collections, Boart Longyear; zz Kerry Hammill CCE, Consultant, AMA Collection Services; zz Trevor Goodwin CCE, Manager Credit Services, National Credit Insurance (Brokers) Pty Ltd; zz James Neate MICM, Partner, Lynch Meyer, and Director, AICM. u

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

PPS

The money or the box – reforming a perplexing PPSA By Oliver Shtein*, Executive Lawyer, Bartier Perry

As credit managers will know, since January 2012 Australia has had a complex new law about security interests – the Personal Property Securities Act 2009 (Cth) (PPSA). The PPSA has put in place a whole new landscape for retention of title sellers and other owners who seek to recover their goods in the insolvency of the customer. If a PPSA registration is not made to the letter of the law, then title to the goods supplied can be lost under the vesting and priority rules in the PPSA. The effect on the hire industry has been particularly dramatic as hires can be deemed to be ‘security interests’.

The Whittaker Report

Oliver Shtein

A review of the PPSA was tabled in Federal Parliament in March 2015. However to date nothing has been adopted. What is clear from the Report is that the PPSA is excessively complex. There are many questions in the registration process which have little meaning in practice but which, if wrongly answered, could render the registration invalid and expose businesses to loss of ownership of goods in the insolvency of their customers. In our view little effort was made to make the system accessible, simple or intuitive. The legislation itself is also loaded with exceptions and special rules. The Report finds that all this has meant the PPSA has not delivered the benefits it was intended to.

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

The Report proposes (amongst many other things) a substantial simplification of the register. It recommends removing or simplifying many of the inputs to a typical PPSA registration. It recommends removing: zz The box that indicates whether the interest is a ‘purchase money security interest’ (PMSI). More about that below. zz The question whether the collateral is consumer property or commercial property. zz The question whether the security interest is subordinated. zz The question whether proceeds are claimed. This is a confusing question and no-one ever answers ‘no’ to it except by mistake. zz The question whether the collateral is inventory. Another misconceived question which for highly technical reasons we won’t go into here. zz The requirement to register against the ABN of certain corporate customers acting as trustees of trusts. Creditors will not have to negotiate the difficult issue of whether they have been dealing with a trust or not. What about hire? The hire industry is undoubtedly the victim not the beneficiary of the PPSA. The industry continues to advocate for the PPSA to be amended to exclude hire, so as to prevent more losses of hired equipment in customer insolvencies. The Whittaker

PPS

recommendations fall far short of what the industry wanted. The Report recommends that indefinite hire or lease no longer be a deemed security interest and that a uniform period of one year’s actual hire be the entry point to the PPSA. However this still cuts across the hire industry where certain kinds of goods (site sheds, vehicles, formwork, generators etc) can sometimes be deployed for more than a year especially on larger projects. So even if the Report is adopted, hire businesses will still stand to lose the ownership of capital assets that they hire out with these assets being made available to banks. In fact the Report specifically recommends preserving the right of the banks to claim hired assets. If the customer is a large one this can be (and has been) fatal to hire businesses.

How would PPSA’s casualties fare under a post-Whittaker PPSA? From a review of the decided Court cases in Australia and some of our own files we have compiled a short list of PPSA mishaps and asked how suppliers would fare if the PPSA were amended as the Whittaker Report proposes. The Maiden Civil case – NSW Supreme Court In this case a company (QES) hired two caterpillar excavators to a construction business (Maiden Civil) which became insolvent. The excavators were successfully claimed by the receiver appointed by a lender to Maiden Civil (Fast Finance) even though the excavators were never actually property of Maiden Civil. QES suffered the loss of its excavators because the hires were of motor vehicles for more than 90 days and QES made no registration against Maiden Civil. The 90 day period was changed to one year by legislation in 1 October 2015. But the same result would obtain under the

Whittaker recommendations if the hires were for more than a year. The Doka Formwork case – Victorian Supreme Court Doka was a formwork hire business that lost about $1million in formwork in the insolvency of a builder customer. Doka was caught by PPSA because it had the formwork out on indefinite hire. Under Whittaker it would only be caught once the one year threshold is crossed. Doka actually had made a registration but it was one day late. Doka fell foul of a rule in the Corporations Act (section 588FL) that applies in parallel to PPSA. The rule in 588FL applies if no registration is made within 20 business days of the security agreement. Whittaker recommends that section 588FL be repealed. Cold comfort. Spiers Earthworks – West Australian Supreme Court Spiers lost valuable plant and equipment which it had sold on a ‘rent to buy’ basis as part of a business sale. The hirer/purchaser became insolvent and the equipment was taken by the hirer/purchaser’s bank. The security interest was security ‘in substance’ – not time dependent. As with retention of title there needed to be a registration under PPSA. The Whittaker Report would not change this outcome. Retention of title supplier A – the money or the box This new client of ours had resolved to tackle PPSA registration without specialist advice. It supplied several million dollars’ worth of its product to a business which became insolvent having paid for virtually none of it. The client made a registration but didn’t tick the PMSI (‘purchase money security interest’) box. A bank took an ‘all assets’ security for a refinancing of the customer. The bank made its registration before the client’s. The

bank has claimed priority over the product supplied – essentially because the PMSI box wasn’t ticked. The Whittaker Report recommends the PMSI box be abolished. as the Report finds it was never necessary in the first place. The PMSI box has been a source of many other PPSA mishaps especially in the hire industry where it is often not appreciated that a hire of goods is deemed by the law to be a PMSI. Retention of title supplier B This hire company client of ours had agreed equipment hire terms with Company X and had made a good registration against Company X. However a few months into the hire, there was a ‘business restructure and transfer’ in the customer group. Our client was asked to stop invoicing Company X and to invoice related company Y instead. Not thinking too much about PPSA, the client obliged. Company Y then became insolvent and its liquidator claimed that the client was a supplier to Company Y against which it had not made a registration. This case will turn on its facts but in this kind of case if there was truly a new contract for supply on retention of title to Company Y there needs to be a registration against Company Y.

Conclusion If and when the Whittaker recommendations are adopted they will bring a welcome simplification to the register. They will not do much for those who are oblivious to PPSA or not very attentive to the complexities and pitfalls that will remain. Some businesses will look back and wonder why they were caught by rules that were never needed in the first place. u

*Oliver Shtein is a corporate and commercial lawyer and leads Bartier Perry’s PPSA team. He is the adviser to Australia’s Hire & Rental Industry Association on PPSA issues and PPSA reform since 2011. Ph: (02) 8281 7868, email: oshtein@bartier.com.au

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

2015 National C

YCPA Finalists – David Brennan (WA), Tate O’Connor (SA), Patrick Barry (Vic/Tas), Michael McDowell (Qld) and Kimberley Hale (NSW)

Dr Craig Latham, Deputy Australian Small Business Commissioner

Nerida Caesar, Veda.

Panel of Economists M. Witts (ING Direct), P. Bloxham (HSBC), J. Fabo (ANZ) and A. Stabback (AB+F magazine)

Moses Samaha MICM, Veda.

Debbie Piening MICM, Caltex Credit Team of the Year Winner.

Credit Managers Panel. 5 CCE’s.

Vicki Writer, founder of The 360° Solution™.

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

Conference

Darin Milner MICM, D&B.

Victor Walter QBE.

Michael Seddon, ATO and Adrian Brown ASIC.

Clarke Butler, CEO of D&B.

Adrian Heath.

James Neate MICM – Conference MC.

New and recertifying CCE’s.

Delegates at the Conference.

To see all the conference photos please go to www.creditnetwork.com.au/photo-gallery/

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Please note: you need to be registered to see all photos. Registration is free.

aicm Training News Legal

Drive and expand your business into the future with language, literacy and numeracy skills Australian businesses are dynamic and constantly changing and the workforce needs to be as well. Progressively higher levels of language, literacy and numeracy (LLN) are required to respond to increasing skills requirements in order to adapt to change and expand your business. International surveys and research in this area indicates that there are significant LLN issues for the workforce. The findings paint a disturbing picture. 93% of surveyed employers identified a wide range of impacts on their businesses from low level literacy and numeracy skills. The most significant impacts were inadequate completion of workplace documents and reports (21%), time wasting (17.7%) and materials wastage (11.5%). In addition, employers indicated what corrective measures they had tried. Over 30% of companies provided internal company training and 20% offered skill development support.

Why are workplace language, literacy and numeracy skills important? Modelling undertaken by the Australian Workforce and Productivity Agency indicates an increased industry demand for higher level skills. This will be difficult to achieve with 4.2 million, or 40% of the workforce currently below the minimum language, literacy and numeracy (LLN) standard needed to function in a knowledge economy. Building LLN skills is critical to increasing labour force participation and increasing productivity in a higher skilled economy. Australian workplaces are dynamic and constantly changing. The workforce needs to respond to increasing skills requirements brought about by new technologies, new work processes and increased compliance and quality assurance measures. Progressively higher levels of language, literacy and numeracy are required to support this.

What is the current situation? In 2006 the Australian Bureau of Statistics (ABS) conducted the Adult Literacy and Life Skills survey. Just over half (54%) of Australians aged 15 to 74 years have been assessed as having the literacy skills needed to meet the complex demands of everyday life and work.

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

Results were similar for document literacy (53%) and numeracy, with 47% achieving this level. Major attention was devoted to this issue in the wake of the survey which found that many Australians were below level 3, generally accepted as the “minimum required for individuals to meet the complex demands of everyday life and work in the emerging knowledge-based economy.”

What are employers saying? The Survey of Workforce Development Needs 2012 addressed the issue of workplace literacy and numeracy. Specifically, the survey asked about the impact of low literacy and numeracy skills on business and what measures have been used by workplaces to make improvements in this area. In relation to the impact of low literacy and numeracy skills on business, employers reported experiencing: zz Inadequate completion of workplace documents or reports = 21.1% zz Time wasting = 17.7% zz Material wastage = 11.5% zz Recruitment difficulties = 8.3% zz Financial miscalculations = 6.8% zz Ineffective work teams = 6.7% zz Not applicable to the business = 6.6% zz Staff unable/unwilling to take on new work/tasks = 6.4% zz Non-compliance = 6.3% zz Staff lack confidence = 5.2% Over 93% of surveyed employers identified a wide range of impacts on their businesses. Only 6.6% of employers thought that this issue was not applicable to them. These results are very similar to those reported in a previous survey undertaken as part of the National Workforce Literacy Project. Across industry sectors there was some variation from the effects of inadequate LLN capabilities. Inadequate completion of workplace documents and reports was shown to be most strongly experienced across construction (22.4%), mining (21%) and services sectors (20.4%). Time wasting was also a large issue for mining (19.4%) and construction (19%) compared to manufacturing (16.2%) and services (14.5%).

aicm Training News Manufacturing experienced the highest levels of materials wastage (14.2%) followed by construction (13.8%) and mining (8.1%). Staff being unable/unwilling to take on new work and ineffective work teams most affected the manufacturing sector, 10.3% and 10% respectively, while low levels of LLN impacting on

Legal

recruitment difficulties (10.6%), financial miscalculations (9.8%) and non-compliance (8.1%) were most strongly felt in the services sector. The AICM’s Certificate and Diplomas are being updated to ensure they also equip students with LLN skills as well as Credit skills.

For further information: https://www.ibsa.org.au/sites/default/files/media/No%20More%20Excuses%20ISC%20response%20to%20LLN%20challenge.pdf

2015 – 2016 Face to Face Training Calendar MELBOURNE

SYDNEY

10th February – Implement risk management strategies (C,4)

18th & 19th February – Manage factoring and invoice discounting arrangements (E,D)

11th & 12th February – Manage factoring and invoice discounting arrangements (E,D)

10th March – Manage risk and policies and procedures (C,D)

21st & 22nd March – Legal Compliance (C,D and 4)

11th March – Implement risk management strategies (C,4)

14th April – Personal Insolvency (C,D)

17th & 18th March – Legal Compliance (C,D and 4)

13th April – Manage overdue accounts (C,4) 18th May – Corporate Insolvency (C,D) 19th & 20th May – Manage factoring and invoice discounting arrangements (E,D) 21st & 22nd June – Developing your credit policy and procedures (C,D)

BRISBANE 8th & 9th February – Manage factoring and invoice discounting arrangements (E,D)

22nd April – Manage overdue accounts (C,4) 23rd May – Corporate Insolvency (C,D) 24th & 25th May – Manage factoring and invoice discounting arrangements (E,D) 27th & 28th June – Developing your credit policy and procedures (C,D)

TABLE OF EXPLANATION: C= Core Unit

25th & 26th February – Legal Compliance (C,D and 4)

D = Diploma

8th April – Manage overdue accounts (C,4) 9th May – Corporate Insolvency (C,D) 10th & 11th May – Manage factoring and invoice discounting arrangements (E,D) 8th & 9th June – Developing your credit policy and procedures (C,D)

Please register your interest early, as there is a minimum requirement of 8 students to conduct face to face training.

21st April – Personal Insolvency (C,D)

24th February – Implement risk management strategies (C,4)

7th April – Personal Insolvency (C,D)

Should you wish to receive a nationally recognised Statement of Attainment, you will be required to undertake the online assessment at completion of the face to face training.

E = Elective Unit 4 = Certificate IV

IMPORTANT INFORMATION: You do not have to be a current AICM student undertaking a full qualification to attend any AICM face to face training. You may wish to undertake a program for your professional development or enhance and update your current skills and knowledge.

Recent Graduates Eleanor Tierney Lu Wang Neal Hinrichsen Song Hua Zhou Kylie Wong Surashri Pujari Michelle Zhang Savona Ferguson Michelle McKenzie Nicolle Hewat Helena Spicer Betty Curtis Sandra Estephan Nicole Storm Rebecca Holley Alexandra Dale Tracy Do Sophie Liu Emma Hill Kayla Lopez Iiona Ter-Stepanova Allison Parry Emma Hill Heather Pfitzner Kerrie Adams

December 2014 • CREDIT 2015 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Can We Help? AICM receives questions from Credit Managers that it puts to a panel of lawyers, insolvency experts and credit professionals 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. All articles contain general information only. They are not legal advice. You should seek your own legal advice if faced with a similar situation.

Trade references Question My company provides goods and services to other businesses ie all of my customers, be they a sole trader, partnership or company have provided me with their ABN and my goods are generally for business purposes. On which of my customers may I provide a commercial trade reference and to whom? What are my obligations if I provide a commercial trade reference to another supplier of a customer ie: zz must I keep a copy of the reference, and if so for how long? zz must I divulge to the customer the fact I have provided a trade reference? zz must I produce a copy of the reference if so demanded by

information is being collected, what you will do with it, who you will disclose it to – and how you will keep it secure. A business

the customer?

can generally collect, use and disclose personal information

What are the obligations on the requesting party ie:

when reasonably necessary for its business activities. You

zz must he keep a copy of the reference?

should have a publicly available privacy policy that make your

zz with whom may he share the information eg internally,

personal information handling practices clear.

externally? zz must he produce a copy of the reference if so demanded by the customer?

If the Privacy Act applies, a person has the right to ask you for access to personal information you hold about them (which could be personal information contained in a trade reference). Exceptions may apply to granting access as requested. Under the Privacy Act you must destroy personal information

Answer:

when you know longer need it for your business activities. In

Businesses that provide commercial trade references to other

other words, if you no longer need it for any of the reasons you

businesses may have obligations under the Privacy Act (Cth)

collected it, you should destroy it. However there may be other

1988. Unless a business is not required to comply with the

laws (such as tax laws) that require you to keep it for longer.

Privacy Act (because it falls within a specific exemption) the

Care should be taken to ensure that the exchange of trade

13 Australian Privacy Principles (APPs) of the Privacy Act will

references doesn’t involve exchanging any information about

apply to a business that collects, holds, uses and discloses

a person that is about their history or activities in relation

personal information. That is, any information about a

to consumer credit – unless you have fully considered the

reasonably identifiable individual.

implications under the Privacy Act. For example, if a business

Even when dealing with a company, obligations under the

provides trade terms to a company, it may want to get

Privacy Act should be considered. This is because a company

consumer credit reports about the directors as part of its credit

cannot actually do anything – it needs individuals to carry out its

assessment. If so, then that business must also comply with the

business activities and operations. So even business to business

credit reporting provisions of the Privacy Act (Part IIIA) that

exchanges will involve dealing with people – and if you collect,

apply to getting the reports and handling of any information in

hold, use or disclose information about those people (such as

them.

business cards from a company’s sales representatives), the

The Privacy Act requirements are complex and you should

Privacy Act may apply. However if you have or give a trade

seek professional advice about how the they apply to your

reference that only contains information about a company, then

business. This article is for general information purposes only

Privacy Act obligations will not apply to that reference.

and should not relied upon in any way as advice.

As a general principle the APPs do not prevent businesses

Debra Kruse

from doing this with personal information – they do require

Principal Consultant

transparency, so that the people know why their personal

dkruse@inflexionpoint.com.au

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

New South Wales

Creditor Watch Team.

Peter Mills, Maureen Grant, Greg Young and John Shanahan.

Bing Team.

AROUND THE STATES

Turks Legal Team.

ARMA Recoveries and CreditorWatch AICM National Golf Day wrap up On Tuesday the 13th of October the AICM held the combined NSW and National Conference Golf Day at Oatlands Golf Club who again put on a great show despite some rain. This was the first official activity of the AICM National Conference and the day was very successful. We had over 100 players across 26 teams and the competition was fierce with the BBW Lawyers Team taking out the major prize just ahead of the Veda A Team led by Gary Forest who finished a close 2nd. Team Debt Sale Brokers Australia (DSBA) finished 3rd which still puzzles me as team captain Adam Dayeian (Owner and CEO DSBA) much prefers to kick a soccer ball rather than swing a golf club. BBW scored a course record that was highlighted by an eagle at the 12th (Par 5) after they chipped in from 110 metre’s out (the shouts could be heard all around the course). We accepted their score only after requesting sworn affidavits from each of them. Team Byron Thomas took out the coveted NAGA prize for the highest aggregate score and I’m not sure Team Captain Peter Morgan (Owner Byron Thomas) will be taking up golf any time soon. A massive thanks to all 22 sponsors on the day. The main reason why the day was such a success was due to the large number of sponsors who used the event as an opportunity to bring along their

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

New South Wales

Putting competition.

Patrick Goghlan and Nick Pilavidis.

Mark Logue and Treacy Sheehan.

Happy golfers.

Putting competition.

WINC High Tea.

customers and staff for a great day of networking and fun. It’s rare that you get an opportunity to spend 5-6 hours with a customer discussing life and business. We also wanted to take this opportunity to thank our NSW President, Colin Magee, who spent countless hours organising the golf day and wasn’t able to attend due to the sudden loss of his father. Col, we all toasted you and your father after the game. I’m sure he would be very proud of your achievements over the past 12 months where you lead the NSW AICM Council to victory with the President’s Trophy at the National Conference. It’s certainly no coincidence that this award was won by NSW in your first 12 months as the NSW President. A big thank you to all the other volunteers who gave up their time to make the event a success, you know who you are and you are loved. 36

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

WINC High Tea On the 25th September we hosted the second NSW WINC event. The event was a delicious High Tea held at the beautiful Deloitte Building in the Sydney CBD. Nicole Wales, from Human Tribe (formerly Emerald City Consulting) was our wonderful guest speaker. What a lady. Nicole is the Founder and Managing Director of Human Tribe, a Human Performance Specialist Company that partner with people and business to reach their highest potential and purpose through coaching, measuring, aligning and inspiring. Nicole took us on a journey looking at the successes and challenges faced in her career which included operating three Fernwood fitness centres, employing over 100 people at any one time. She also worked in Human Resources and Learning and Development for over 12-years across

New South Wales AROUND THE STATES

Amanda Borland, Treacy Sheehan, Beth Gray, Beverley Brock and Susan Day.

WINC guests.

Nick Pilavidis, Beth Gray and Beverley Brock.

WINC guests.

Beth Gray and Nicole Wales.

the hospitality, retail, banking and television industries in both a senior management and executive level. She is well versed in managing how to achieve a good work/life balance and also how to be a more effective leader. Some of the take away points of the discussion were the importance of making time for yourself, prioritising tasks and relationships, and the need to ask for, as well as accept, help from others. The relaxed casual atmosphere allowed Nicole to open up and share personal values and insights to the group who in turn responded with questions of relevance. It was thought provoking and engaging. Beth Gray (WINC NSW Committee) delighted us with her wit and MC’ing and we think we’ve found a new career for her as a Bingo caller (legs eleven). Our WINC days also support the Dress for Success (DFS) organisation. We heard from Beverley Brock MD, about the great work Dress for

Success does to promote the economic independence of disadvantaged women by providing professional attire, a network of support and the career development tools to help women thrive in work and in life. With the support of sponsors and Beth’s fabulous commentary the raffle raised over $1,300 at the event. www.dressforsuccess.org. Thank you to the generous supporters of the lucky door prize (Australian Recoveries and Collections Pty Ltd), and raffle prizes (Fresh Catering, Trace Personnel, Hoyts Cinema, Simon Johnson, SAP User Group, Pacific Magazine and Simpson Cottage). Thank you for supporting the launch of the WINC events this year and we look forward to seeing you all at the 2016 AICM events especially all of the WINC days. If you’d like to share more ideas on events you’d like to have please let us know and email: Amanda@aicm.com.au.

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

New South Wales Getting to know Adam Clarke National Credit Manager, StarTrack, MICM & NSW Council Member How did you get involved in the Credit Industry and in what capacity have you been a credit professional? I started in Credit at a company named Discount Freight Express (DFE) at the ripe old age of 19 after completing Certificate IV in Accounting at Baulkham Hills TAFE. I have been working in Credit coming on 16 years. My first role was a Credit Clerk which later progressed to Credit Officer, Assistant Credit Manager, Regional Credit Manager and now National Credit Manager. How long have you been involved with the AICM, on Council and other? I have been involved with the AICM for 4 years and have been newly appointed on the Council. Why did you get involved on Council? To give back and add value to the AICM and the Credit Industry that has been so good to me. I believe you should always give back and pay it forward as my mentors and predecessors have done for me. Giving back is the ultimate reward. What part of the world do you come from? Probably another planet other than Earth – LOL, just joking! I was born in Sydney and have Irish and French background from my mother’s side and Hungarian and German from my father’s side. I like to mention the French part to substantiate why I am such a good lover What is your favourite movie quote? Oh it has to be “Get to the chopper” by Arnie Schwarzenegger from the movie Predator. Another great one is “You can’t handle the truth” by Jack Nicholson from the movie A Few Good Men. What sport/team do you barrack for? My favourite sport is Basketball and I am a HUGE NBA fan. I don’t necessarily follow a team essentially (originally it was Chicago Bulls and more recently the Miami Heat), I tend to follow players so if they switch teams so do I. The GOAT (greatest player of all time) is the one and only Michael Jordan. He is 6 from 6 in finals and crushed many dreams of Hall of Fame players by stopping them from ever winning the championship. My other sport is Rugby League and I follow the Parramatta Eels. That stems back in my family all the way to when they started in the comp in 1947. The 80’s were legendary but I was only a little boy and don’t remember how good they were. My mum tells me about it all the time! 38

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

I can’t believe they lost in 2001, that was their year to win it and 2009 was a miracle run with Haynesy who I believe is the best player to ever pull on the boots that could have won Parra a premiership had he stuck around. Now he is following his dream in the NFL and I will follow him all the way! Everyone who knows me knows just how much I love Jarryd – he is my favourite league player of all time. What would you say has been your biggest success in your career? That’s a tough question. I think overall success is measured by how well your team performs and what they represent. I can honestly say that my guys are all better individuals and a better team today than they were in the past and that to me is what success is all about. It’s not about me – it’s about them and us and progression. The coach (me) is the orchestrator; the players play the game and they execute the game plan. It is a collective effort and nothing makes me more proud and honoured then to stand beside them. Without your people we (Managers/Coaches) are non-existent. If it is personal success it would have to be winning back to back NSW Credit Manager of the Year in 20013 & 2014 sponsored by the AICM. Personal accolades are hard to come by in Credit – nobody generally likes what we do (except for the CFO of our own business when we pull great numbers). It was a great honour to be awarded 2 years in a row. I am sure there won’t be a third.

Anna Golubeva Credit Manager, Hilti (Aust.) Pty Ltd, MICM & NSW Council Member How did you get involved in the Credit Industry and in what capacity have you been a credit professional? I will be celebrating my 7 years anniversary this year: 1st of December 2008 is the date when I started as an Assistant in the Credit Department of Hilti Russia. I was developed within the company into the Team Leader position, and in 2013 moved from Moscow to Sydney looking for international career opportunities. Currently being a Credit Manager in Hilti (Aust.) Pty Ltd, I am in charge of 7 credit professionals, one of the best teams I worked with. How long have you been involved with the AICM, on Council and other? I have been an AICM member for the last 2 years; on council – since July 2015. Why did you get involved on Council? I am passionate about the Credit industry. I have been within the industry for so long that sometimes I feel I know it inside out. What is more amazing, I am continuously

New South Wales

What part of the world do you come from? The country with the cold winters where the bears hang around the streets and everyone’s favourite drink is vodka. Do not always believe to what you hear though. I was born in Moscow, Russia. What is your favourite movie quote? “You mustn’t be afraid to dream a little bigger, darling”, Inception (2010). What would you say has been your biggest success in your career? Being acknowledged as the National Winner for the Young Credit Professional of the Year Award 2014 is definitely one of the biggest achievements in my career. I could not expect the better recognition than this one after being in Australia for just one year. I would like to take an opportunity and once again thank my team for the fantastic support.

Kimberley Hale Currently I am the Debt Solutions Manager for Baycorp. I have been in debt recovery for the past 8 years, and have worked for Credit Corp, Collection House, D&B and NCML. I became involved with the AICM council through my nomination in the New South Wales YCP award for 2015. Through this experience and the events I’ve attended I have met many amazing people with similar interest and drive within the Credit industry. They have openly encouraged me as a new-comer and have unveiled new paths on how to improve my career while building great new friendships. For me it’s been a fabulous experience which I look forward to showing others. In my free time I enjoy many different sporting activities which helps level my mind after a busy working week. I currently support the Australian Diamonds in the Netball, and the Parramatta Eels in the football. I’m fiercely competitive and always love some friendly competition within all aspects of my life. This keeps me motivated! My biggest success in business came this year when I was nominated for the YCP Award and won the NSW title. Interestingly enough, what I have taken most out of the experience with the AICM is introduction to its people and understanding the love they have for our industry.

AROUND THE STATES

learning: developing my team, introducing new technologies, working on credit projects – it keeps me being enthusiastic and encourages me to share my knowledge, energy and experience with the people around me. I believe being an AICM council I have more opportunities to do that through networking. Only together we can build a better future for the Credit industry in Australia.

Events Calendar

29 January

Dealing With Customers – 1 Day Program

This one day course covers two core areas of the Customer Relationship and two units of the Certificate IV in Credit Management, the Customer contact and Complaints process. VENUE: GRACE HOTEL, 77 YORK STREET, SYDNEY

18-19 February

Factoring and Invoice Discounting – 2 Day Program There has been substantial growth in the use of factoring and/or invoice discounting arrangements. This course is relevant to those people who provide a factoring and/or invoice discounting arrangement as well as those people who utilise such an arrangement. VENUE: LEVEL 3/SUITE 303, 1-9 CHANDOS STREET, ST LEONARDS

The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners

Divisional Partners

Professional Partner

Official Division Supporting Sponsors

Our National, Divisional and Professional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

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Queensland

Greg Young CCE at the Annual Conference.

Dale Hannan MICM, Scott Goodrick MICM and John Gregg MICM.

Greg Young CCE, Christine Bracey, John Shanahan and Natalie Denschel at the Annual Conference.

President’s Report Melinda Grob MICM and Ruthven Underhill CCE at the Annual Conference.

Our team of Qld councillors has achieved fantastic engagement and drive in the last quarter, not least of all highlighted by the “Women in Credit (WINC) luncheon, which I will talk a little bit about. AICM is “owned” by all of its members and will continue to be an organisation creating opportunities for all members to engage and participate in the future shape of their industry. Firstly, thank you to our Partners, Veda, Dun & Bradstreet, Austral Mercantile, Vincent’s, Results Legal and Randstad for the fantastic support this year. As always we could not have held our events without their assistance. Please ensure that you show your support to our Partners wherever possible. The September WINC Luncheon – well what superlatives cannot be said? Whilst I was not able to attend (due to my flying out the next day on family holidays) the pictures and figures speak for themselves. Julie McNamara (Patane Lawyers) and her committee are proving again what absolute stars they are. Planning for next year’s WINC luncheon is underway

Michael McDowell MICM and Zara Mends at the Annual Conference. 40

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

already, so if you want to attend, or be involved in any way, please contact Julie.

Queensland

WINC Guests.

Queensland WINC Guests.

WINC Guests.

In October we saw our most excellent state winner Michael

AROUND THE STATES

Qld WINC Panel: Gemma Twemlow, Julie George, John McNamara and Sonia McDonald.

specific events which they would like to assist with or see held,

McDowell (NCI Qld) vie with other state winner’s for the coveted

they should not hesitate to contact Julie McNamara (Patane

AICM YCP of the Year award at the AICM National Conference

Lawyers).

in Sydney. Michael did his company and Qld proud with his very

The co-operation and discussions with other states’

professional presentation and preparation. His courtesy and

councillors continues. Not least of these are Col Magee and his

interaction with all members before and after the judging is a

team in NSW. The collegiate atmosphere of the AICM National

shining example of the bright future which he and other YCP’s

Conference continues to foster discussion beneficial to all

bring to AICM.

members in all States.

Special thanks must also go to our YCP Councillor Maria

Thank you all again for your support to the Queensland

Schandl for her coaching and assisting Michael before and

council. We wish all our members and the other states, our

during the judging process. Unfortunately, 2015 was not to

State and National Partners, and all of our supporters a Merry

be Michael’s year, however he has assured us that he will be

and safe festive season. – Peter Mills MICM

lining up again when possible for another crack. Well done

President

Michael. Our end of year function this year was held at Custom House on Wednesday, 25 November. Members were entertained by a panel topic of “Who did you say makes the

Qld WINC Luncheon

better Credit Manager?”, as well as prizes and raffles.

What an amazing event our first WINC was for Brisbane on

On a serious note, council will shortly be nutting out some

18 September this year. A huge thankyou to our sponsors NCI

key dates for 2016, hoping to add some (fun-ner) events

and Results Legal. Also our prize donators and supporters in

which businesses might wish to sponsor. If members have

the audience! It would not have been as successful without

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

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Qld WINC Guests at WINC Customs House.

your contribution and attendance. Our venue was the beautiful Customs House on the Brisbane River which was the perfect venue for such a prestigious event and sure to be a first choice in years to come. We had an audience of more than 100 people of all walks of life, both men and women most of whom were somehow connected to the wonderful world of women in credit. The day would not have been such a success without our amazing speakers Julie George, Sonia McDonald, Gemma Twemlow and John McNamara giving us their time and sharing their experiences and of course our amazing facilitator Treacy Sheehan MICM who flew up to Brisbane from Sydney to lead the questions to the panel. Also our wonderful WINC Committee Treacy Sheehan MICM, Anna Taylor MICM, Zara Mends, Amanda Borland, Maria Schandl MICM and yours truly for the planning and organising of our amazing luncheon. A thank you should also go out to our employers for their support during the process. Together we raised over $4,000 toward our chosen charities of the day, Suited for Success – Dress for Success and Women’s Legal Service. What a fantastic effort and outcome of a most enjoyable afternoon of good food, wine and networking. We can’t wait to do it again in September 2016! Date to be advised soon, watch this space! – Julie McNamara MICM

Introducing our Councillors CARLA SEIRLIS CCE – Qld Councillor Carla has over 30 years’ experience within the credit function across a wide variety of industries and currently holds the role of Credit supervisor for Berwicks (Gold Coast) Pty Ltd t/as BBC Digital. Her passions away from credit include her family, camping, fishing and hunting. Carla is one of our newest members 42

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

Qld WINC Leith Mitchell and Katrina Christ.

on council, having been previously involved Carla is a great addition to the team.

MARIA SCHANDL MICM – Qld Councillor, YCP/YNN Maria is another new member to council, bringing her experience as a previous YCP Winner and being involved in the credit industry for over 15 years. Maria is currently the National Credit Manager of Stoddart Group and holds a Diploma in Financial Services that was attained through the AICM. Maria’s passions include keeping fit and she has been involved in completing obstacle races this year.

MICHAEL MCDOWELL MICM - Qld YCP “Recently I went through the Australian Institute of Credit Management, Young Credit Professional Program. The program started off with a presentation in front of a panel in Queensland and ended with another presentation down in Sydney. I managed to win the Queensland Award and whilst didn’t win nationally, I was announced as a finalist down in Sydney at the Annual Conference.

Events Calendar

Queensland AROUND THE STATES

5 February

Welcome to 2016, AICM & YCP Bowling & Social Night VENUE: STRIKE BOWLING WINTERGARDEN

10 Feburary

Economic Forecast 2016 – What is in store VENUE: CUSTOMS HOUSE

9 March

Developments in Trade – Credit Law VENUE: TBA

11-14 March

Online CCE Exam 13 April

Engaging & Retaining Credit Professionals Do you know the what, when, why and how VENUE: RANDSTAD

20 April

Tool Box 1 – Half Day, Assessing Credit Apps VENUE: RANDSTAD

Qld WINC Julie and Gemma WINC.

11 May

“The whole program had a number of challenges including creating a presentation in front of a panel of experts on the ‘credit industry’. “I would recommend this program for any young credit professional looking to grow both personally and professionally. I am more than happy to discuss the process further with anyone that is interested.” – Michael McDowell MICM

Compliance & Security VENUE: TBA

13 May

Tool Box 2 – Half day, Collect with confidence VENUE: RANDSTAD

8 June

Q&A – Time Management Emails/Collection Activity, Staff Management VENUE: TBA

The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners

13 July

PD Breakfast – Insolvency VENUE: VINCENTS

27 July

AICM Annual General Meeting VENUE: TBA

27 July

YCP Awards Dinner VENUE: TBA

Divisional Partners August

Magistrates Court Visit & Procedure VENUE: TBA

8 August

Tool Box 3 – Half Day VENUE: TBA Our National and Divisional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.

9 September

Women in Credit Lunch VENUE: TBA

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

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South Australia

Credit Management Fundamentals.

James Devonish MICM CCE and Trevor Goodwin CCE – Credit Management Fundamentals.

Neil Fennell MICM – Credit Management Fundamentals.

Nick Pontikinas, Rebecca Edmiston MICM and Paul Westo MICM – Credit Management Fundamentals.

Vice-President’s Report 2015 has been a busy and challenging year for the SA Council, with added responsibilities for each portfolio throughout the year. I am pleased to say that the Councillors rose to the challenge, ably led by our state President Gail Crowder, who also put in a lot of hard work herself and led by example! At the time of writing Gail is enjoying a welldeserved holiday. The year started off with an excellent and well attended Credit Symposium at Hahndorf in the lovely Adelaide Hills. The subsequent monthly credit focus sessions held a number of interesting topics, including a liquidation case study, trading trusts, credit risk assessments and a mock trial at the Adelaide Magistrates’ Court. Our last professional development event of the year, held on 20 November 2015, finished in style at the state-of-theart conference room at the Bendigo & Adelaide Bank, where a half day seminar was held on credit management fundamentals. 44

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

The social network nights were also very enjoyable and gave great networking opportunities. They included our annual awards night, a quiz night and credit professional networking drinks. The awards night in August was a highlight of the year with approximately 100 people in attendance to see our biggest ever contingent of State YCP applicants and finalists. The biggest highlight was seeing our own State YCP Winner, Tate O’Connor from NCML, win the national YCP award at the National Conference in Sydney. We are also pleased to welcome Tate onto the State Council. On behalf of Gail and I, we thank all state councillors for the efforts they made this year on Council. 2016 is an exciting year ahead for us, as we look to revamp and freshen up the events and training sessions we offer our members (and all of those involved in credit management) in South Australia. We wish all members an enjoyable and safe festive season. – James Devonish MICM CCE Vice President SA Division

South Australia AROUND THE STATES

James Neate MICM, SA Director, Tate O’Connor MICM 2015 YCPA, Gail Crowder MICM (SA President), Rebecca Edmiston (2014 YCPA).

James Neate MICM at the Conference.

James Devonish MICM CCE.

Josh Richards.

Professional Development Half-Day Seminar – 20 November 2015

Neil Fennell shed light on what can often be a complicated process of analysing financial statements, setting out various vertical and horizontal ratios to measure the financial performance of a company and also what to consider outside of the financial statements when considering a company’s creditworthiness generally. James Devonish presented three hypothetical credit scenarios (helpfully prepared by Eric Milne of Fujitsu General Australia) which involved a lot of audience participation and also takeaway lessons and discussion points. Lastly, Nick Pontikinas, Rebecca Edmiston and Paul Toro all provided tips for excelling in a credit role and in developing a career in credit. Some of the tips included: knowing your business and customers very well, ensuring all communications with management was meaningful and proactive; and looking for those opportunities as a credit manager to provide good news stories and to not be afraid to own and promote your successes with management (because no-one else will do it for you!). All in all it was an entertaining and informative half-day seminar and we thank all the guest speakers for their time and contribution. We also thank Bendigo and Adelaide Bank for allowing us to use their conference room and facilities.

The SA Division held its second professional development seminar for 2015 in an exciting, state-of-the-art conference room at the new Bendigo & Adelaide Bank building in the Adelaide CBD. The seminar was a half-day seminar and was on credit management fundamentals. The topics were Tools for Credit Risk Analysis, presented by Trevor Goodwin of NCI Credit Insurance (Brokers) Pty Ltd, Reading and Understanding Company Financials by Neil Fennell of Worrells Solvency and Forensic Accountants, Credit Hypotheticals by James Devonish of Lynch Meyer Lawyers and Career Development in Credit by Nick Pontikinas of Boart Longyear, Rebecca Edmiston of Bendigo & Adelaide Bank and Paul Westo from Toro Australia Pty Ltd. Trevor demonstrated his wealth of knowledge in credit risk analysis with a comprehensive and detailed presentation. He emphasised the importance of the five “w”s and five “c”s of credit, the various public and private sources to access information and intelligence about debtors, as well as a useful discussion about the early warning signs of a customer in trouble.

– PD Committee, SA Council December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

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South Australia

Gail Crowder and Sean Brady at the President’s Dinner.

Anna Golubeva and Rebecca Edmiston.

Jane Calleja and Anne Wilkins.

SA Credit Focus.

October Credit Focus: Stand Out – how to get the attention you deserve Presented by Jane Calleja, Learning & Development Manager from National Credit Insurance (Brokers) Pty Ltd who covered all the challenges we face in our day-to-day roles in Credit. Even though we were only small in numbers, we certainly made up for it with involvement and role-playing throughout Jane’s presentation. Topics discussed were challenge our perceptions of ourselves and others, explore behaviours to help stand out and be noticed and sharing tips on creating and sustaining change in our life. Many more ideas and thoughts were touched on throughout the morning session. Jane certainly gave us lots of valuable ideas like don’t make assumptions, dress the part, feel the part, be sociable, help others to succeed, accept responsibility, get involved, stay away from office politics, be change ready, continue to learn and build a reputation for reliability and challenge. Quote of the day was – “Get Curious Not Furious” There were some great ideas discussed and everyone seemed to go away with thoughts on what changes we need to make it happen. Here is just one example of the feedback we received. “I certainly came out with a different way of thinking, it was very informative and I will definitely be putting these ideas into action.” – Anne Wilkins FICM CCE, Credit Focus Portfolio 46

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners

Divisional Partners

Our National and Divisional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.

Victoria/Tasmania AROUND THE STATES

Charles Tims CCE – National Credit Manager, Tuftmaster, Kate Baker MICM and Bianca Ronbinson, Urbis Pty Ltd. Maureen Grant CCE – NCM, Lindt and Sprungli, Beth Gray CCE – NCM, Red Bull Australia and Rosina Edgar MICM – NCM, Mercedes Benz.

Runners Up: Team Reece, Credit Team of the Year 2014.

Winners: Team Transurban.

YCP Function – Trivia Night Held at the Melbourne Central Lion Hotel on 17 September, what a fabulous turnout! 68 members and guests attended the YCP Trivia Night organized by Neil Smith from Transurban and the Functions Chair on the Vic/Tas Committee. There were 8 teams of very enthusiastic quiz aficionados with 3 teams from Reece Plumbing; a great attendance from the team at Reece. The evening commenced with a bit of social chit chat over a drink but all gloves were off when the quiz was underway. Consisting mainly of music trivia a fun night was had by all. The team from Transurban lead by Arthur Tchetchenian, took out the title for this event, the team included Rob, Seema, Meg, Rob, Steve and Marina, with a team from Reece coming in a close second. When the points were tallied at the end only 1 point separated 1st and 2nd. Quite a few participants kicked on after the conclusion of the Trivia Night, which mainly consisted of members from Transurban who felt obliged to celebrate their win. A very popular and enjoyable night, we’ll definitely be running this event in 2016. Much thanks to Neil for organising the event.

See You in Court – Touring the Old Melbourne Gaol.

Court Process and Court Proceedings A tour of the Old Melbourne Gaol was only part of the excellent learning experience at this half day seminar on October 29. An informative but fun look at the Court Process, being cross examined and giving evidence in a trial environment. Tracy Rothwell from Rothwell Lawyers played Judge Judy and joined by Barristers Lionel Wirth and Andrea Mapp and QC Peter Cawthorne, gave an overview of the

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

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Victoria/Tasmania

Amanda Rothwell – Prisoner 12346.

Frank Fisher of Australia Post donns the Magistrates Garb.

QC Peter Cawthorne instructs participants with Barristers Andrea Mapp and Lionel Wirth and Catrina Galanti MICM of Austral Mercantile in the Witness Box.

Members and Guests at the Old Melbourne Court House.

process and allowed participants to get firsthand experience of what it is like to be cross examined in the witness box. There were dress ups and mug shots as Frank Fisher from Australia Post donned the Magistrates garb; all part of the fun and frivolity, however the participants’ attention was soon turned to the court room experience and for all who attended it was invaluable. Members, if you get a chance to attend this half day seminar next time around we highly recommend it, because you never know when your contact with a customer will require you to give evidence in court. Being familiar and comfortable with the process can help you to be calm during a hearing and therefore help you appear more credible as a witness when the time comes. A big thank you to Tracy, Peter, Lionel and Andrea for their time, preparation and participation. We greatly appreciate you delivering this wonderful seminar for the benefit of our members. 48

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

Women in Credit Business Luncheon – 20th November 109 credit professionals and their guests attended the Vic/Tas Division’s inaugural Women in Credit (“WINC”) Business Luncheon, held at the Waterfront Room at Waterfront Venues, Docklands. Mostly women in attendance, however there were quite a few men, and we thank you for your interest and involvement in the day. The venue was lovely, the décor was lovely, the food delicious and the service excellent. The day’s proceedings commenced with a superb introduction by our MC’s and major sponsors for the day; Zara Mends from NCI and Anna Taylor from Results Legal, who are both ardent in their support of the WINC credo. They understand the issues that women in professional roles face and the contribution and standing of women within the credit industry as a whole.

Victoria/Tasmania AROUND THE STATES

Anna Taylor of Results Legal and Zara Mends of NCI – MCs for the Afternoon.

Carole McTavish of IXOM.

Members and guests listen intently.

Members and guests with Prue Leggoe of Dress for Success.

Both Zara and Anna spoke passionately about their own experiences and their patronage of the WINC functions. All funds raised from the event went to Dress for Success Mornington Peninsula (“DFSMP”), a charity that assists unemployed, low-income women on and around the Mornington Peninsula who are seeking to return to work and who need to rebuild their self confidence and self-esteem after experiencing long-term unemployment, health, social, educational or other difficulties. Over the last 6 years DFSMP have provided a free dressing and support service to over 3,000 women helping to build their job-readiness and interview skills and enabling them to dress appropriately in stylish professional outfits that they are able to keep. Prue Leggoe from DFSMP played a compelling video of several women whose lives have been completely turned around due to the assistance they were provided by DFS, and spoke fervently of the great importance of the work that they do and thanked all attendees for their attendance and support.

Traceay Sheehan MICM from Trace Personnel then chaired an ‘On the Couch” discussion with Linda Murray Executive Coach from Athea Coaching, Carole McTavish, Shared Service Manager from IXOM and Jan Reeves Collections Expert and Entrepreneur. The ladies shared their vast and varied experience in business, collections and life in general. They also provided insights into the power of goal setting and planning, or in Carole’s case just focusing on the things that you want, which is actually keeping the goal in sight. All three agreed on many points like keeping focused on the positive things in your life and career and the things that you want, rather than focusing on negatives. Linda Murray made an interesting point about gender bias and the fact that we, as women, need to be mindful of our own bias. Linda went on to say that it is our responsibility to be mindful and careful that we don’t inadvertently perpetuate and promote the exact biases that we are trying

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

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Victoria/Tasmania

Our Esteemed Panel: Linda Murray – Athena Coaching, Carole McTavish – IXOM, Jan Reeves MICM – Get Paid for the Work you Do. Treacy Sheehan MICM of Trace Personnel – Chair of the Esteemed Panel.

to stamp out by engaging in behaviour that supports those biases. The major concepts that came out of the afternoon were that women can do anything that we put our minds to, that we are responsible for our own success and having the courage to ask for what we want, and it is our responsibility to voice any disparities we observe and to promote ourselves. We have received excellent feedback from members and guests and this will be another event that will feature on our annual program. A special thanks to our major sponsors for the event; Results Legal and NCI, and for the other companies who supported with raffle prizes and items for the Goodie Bags; National Collection Services, Australia Receivables Limited, Room to Improve, Austral Mercantile, Cor Cordis, Baxters Food, NCML, Trace Personnel, Fitness First, Blue Mane Consulting, CGU Insurance, Recoveries National, Credit Solutions, Home Direct, Bek’s Blooms, Reliance Recoveries, Blue Mane Consulting, Jan Reeves, Veda, Austral Mercantile, NCML, White Cleland Lawyers & Consultants, Baxters Foods, Collins & Co Accountants, Sharp & Carter Recruitment, Sclazo Foods, ARL Receivables, Stephanie Kate Hair Design, All Office Business Solutions, REA Group, Bronwyn Bennet (Creating Healthy Spaces), without who’s support we could never hold events such as these. Our gratitude cannot be measured in words, but thank you for your outstanding contribution to this event. Lastly I want to thank the committee for their efforts in putting this event together; Alison Said (National ManagerCredit, GCU Insurance), Donna Smith (Managing Director, Reliance Recoveries), Treacy Sheehan (Managing Director, Trace Personnel), Robyn Erskine (Brooke Bird), Sherif Hussein (Credit Manager, REA Group), Lou Caldararo (National Credit Manager, Spicers), and Jeff Hurst (Credit Manager, Scalzo Food Industries), Nick Pilavidis (CEO AICM) and Amanda Borland (AICM). A great deal of work goes into organizing these events, so thank you all for your tireless work and contribution. 50

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

Inspirational Quote: “Be the Change You Want to See in the World” – Mahatma Gandhi

UPCOMING EVENTS Save the dates and mark your calendars 15th December – CCE Breakfast

The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners

Divisional Partners

Professional Partners

Western Australia/NT

High Tea.

High Tea: Simone Haskins, Lisa Marr MICM and Yvonne Liew.

President’s Report Just seemed like the other day I was walking down the street without a care in the world. But I find it’s December, it’s the end of the year, and I have survived 6 months of the adventure as WA President. Still asking many questions of the team at head office as well as my mentors here in WA. I have to remind myself that opportunities of this nature do not come along all that often…. Over the course of 2015, we have been able to gift our WA members with some very informative and relevant workshops. Perhaps socially quieter this year, our Sponsors Lunch and the High Tea were welcomed with much anticipation. Our traditional Christmas on the Bay will bring things to a close and allow us to spend time with our credit family members. Looking forward to 2016, we hope to educate, innovate and invigorate our WA Members to putting their best credit foot forward. Take care over the festive season, relax and enjoy time with family and friends. We can’t wait to see you all next year.

High Tea I was fortunate enough to attend the WA AICM Social Soiree High Tea at Pagoda Resort in September. With a new president, Lisa Marr, stepping up to the plate I was looking forward to hearing what was in store for the WA AICM and what we can look forward to in the next year. There was a great cross section of the credit community in attendance with representation from sponsors, credit professionals and current members of the institute. December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

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High Tea: Val Baynes MICM, Natalie Lunt and Donna Trezise.

AROUND THE STATES

Western Australia/Northern Territory Conversation was lively and the occasion provided a solid

had previously only focused on unsecured lending (watch this

networking opportunity for many in attendance. It was

space).

very encouraging hearing from other Women in the credit profession, sharing their experiences and current challenges

The process and Conference

in the industry and the current market. The location was

The process was tough but thoroughly enjoyable, it made me

fantastic and the catering was impressive. I do hope that

think long and hard about me, my views on the industry and

the high tea is a permanent fixture on the WA AICM social

also look back at our successes and failures over the past few

calendar for years to come.

years.

– Natalie Lunt MICM National Credit Manager, Coventry Group Ltd

I was truly honored to have been chosen as the winner of the Western Australian division and was greatly looking forward to competing on the national stage. The national conference was incredibly well organised, the

David Brennan

professionalism of the organisers, speakers and exhibitors

2015 YCPA

showed that the AICM will continue to be the preeminent credit

I was fortunate enough to represent Western Australia at the

association in years to come.

2015 Young Credit Professional of the year awards during the AICM National Conference held in Sydney during October. Prior to this process I had no knowledge of the AICM, being

The hospitality shown to myself and the other state finalists was world class and truly memorable. Unfortunately I wasn’t able to come home with the silver

from the financial technology sector we have previously not

wear but learnt more about myself and our business during

engaged with traditional groups or associations focused on

the process than I have before. A fantastic way to look back,

credit and credit management. That will certainly change after

something that is sometimes difficult in our ever-evolving

being involved for just a short period of time.

business lives.

The people I have met have inspired me to not only go forth

Any young credit professionals that are thinking about

in my quest for lending automation but also tweak some of our

involving themselves in the AICM or the YCP should jump right

technology to incorporate trade credit underwriting where we

in, it’s an amazing experience and one that you will remember forever.

The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners

Divisional Partners

CREDIT MANAGEMENT IN AUSTRALIA • December 2015

New Members The Institute welcomes the following credit professionals who were recently admitted to membership in September and October 2015.

QUEENSLAND

VICTORIA/TASMANIA

Jordan Bennie

Mcinnes Wilson Lawyers

Rikki-Lee Ellis

Reece Pty Ltd

Linda Cougle

Cashflow Finance Australia Pty Ltd

Bianca Haver

Reece Goup

Alison Lawrence

Cashflow Finance Australia Pty Ltd

Liam Jenkins

Adidas Australia Pty Ltd

Kristy Lazarus

Cashflow Finance Australia Pty Ltd

Robert Lyons

Reece Pty Ltd

Benjamin McPhail

Cashflow Finance Australia Pty Ltd

Lynne Moynihan

Ridley Agriproducts Pty Ltd

Nick Stark

Summer Collection Group

Candice Noom

Reece Pty Ltd

Shannon Stelfox

Earlypay

Michael Nugent

The ICM Partnership Pty Ltd

Selina Stephen

Cashflow Finance Australia Pty Ltd

Benita Payten

Reece Goup

Peter Toohey

Cashflow Finance Australia Pty Ltd

Roxanne Robinson

Reece Plumbing Pty Ltd

Peta Vaoiva

Cashflow Finance Australia Pty Ltd

Jenny Saveski

Onesteel Pty Ltd

Deborah Stark

Reece Goup

Mahlee Terrell

Foremans Business Services

NEW SOUTH WALES Ian Armstrong

Ruralco Holdings Limited

Scott Boyd

Veda

SOUTH AUSTRALIA

Stephanie Cornforth

Smith Leonard Fahey Lawyers

Shivaan Christensen

Credit Recovery Solutions

Dane Fazakerley

Veda

Kim Mansfield

The Polygon Group Pty Ltd

Kylie Gomersall

Harvey Norman Commercial Division

Brittney Waddington

Railroad Transport Pty Ltd

Mittu Gopalan

Freedman & Gopalan Solicitors

Steven Highfield

CML Group

Michael Leonard

Smith Leonard Fahey Lawyers

Felisima Manalo

Sanofi-Aventis Pty Ltd

WESTERN AUSTRALIA

Paul Mead

Veda

Julie Bartlett

COVS Parts Pty Ltd

Lewis Meegan

Veda

Dermot Horkan

Onesteel Trading Pty Ltd

Maria Messina

Instant Access

Warren Myers

CMP Recruitment Specialist

Natalie Monaghan

Harvey Norman Commercial Division

Heather Pattullo

Veda

Ian Renney

Brickworks Building Products Pty Ltd

Miral Sarvaiya

Austral Mercantile Collections Pty Ltd

Mohammed Sherkawi

Cabcharge Australia Limited

Heather Spring

Sanofi

Garry Trompp

Onesteel Trading Pty Ltd

Gina Villoria

Imperial Tobacco Australia Ltd

Ni Vo

Hilti (Aust) Pty Ltd

Paul Walker

Dux Manufacturing Limited

December 2015 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

NEW MEMBERS

See you at AICMâ&#x20AC;&#x2122;s

2016

NATIONAL Conference Venue:

Sea World 12 - 14 October 2016

Visit

aicm.com.au for details and earlybird registrations 2016 National Conference