Volume 22, No 4 May 2015
The Publication for Credit and Financial Professionals
IN AUSTRALIA
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Tips, updates and changes: Credit Management Insolvency Personal Property Security Check our website ... www.aicm.com.au
DIRECTORS Australian President – G.L. Morris MICM CCE
34 NSW Division: Nick Pilavidis with vote of thanks to Malcolm Poslinski.
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 1, 619 Pacific Highway, St Leonards NSW 2065 Tel: (02) 9906 4563, Fax: (02) 9906 5686 Email: nick@aicm.com.au EDITOR/PUBLISHER
36 QLD Division: Peter Mills, Pat Asange, Clive Rix and Julie McNamara.
Nick Pilavidis | Email: nick@aicm.com.au CONTRIBUTING EDITORS Colin Magee NSW Murray Ashford QLD Gail Crowder SA Warren Meyers WA Donna Smith VIC/TAS ADVERTISING MANAGER Tony Paul Association Media Tel: 0401 917 799 Email: tony@associationmedia.com.au
38 SA Division: Credit Symposium.
EDITING & PRODUCTION Anthea Vandertouw Ferncliff Productions Tel: 0408 290 440 Email: ferncliff1@bigpond.com THE EDITOR reserves the right to alter or omit any article or advertisement submitted and requires idemnity from the advertisers and contributors against damages or liabilities that may arise from material published. CREDIT MANAGEMENT IN AUSTRALIA is published by the Australian Institute of Credit Management, Level 1, 619 Pacific Highway, St Leonards NSW 2065. The views expressed in CREDIT MANAGEMENT IN AUSTRALIA are not necessarily those of Australian Institute of Credit Management, which does not expect or invite any person to act or rely on any statement, opinion or advice contained herein (whether in the form of an advertisement or editorial) and neither the Institute or any of its employees, agents or contributors shall be liable for any opinion contained herein. © The Australian Institute of Credit Management, 2015.
EDITORIAL CONTRIBUTIONS SHOULD BE SENT TO: The Editor, Level 1, 619 Pacific Highway St Leonards NSW 2065 or Email: nick@aicm.com.au CREDIT MANAGEMENT IN AUSTRALIA • May 2015
40 VIC/TAS Division: Hayley Mills, Colette Scully, Tania De Petra and Melva Tran.
44 WA Division
Volume 22, Number 4 – May 2015
4
Message From the President
Around the States
34 36 38 40 44 45
New South Wales
Human Resources
6
How to get buy in – The elevator pitch
Queensland South Australia Victoria/Tasmania
Credit Management
8
50 Shades of Red By Kirk Cheesman
10
Customer, Customer, Customer, Debtor By Lance Wickman
Western Australia/Northern Territory New Members
Promotions
13 46
Young Credit Professional of the Year
14
VEDA Quarterly Business Credit Demand Index
2015 AICM Annual Conference
By Moses Samaha
16
Riding the Currency Swings with Data By Darin Milner
Legal
18
Positive Outcomes From Insolvency By Joseph Scarcella
16 Darin Milner
22
20 Roger Mendelson
Peter Mills
20
Bankruptcy – The F1 18 of Debt Collection By Roger Mendelson
PPS
22
PPSA: “The Whittaker Review” – We’ve Only Just Begun
26 Adrian Hunter
By Peter Mills
26
Hire Industry Exposed to PPSA By Adrian Hunter
Practical Advice on What to do to Recover Goods
28
By Kim Powell
PPSR registration: Defects Can Be Costly
Nathan Deppeler
ASSOCIATION MEDIA For Advertising Opportunities
30
in Credit Management In Australia
AICM – Can We Help?
31
AICM Training news
Kim Powell
29
By Nathan Deppeler
PPSA Registration Costs
29
28
CALL Tony Paul Phone: 0401 917 799
8
10
14
Kirk Cheesman
Lance Wickman
Moses Samaha
Email: tony@associationmedia.com.au
aicm
From the President
Grant Morris CCE Australian President
T
here are many many reasons to be a member of the AICM, your Institute. One of these is our ability to be a united front and a strong voice to effect change in areas that matter to credit professionals right across the country. Well it’s time to band together and use this strength to make change. The action of Liquidators and their attempts to recover alleged preferential payments, collected by poor hardworking Credit Managers who are just doing their job, needs revision. Liquidators say they are simply doing what they are required to do by law ie claw back payments made to creditors of a failed company when that company was insolvent and meant the creditor received more than they would have received if the payment was set aside and the creditor claimed that amount in the winding up of the company. That’s fine if the payment was to a related party or not at arms length. In the last few months every Credit Professional I have spoken to (including some Insolvency Practitioners) share frustrations on the following points: 1. Many cases where amounts are repaid to Liquidators and there is ultimately no dividend to creditors with the recoveries simply meeting the costs of the Liquidator and his solicitors with most of these costs being the pursuit of these claims. 2. Should there be different rules for arm’s length creditors ie is it really unfair that a company able to chase and collect a valid debt for work done/goods supplied gets more than a company that doesn’t? Is an unsecured arm’s length creditor really able to exert pressure to a greater extent than other creditors? Surely withholding further supply is a common sense action more than one of exerting unfair pressure. 3. There is a 3 year statute of limitations on making a claim and all too often the claim is made in the final weeks and days of the 3 year period ie a long time after the matter has been put to bed by the Credit Manager with the debt written off and he/she is getting on with managing current customers and their payment habits. Why does it take 3 years to put together a claim? Consider: a. Tax returns and annual reports of businesses are filed every year. b. Insolvency firms are generally large and well resourced. c. Liquidators pay rates are set by themselves so their remuneration is at more than appropriate levels.
4
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
d. In most cases they were also the Administrator of the company where they are required to make initial thorough investigations into the business to provide a recommendation to creditors as to whether the company should be returned to the Directors control, pass into Liquidation or make recommendation of support or otherwise if a Deed of Company Arrangement is proposed. This means that within the first two months they have a fair idea of the position of the company. 4. Many claims being made for large amounts and being settled for small amounts with the trend being that this is due to a lack of integrity in the claims being made. Many claims are not made for genuine preferences and are “beefed up” with payments clearly not preferential in a blatant strategy for so called negotiation purposes. Examples of which I am aware include claims: a. for greater than half a million dollars settled for $10K because it wasn’t worth spending money on legal costs to defend the claim to zero. b. for some $100K settled for $2K. This was after court mediation and on the basis that it wasn’t worth spending money on legal costs to defend the claim to zero. To say nothing of the personal time involved. c. For circa $200K (one of more than a dozen different claims against various creditors of this large capital city based company) where after a Supreme Court mediation the capital city Liquidator trough his regional solicitor has submitted an offer to settle for less than $50K. And stepping away from preferences but staying with matters of liquidation we should add Liquidators fees 5. Many consider the fees charged by a Liquidator to be excessive. I am not talking about over servicing but the actual rates charged. In this area I don’t wish to dwell on the actual fees levied at the time of appointment as I understand that a Liquidator doesn’t always collect the fees ie some work does go unpaid and he doesn’t receive his $500+ per hour. I am talking about the review of the fee. In almost every liquidation report and meeting agenda there is an item for approval of fees which includes a formula for future increases in the fees. Examples of which we are aware show these frequently range from 5 – 10% and are by well known national firms. This is far greater than CPI or any increases most businesses are able to pass to their customers each year. Has your business increased it’s price by 10% every year? I am aware of
From the President
aicm
two cases where this was challenged at Creditor’s Meetings and the future increases reduced to 3% in one case and CPI in the other. To coin a phrase does this make you “as mad as hell and you’re not going to take it anymore?” It does many of us and together we can do something about it. With your support we are going to lobby the government to change the legislation because we believe: zz Preferential payments should only be recovered where the transaction is not at arms length or, worst case scenario any monies recovered must be shared by all legitimate creditors, not to simply meet the costs of collecting the preference. zz Receiving a preference claim 3 years after the company has passed into liquidation is far too long. With your support we are going to lobby the Australian Restructuring Insolvency and Turnaround Association (ARITA) to impress upon their members to: zz In the meantime make genuine, not inflated or spurious preference claims. zz Be realistic in their fee increases. We are going to have discussions with ARITA to improve the practices of Liquidators pending legislative change What must you do? zz Maintain your membership of the AICM, zz Encourage those in your business to join the AICM, zz Encourage your peers to join the AICM and therefore join the fight for positive change that will benefit us all. zz In some cases join a committee or division council or occasionally lend a hand to run our many events, and at the very least zz Speak up at Creditor’s meetings and or lodge proxies in favour of reasonable Liquidator fee increases only, not 5 - 10% each year. zz Maintain the rage. Change doesn’t happen without some effort. Speak up and act and let me know you support us – all we need is a quick “good onya” email to our CEO Nick or I – nick@aicm.com.au or grant.morris@coateshire.com.au. Better still take two minutes to complete a survey which addresses the points raised. The link is: https://www.surveymonkey.com/s/PrefPmts On other fronts we are tracking well. We look like having another great Young Credit Professional competition this year with various state Division Councils pushing hard and registrations of interest already higher than last year. This is a wonderful opportunity to recognise the talents of the outstanding performers in our profession like last year’s joint winners – SA’s Bec Edmiston and NSW’s Anna Golubeva. It’s not too late to nominate.
We have more than doubled the Super Early Bird Registrations for this year’s national conference which is being held in Sydney in October. A big thanks to the NSW Council for their work so far on the conference. All exhibitors are in although regretfully we have had to turn some away. A quality array of guest speakers are being lined up and everything is pointing to Col Magee and his NSW Council emulating the Sydney Olympics and making this the best conference ever. Congratulations to the 23 people who sat the CCE online exam in March. They have now to complete the assignment phase in coming months to attain their CCE. Good luck to each of you and we hope to see you at the exclusive CCE lunch at the national conference in October. Staying on matters CCE congratulations to the dozen new CCE’s from the September exam who have now successfully completed their assignments. See you at the aforementioned October’s CCE lunch where I note most of you won’t have far to travel because more than half of the new and pending CCE’s are from NSW. The Board is currently reviewing the Articles, By-laws and Code of Ethics to ensure they represent current thoughts and terminology/grammar is correct and modern. There are no substantive or structural changes planned however if you have any comment or changes please email them to us now. Your Board meets mainly by teleconference and holds 2-3 face to face meetings a year. The last of these was in April and the Victorian Director, Jeff Hurst, was unable to attend. The Victorian President, Lou Caldararo, deputised for Jeff and as the meeting was held in Sydney we also invited the NSW President Colin Magee to attend. This is part of our commitment for more openness and to work more closely with the Division Councils and an initiative we will continue at future board meetings. Enjoy and draw benefit from the magazine, it’s new articles, the regular “Can we help?” and “Around the State” sections and don’t be frightened to email your submissions, articles and questions to our CEO – nick@ aicm.com.au. In closing tell us if you agree or disagree with our proposed lobbying for changes in the liquidation area. Participate in some way to the advancement of your profession and I hope to see you at an AICM event soon as you support the Institute which supports you. – Grant Morris grant.morris@coateshire.com.au Ph: 0407 405 198
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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Human Resources
How to get buy-in on your next AICM career development opportunity Whether it is attending an evening event, participating in an awards program or undertaking a Certificate or Diploma training course the chances are you will need to get buy-in from someone to support the cost or time out of the office.
Time is money and you will probably only have a few minutes to get your point across whether it is seeking approval from those that control the purse strings or talking to a colleague, being able to articulate the value of career development can be tricky. Here are some tips for getting buy in from your decision makers.
Speak their language There is a long list of benefits in favour of taking part in the numerous AICM activities so you need to target the one that will resonate with the specific traits and needs of the person you are speaking to. If you are talking to the financial controller that has just walked out of a meeting about improving the bottom line they will be less moved by the great opportunities to network and grow your understanding of the broader Credit world. So hit him with the facts that focus on improving the bottom line for example from the last event that you or a colleague went to we saved money on lawyers to understand changing legislation and implement the required changes, this event will help us by…… Alternatively point out your membership discount or the fact the AICM is a not-for-profit so you won’t get it cheaper anywhere else. On the other hand you may
be fortunate enough to work for a company that values their staff and is committed to helping them grow and develop, so maybe just pointing out the fact that you will be learning something new or updating yourself on a crucial part of your role will be the main message to get across. Some decision-makers want to know about the return on investment and the bottom line. That means you’ll need to have done your research and have plausible figures ready to go. Consider your company’s business objectives. If you focus on what the CEO has been saying is critical to your business and pointing out how this contributes to the objectives it will make sense to everyone.
Use relevant examples Perhaps you have learned something that has saved time or money by reading the AICM Magazine or attending a meeting or maybe at a previous meeting you met someone that gave you a valuable insight into a customer or a different way of approaching a problem. Keep in mind two or three examples from your past, or examples you have heard from colleagues, these will be an invaluable tool in helping you shortcut around explaining the value and why you should attend.
Some decision-makers want to know about the return on investment and the bottom line. That means you’ll need to have done your research and have plausible figures ready to go. 6
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
In Memoriam Case studies and examples are often the best way to overcome any skepticism. If these speak to the persons needs and interests you will get results.
Get some inside help As a general rule, we all put a lot of trust in colleagues and peers who have proved themselves. That means you can boost your chances of getting the answer you want by enlisting someone to champion your efforts. Seek out people who have taken part in similar initiatives in their profession and are further up the organisational totem pole or are well respected by those you need to seek approval from. These people could be used as an example or to help champion your cause. Perhaps the accounting/finance team attend CPA conferences. If all else fails paying for it personally is worth considering as: zz It will show the decision makers that you are serious about your professional development and it will encourage them to support you the next time. zz You may be able to claim it as a tax deduction.
zz It is an investment in your career. zz When you utilise the information and contacts you make to the company’s benefit the decision makers will take notice of your value to the organisation.
Five (bite-sized) key takeaways zz Tell the decision-makers what they need to hear – how will this help them achieve their business objectives. zz Help them get their heads around it by giving them relevant case studies. zz Find some champions to back your cause. zz Use relevant examples zz Always keep the business objectives in mind. Have you won over someone not initially supporting your attendance at an AICM event? Or are you struggling to get that golden tick of approval? Share your stories with us in the AICM LinkedIn Group. Otherwise share your story at the next event. u
It is with great regret that we advise that a Past Director and State President – Mr Colin Prosser FICM CCE – passed away on Friday 24 April. Colin was a member of our institute for 30 years and during that time held many positions within the Vic/Tas Division as well as Director on the National Board. To say Colin was an active member of the AICM is an understatement to say the least – he joined the Vic/Tas Council looking after the Professional Development Chair between 1997 – 1999 and then again after a short break from 2003 – 2012. During this latter time he was Vic/Tas State President from 2004 – 2006 and then moved to be this Divisions Director responsible for the Membership portfolio. Where he introduced many new ideas which have helped the AICM retain membership numbers to this day. From 2009 until 2011 Colin was National Vice President. Along the way he was involved in the States YCPA panel including the National judging panel on a number of occasions between 2007 – 2011. We wish to express our condolences to his family and thank them for sharing Colin with us for so many years!
RIP – Colin Prosser.
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May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
7
Credit Management
50 By Kirk Cheesman*
shades OF RED shades
If there was a movie for the credit management industry, what might be the most embarrassing and awkward moments it could depict? Unfortunately, due to the nature of our industry, we are going to have circumstances where, despite our best checks, analysis and good credit management, we will meet characters who, from the debtor’s side, are not always going to tell the truth (hard to believe, I know!). The following, in no particular order, is a non-comprehensive listing of 50 scenarios we can associate with being ‘caught out’ with non-payment or a bad debt.
1. Not knowing who you are dealing with.
2. Not obtaining a signed credit application.
3. Not registering your security interests on the PPSR.
4. Not invoicing the correct entity. 5. The debtor changing their
12. Being put under pressure to open an account for an urgent sale.
13. Not writing to customers to confirm their credit limit and terms of payment when opening their account.
14. A preference claim by a Liquidator – after you have collected the account in full.
15. Personal guarantees not being correctly structured or signed.
16. Debtors skipping and disappearing.
17. Phantom companies being established.
18. Promises of additional capital injections.
19. Sale of business just prior to becoming insolvent.
20. Administrators challenging retention of title and your right to make recoveries.
6. Collection action not taken
21. Opening multiple accounts
promptly enough.
on the same debtor.
7. Allowing deliveries to continue
22. Reconciliation and on-going
while the account is overdue.
credit and dispute queries.
8. Accepting repayment plans
23. Changes in insolvency law. 24. Debtors entering Deed of
9. General/Sales Managers
8
assess credit-worthiness.
name and not notifying you.
without getting confirmation in writing.
Kirk Cheesman
10. Not obtaining trade references. 11. Not gathering information to
over-riding your decision to put an account on stop.
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
Company Arrangements then failing to pay dividends in line with those arrangements.
Credit Management
25. Post-dated cheques/bounced
45. The debtor is taking on a
cheques.
large project, out of scale with the size of their operation.
26. Tax office issues wind up notices without warning.
46. Increasingly being approached
27. Voluntary administration just
for a trade reference as your debtor shops around for alternative suppliers.
after a delivery has been made.
28. Political risks interfering with export trade.
29. Poor, or inadequate, communication from the sales team to the credit department.
30. Non-compliance with Privacy legislation.
31. Putting an account on stop and being asked (or told!) to take it off to supply more goods.
32. Advertising credit rebates
47. Being asked to discharge your PPSR registration as the debtor tries to maximise collateral for new borrowings.
48. The debtor appears to be ‘shopping around’ their accounts receivable book to ‘alternative’ financiers.
49. It becomes more difficult to speak to key officers of the debtor.
50. The debtor makes poor management decisions.
automatically deducted by debtors.
33. Non-disclosure of financial information.
34. The “I haven’t been paid, so I can’t pay you” excuse.
35. Inadequate or insufficient credit agreement.
36. Poor credit history of directors. 37. Not knowing the company is trading while insolvent.
38. Being lulled into a false sense of security – “they have always come good with payment in the past”.
39. Inability to pass on legal/ collection costs so you are not ‘out of pocket’.
40. Insufficient ‘paper trail’ – a ‘he said, she said’ scenario.
41. Not wanting to ‘upset’ the customer, sales are hard enough to come by!
42. Another creditor taking action when you are getting paid.
43. Key personnel leaving (jumping ship).
44. The debtor is going through a ‘restructuring exercise’.
Whilst all the above are frustrations, many can be avoided by implementing clear guidelines on the account management set up process for new and existing accounts. NCI recommend building a credit analysis matrix to highlight the information required to assess a credit limit based on the size and terms being offered. After the establishment of a credit limit, a checklist should be established to ensure nothing is missed in advising the client of their terms and conditions and credit limit, as well as other external factors such as confirming the correct legal entity and registering any applicable security interests on the PPSR. Ensure the documentation is appropriately signed by the debtor and securely stored where they can be readily retrieved in the event they need to be referred to. Regularly
review your terms and conditions to ensure they are up to date and take into account appropriate legislation. Make sure your staff are well trained and clear as to how your business will deal with an overdue account. A specific action plan should be established for sending demand letters, using external parties to support your practices, and being vigilant in applying the guidelines as to what would be acceptable in the event a repayment plan is agreed. If your business would suffer significant loss and cashflow pressure should one of your customers become insolvent, an analysis should be undertaken to identify if additional security or credit insurance could provide a safety net. There are many on-going new factors which are affecting the economy and the credit environment as we speak. Significant shifts in currencies, oil prices, interest rates and pressure in the mining and food service industries are only a few factors which have played a part in a number of insolvencies and payment pressures over the past 3 months. As one of the most important assets within a business, the debtor’s ledger and the processes surrounding the provision of credit should be given the appropriate level of focus and resources to ensure you limit the number of shades of red you may experience. u *Kirk Cheesman is Managing Director of National Credit Insurance (Brokers) Pty Ltd Kirk.Cheesman@nci.com.au *NCI’s new Credit Consultancy Report can provide a full credit review and assessment of your top risks.
After the establishment of a credit limit, a checklist should be established to ensure nothing is missed in advising the client of their terms and conditions and credit limit...
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
9
Credit Management
Customer, customer, customer, debtor….
By Lance Wickman*
Lance Wickman
10
Billing and collections is an often undervalued “moment of truth” in the overall customer experience that businesses can no longer afford to ignore
invoice or quickly arrange payment. Getting other areas of the business to resolve disputes can be very timeconsuming and frustrating.
A lot of time and money goes into acquiring and servicing customers, but post the transaction, they typically morph from customer to “debtor”. All too often the billing and collection processes are expected to follow the simplistic view that we have done our part, here is your invoice, now pay us. But anyone working in credit management will know that it’s not always that simple. Customers may have legitimate reasons for not paying that you don’t know about, and even when they want to pay, it’s not always that easy for them to process your
It’s time for businesses to take another look at this critical phase of the customer relationship and see what is required to manage it better by taking some cues from sales and marketing
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
In 2014, according to Gartner, around $24 billion was spent by companies on CRM systems to better manage their sales and marketing efforts by capturing information and automating much of the communications and workflow. There have been massive advancements in on-line sales and
Credit Management
eCommerce automation. Businesses continue to invest in upgrading their core ERP, accounting, or practice management software, but little has changed in the way organisations bill and collect payments. Collections and dispute management is still very manual and call centre centric with most companies running off the aged trial balance, a revolution dating back over 60 years. Self-help services for billing, disputes and ePayment are clumsy or non-existent.
Customer expectations have risen, but investment in appropriate systems to better meet them has not E-billing and e-invoicing have been around for some time, but the default electronic bill or invoice in
Most companies struggle to chase the long tail of slow payers every month effectively, efficiently, and in a timely manner. $
Customers the marketplace is a static PDF, an image of the paper version. This is not very useful for the recipient, hence the typically low adoption rates, estimated at just 14%-24% (Billentis Report 2014). Batch treatment or outsourcing of the billing function results in a disconnect from collections. Credit management is a separate
department and not integrated with either billing or customer services. Little attention has been given to electronic bill-pay. Payment gateways have been developed for eCommerce and demand a “Pay Now” transaction before goods are released. Bill-pay on the other hand, is credit based and so customers don’t want to pay now, they want to pay on or around the due date.
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May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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Credit Management
When a company does decide to invest in better eBilling and AR Management automation tools, the rationale typically focuses on cost savings and reduced DSO. These are very valid, but should they be the only drivers? Increasingly, smart operators realise that billing and collections is a critical part of the on-going relationship, impacting customer satisfaction, loyalty, and profitability. They are adopting new customerorientated approaches to managing the “Post Transactional Relationship”. Pitney Bowes’ Top eBilling Trends includes these points: 1. Billers will stop perceiving the billing event and eBill as a commodity that drives cost savings, and start leveraging online customer care as a differentiating and transformational part of their total product offering. 2. Leading companies will review and revamp their online customer care with the sole objective of turning customers into fans. Jerry Ashton, from CFO Advisors has this to say about credit management trends: 1. Customer service, especially in a down economy, is now priority #1 and must run seamlessly through sales, credit, and collections. 2. Credit Management is dead; its successor is relationship management. 3. Slow-pay is the symptom, not the disease. 4. Allow client access to selected AR data and encourage self-help and feedback. 5. Make sure the client is touched affordably; and via the channels that best suit them.
This kind of thinking requires a much more holistic approach to billing and collections, with streamlined processes linked to automated workflows and communications to support the billing and credit teams. Consider a scenario where your customer is delighted to receive an electronic bill from you, not because it’s good for you, but because it adds value to them. Instead of just an image of their paper invoice, they receive a fully interactive bill that allows them to easily establish a payment for the due date, initiate a query or dispute, and even download the data version to their own AP system for processing. This is called a hybrid e-invoice delivering both the image and more importantly, the associated data. It is also interactive with embedded functionality that makes it really easy to process straight away. No need to print it out or return to it later on the due date. Billentis are predicting that this will be the fastest growing electronic billing format over the next 5-10 years rapidly displacing pure image PDF.
Quickly distinguishing between legitimate barriers to payment and slow payers allows appropriate escalations to be activated promptly... 12
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
The high take up of these interactive, hybrid invoices creates a digital relationship with those responsible for payment on the customer side, making it possible for you to use “low cost touches”, just like eMarketing does in the front-office, to cost effectively chase the long tail of overdue accounts. Quickly distinguishing between legitimate barriers to payment and slow payers allows appropriate escalations to be activated promptly initiating dispute management workflows or automated dunning communications. Imagine if you could present your customers with targeted cross-sell/ up-sell opportunities direct from your interactive bill? Do you think the marketing department might get excited about billing as a new sales channel? Customers can choose how they wish to receive invoices and reminders. Disputes are easy to log and track. Bill pay is as easy as eCommerce. “Self-help” becomes attractive to your clients for all the right reasons, and at the same time your costs are reduced and cashflow increases. Marcel Wiedenbrugge, author of Happy Customers Faster Cash encapsulates this approach using the concept of Financial CRM, or FRM –
Financial Relationship Management, a model where credit management is seen as an integral element in the overall customer relationship, not just an isolated process to get the money in. This approach focuses on managing the financial relationship with the customer in such a way that the financial and commercial goals of both the customer and supplier are met. In his book, The Customer Profit Maxim, Wiedenbrugge goes a step further, suggesting that highly integrated credit management is a key contributor to overall business profitability. So why can’t you do all this with your existing ERP or accounting software? Well it’s the same reason companies invest in CRM, eMarketing and web services tools. ERPs and accounting software packages have not been designed for sophisticated customer-based workflow and communications, which is what interactive billing, account self-help, smart collections and eBill-pay is all about.
FRM aims to bring to the back-office what CRM has brought to the front-office Financial Relationship Management is a relatively new approach that encompasses a range of functions, and until recently, would have required a bespoke solution build, something only feasible for very large businesses. In the last few years this has changed, and implementing an FRM solution no longer requires heavy and expensive custom development, and integration with existing systems is greatly simplified. The results are very measurable, and the ROI very rapid. Within just 6-9 months an organisation could expect to achieve significant improvements in key areas including: 1. Enhanced customer experience 2. Reduced costs for bill presentment and reminders 3. High levels of “Self-Help” via a client portal 4. Reduced DSO 5. Regular and consistent follow up to ALL slow payers If you are seeking to create meaningful points of difference in the marketplace, increase customer satisfaction, and at the same time improve your cashflow, it might be time to take a fresh look at how you incorporate billing and collections into the broader customer service function. Starting with the customer in mind is a wellunderstood concept in sales, marketing and product/ service delivery. Why wouldn’t you apply the same mindset to your billing and collections? u *Lance Wickman is the founder and CEO of OfficeTorque, a webbased software company specialising in Financial Relationship Management (FRM), a customer centric, holistic approach to billing, accounts receivables management, and payment. Visit www. officetorque.com Happy Customers Faster Cash and The Customer Profit Maxim are both available from Amazon.
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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Credit Management
Veda Quarterly Business Credit Demand Index: Business credit demand shows signs of improvement l Overall business credit applications rose 2.4% (vs March quarter 2014) l Business loans (+7.8%) and asset finance applications (+2.2%) grew, trade credit declined (-2.6%) (vs March quarter 2014) l Business loan applications highest in 5 quarters; asset finance applications highest in 7 quarters The Veda Quarterly Business Credit Demand Index, measuring applications for business loans, trade credit and asset finance, rose at an annual rate of 2.4% in the March 2015 quarter. The increase reflected significant rises in business loan applications (+7.8%) and asset finance applications (+2.2%), offset by a decline in trade credit applications (-2.6%). This marks the first lift in asset finance applications since the June 2013 quarter.
Moses Samaha
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Released recently, the Veda Business Credit Demand Index has historically proven to be a lead indicator of how the overall economy is performing. Veda’s General Manager Commercial Credit, Moses Samaha, said: “During the March quarter we saw signs of a pick up in business credit growth, after a softer December quarter. Growth in business loan applications was the strongest it has been since the December 2013 quarter, and we saw positive asset finance application figures for the first time in seven quarters. “Non-mining states – NSW, Victoria, Tasmania, the ACT and South Australia – performed strongly in the March quarter, recording an annual growth rate of 3.4%. However, despite these promising signs, business investment is being held back by the soft business credit growth in the mining states,” he said. The pace of growth in overall business credit applications accelerated in the March 2015 quarter. Victoria (+3.7%) and NSW (+3.0%) experienced positive growth in business credit applications. In
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
contrast, mining states showed weaker business credit demand in the March quarter, with Queensland (+0.8%) and WA (+0.5%) growing more moderately. There was strong growth in business loan applications, which rose 7.8% in the March 2015 quarter. This growth was seen across both the mining and non-mining states. NSW (+9.5%), Queensland (+9.5%), Victoria (+6.0%) SA (+14.2%) and the ACT (+10.1%) all experienced solid growth in business loan applications. While growth was more modest in WA (+1.8%), it has picked up from the contraction in business loan applications seen in the December quarter 2014. The growth in business loans was driven in large part by the increased growth rate of mortgage applications (+13.1%) and credit cards (+15.7%). Applications for premium finance (+3.2%) and overdrafts (+4.5%) also grew, while lending proposal applications (+5.4%) remained solid despite the annual growth rate easing in the March quarter. “Recently we’ve seen an upswing in business loan pledges by banks
Credit Management
Graph 1: Changes in Overall Business Credit Demand – Quarterly Year on Year %
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 data for a like-for-like comparison. and other lenders. The increased competition in this space has created an attractive lending market for SMEs and contributed to the growth of business loan applications,” Mr Samaha said. Asset finance applications picked up in the March quarter (+2.2%). After experiencing sharp falls throughout much of 2014, asset finance applications continued to recover across the mining states in the March quarter. The NT (+3.3%) recorded a strong turn around in asset finance applications, while Queensland (-2.9%) and WA (-0.9%) experienced
much more modest declines compared to the March 2014 quarter. Across the non-mining states, ACT (+18.0%), Victoria (+6.8%), SA (+3.5%) and NSW (+2.2%) all saw positive growth in asset finance applications. Tasmania (-6.2%) recorded the largest contraction in applications. Within asset finance, there was an improvement seen across the commercial rental (+15.3%), hire purchase (+4.3%) and personal loan (+3.2%) categories. However, leasing (-3.9%) showed a decline in applications. “One year post the mining boom, it
appears we may now be seeing what could be the new norm in growth rates for asset finance. There also appears to be a small return to growth in auto finance and IT asset finance in the market,” Mr Samaha said. Trade credit applications fell in the March quarter (-2.6%). Significant drops in trade credit applications were recorded across the NT (-11.4%), Tasmania (-7.8%), SA (-5.6%), Queensland (-4.3%), NSW (-2.7%) and Victoria (-1.3%). Only the ACT (+6.9%) and WA (+0.2%) maintained positive trade credit growth in the March quarter. “The fall in trade credit applications is in line with the long term trend of softening trade credit demand. Softer trade credit conditions could be an early sign of moderate business confidence amongst nonlending credit providers,” Mr Samaha said. u www.veda.com.au DISCLAIMER: Purpose of Veda media releases: Veda Indices releases are intended as a contemporary contribution to data and commentary in relation to credit activity in the Australian economy. The information in this release is general in nature, is not intended to provide guidance or commentary as to Veda’s financial position and does not constitute legal, accounting or other financial advice. To the extent permitted by law, Veda provides no representations, undertakings or warranties concerning the accuracy, completeness or upto-date nature of the information provided, and specifically excludes all liability or responsibility for any loss or damage arising out of reliance on information in this release including any consequential or indirect loss, loss of profit, loss of revenue or loss of business opportunity.
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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Credit Management
Riding the currency swings with data By Darin Milner* Big moves in exchange rates are presenting unexpected and fastmoving challenges for businesses that have international customers and suppliers – or that are looking to branch out into new markets. Over the past six months, the drop in the value of Aussie dollar has rebalanced the playing field for exporters and opened up new opportunities for businesses looking to build and sell to a global customer base. The timing seems right. Dun & Bradstreet’s Business Expectations Survey conducted during Q1 2015 found that business executives
Darin Milner
16
consider weak local demand as the key issue for their operations this year. In contrast, the government’s AUSTRADE research finds that 69% of exporting businesses say that the outlook for this year is better than 2014 while 74% intend to grow into two new markets in the next two years. Combined with free trade agreements with China, Japan and a reawakening US economy (Australia’s three biggest trade partners), there are clear reasons for businesses to turn their attention overseas. While the opportunities can be clearly stated, challenges remain on how to locate high-value prospects, with ROI scrutiny, and control the risks involved with managing international business relationships. To help sidestep those risks credit and sales teams are increasingly turning to new sets of data that reach beyond Australia’s borders. Business information covering payment risks and credit terms can now be accessed on more than 200 countries. This is supported by critical details on the political, commercial, macro-economic and external factors that are likely to influence trade in the region. With the IMF forecasting the world’s
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
strongest growth in 2015 will come from emerging and developing nations (4.3% compared to 2.4% in advanced economies), the demand for country risk data covering less known markets has become heightened. Surpassing the growth in data on country conditions is international company insight, which is helping Australian operations make critical decisions about whether to commence a business relationship with an international entity, and under what terms. International entity data can include factors such as a business’s financial strength and credit risk, its current and likely future payment performance, risks of default and failure, and its associated companies and subsidiaries. Efficient businesses are integrating this information within their risk management platforms to better automate the decision-making process used for their credit and customer assessments. The sweet spot for businesses in the current low-dollar environment, however, is overlaying this country and company risk information with sales data to find the right contacts to approach when looking to develop international relationships and build a new customer base.
This information juncture can now be reached with the growing availability of sales insight, including structured and meaningful ‘big data’, which can be plugged into risk management and portfolio management systems to provide a complete, integrated view of international opportunity and risk. The scale of global sales and marketing data for this purpose is enormous. Dun & Bradstreet’s global sales database alone covers 85 million companies, 100 million people and more than 900 industry segments. This data wave has opened up a world of opportunities for local businesses looking to identify and review new markets, industry segments and potential sales targets. Until now, the challenge has been how to best filter and make fit-for-use the huge volumes of information. In essence, how to turn the data into meaningful insight that identifies the viable international businesses to target for sales while shining a light on those customers that should be avoided. With tools available to manipulate both unstructured and organised data it has become much easier to find the information required to guide these decisions and segment by company records, global contacts, payment risk scores, industry and competitor insight, family trees, financial charts, and company social media references. The scope and immediacy of the international data now available is allowing Australian businesses to be more agile in responding to the economic conditions that they face; repositioning their exposure in coordination with factors such as currency swings and shifting their focus from local to global, import to export, and back again as required. With a stagnant local economy and an easing bias for the value of the Australian dollar, the current position for many is outward, to take advantage of the favourable exchange rate and medium-term growth potential in overseas markets. While there are risks that come with the commercial upside of international business, these are matched by the growing and detailed sets of data that is available to help businesses make their move with confidence. u *Darin Milner is Director, Risk Management Solutions for Dun & Bradstreet. www.dnb.com.au
With the IMF forecasting the world’s strongest growth in 2015 will come from emerging and developing nations ... the demand for country risk data covering less known markets has become heightened.
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May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
17
Legal
It’s not all Doom and Gloom:
Restructures can breathe life to an Insolvency By Joseph Scarcella* The Small to Medium Enterprise sector of the economy is full of examples of corporate insolvencies with no returns to unsecured creditors. Often, the appointment of the administrator means the end; not just for the company, but its creditors. However, this does not necessarily have to be the case. Clever restructuring techniques can be, and have been, used to achieve returns to creditors in circumstances where that would otherwise not be the case. A recent example is the successful restructure of CBD Energy Limited. This Aussie clean energy company was initially listed on the ASX with a view of raising funds to support its solar and wind farm activities. It had interests in clean energy projects around the world, including Europe, the US and the ASIA Pacific region (together with valuable licenses to run a solar business in the US). CBD experienced cash flow issues but raised funds through a bond issue in the UK, and then successfully sought listing on the US NASDAQ platform (after abandoning the listing on the ASX – the view taken that the Australian market was not ready for this type of investment) and raised funds through the US capital markets. Problems emerged in respect of CBD’s historical debt. Essentially, its
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business was deprived of working capital because of debt servicing commitments, and the cash burn associated with its business model. It was extended finance by its major shareholder (who took security over its assets) but it literally ran out of money to fund its ongoing operations. Several problems then emerged. CBD became subject to a class action in Texas (in respect of its US capital raising), it was unable to raise further funds from the US market due to an irregularity in its accounts, it faced potential action from the NASDAQ and its key contractual counterparties commenced issuing breach and termination notices. The Board of CBD then appointed Grant Thornton as voluntary administrators in November 2014. However, the cash position of CBD did not permit the administrators to continue to run the business, pay employees and a raft of termination notices from key counterparties began flooding in. Further, injunction proceedings in New York were commenced by one of its shareholders alleging misleading conduct in CBD’s most recent rights issue. What looked like the inevitable value destruction had well and truly commenced. Up till now, this, to the reader, would be an all too familiar story. However, all stakeholders refused to lay down.
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
CBD’s major creditor extended emergency financing to allow it fund its essential operations during the administration and explore the prospect of a going-concern sale or restructure. The Administrators and the Board of CBD began looking for potential suitors for a sale and found BluNRGY (a US energy monitoring and management company) who were interested in taking over the US solar business (there were other potential buyers for the business but this offer was the one ultimately accepted by creditors). This left the balance of the businesses without a buyer. However, that was not the only concern. The funding for the operations of the company had run out just prior to the Christmas break and without any of the transactions read to complete at this time, there would have been no one to run the business postChristmas, resulting in a complete destruction of any remaining value. Lawyers for the Administrators then proposed an arrangement in consultation with BluNRGY that involved: zz The major shareholder relinquishing its rights over certain securities to allow the business to operate pending the BluNRGY deal. zz The sale or transfer of the assets unwanted by BluNRGY to major debt holders on a debt-for-asset swap.
Legal
zz BluNRGY proposing a Deed of Company Arrangement1 which involved: {{ The remaining unwanted assets of CBD being transferred to a trust; {{ BluNRGY making a cash payment to the Administrators to be held in a trust; {{ BluNRGY taking over the Company and raising the requisite cash to make the remaining CBD solvent; {{ The Creditors of CBD Energy being issued a certain number of shares in CBD. All the cash and assets held in trust be distributed to creditors under the form of a creditors’ trust2. The use of a creditors trust structure meant that: {{ CBD would come out of administration immediately upon all the cash, shares and assets being transferred to the creditors’ trust; and {{ The Administrators then being able to distribute the cash, shares and assets to the creditors in accordance with their statutory entitlements. The above would result in CBD Energy
being restructured without its legacy debts, with sufficient working capital to fund the US solar operation giving creditors a chance to participate in the upside of any successful ventures that CBD would undertake. However, there remained potential road blocks to implementing this arrangement. Briefly they were as follows: zz The transaction had to be concluded over the Christmas/ New Year period; zz The New York Injunction proceedings threatened the viability of the restructure; and zz CBD needed to maintain its NASDAQ listing in order to enable its creditors to monetise the shares proposed to be issued to them. The Administrators, BluNRGY and the parties’ lawyers were able to agree and negotiate the transaction documents over Christmas and release disclosures to the creditors of CBD Energy to allow creditors to vote in favour of the above proposal at creditors meetings held early in the new year. The injunction in New York was temporarily halted and BluNRGY negotiated a settlement with the
plaintiff. And CBD’s US lawyers and the Administrators’ Australian lawyers appeared before an administrative hearing in the US which found that CBD was entitled to maintain its NASDAQ listing. The reader can be forgiven in thinking that the restructure table (below left) is highly unusual. However, despite the breadth and jurisdictions of its operations (and its public listing) CBD Energy was a classic SME insolvency. It represents the first successful restructure of an Australian NASDAQ listed entity in which all the key participants received both cash and shares. The learnings from restructures such as CBD Energy is important to all stakeholders in an insolvency; it’s not all doom and gloom once the administrator is appointed. u FOOTNOTES: 1 Readers will no doubt be aware that a deed of company arrangement (DOCA) is a binding arrangement between a company and its creditors governing how the company’s affairs will be dealt with, which may be agreed to as a result of the company entering voluntary administration. It aims to maximise the chances of the company, or as much as possible of its business, continuing, or to provide a better return for creditors than an immediate winding up of the company, or both. A creditors’ trust in a DOCA is a mechanism used to accelerate a company’s exit from external administration. To date, it has been used most commonly (but not exclusively) in connection with the rehabilitation of publicly listed companies. Usually, under the terms of the DOCA, a trust entity is created and the company’s obligations to some or all of the creditors bound by the DOCA are compromised and transferred to the trust. Those creditors become beneficiaries of the trust.
2
Below is a diagrammatical depiction of the restructure:
*Joseph Scarcella is a partner at Ashurst in the Restructuring & Special Situations Group in Sydney. Joseph is an expert in all aspects of all forms of insolvency administrations, security enforcement, insolvency related litigation, restructuring techniques and workouts. He is known for the commerciality and speed of his advice and his friendly approach. His experience spans complex insolvencies such as finance and insurance company collapses through to advising major banks on large syndicated and bilateral exposures as well as assisting corporate clients in respect of their exposure to financially precarious counterparties.
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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Legal
Bankruptcy - the F1 18 of debt collection Simple tips to use the bankruptcy process to get your difficult payers to pay By Roger Mendelson*
Roger Mendelson
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Most credit managers have a general idea about the bankruptcy process but few use it consistently and effectively. This is borne out by the relatively small number of bankruptcy actions initiated each year. If used correctly, bankruptcy is by far the most powerful tool when collecting money from an individual. Although there are many different grounds for initiating bankruptcy action, for practical purposes, there is only one, which is that you must have a judgment for over $5,000. Thus, the starting point is that the original debt must be for approximately $4,000. By adding legal costs on the judgment and interest prior to the judgment, this will generally get you over the
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
$5,000 mark (depending on the applicable state). The very first step in the process should be to investigate assets held by the debtor. What you are looking for is equity in real estate. By carrying out searches, doing a specific title search and then a Google search on the property, it is not too difficult to, easily and quickly, ascertain the amount of equity the debtor has in a particular property. Once this is established, that file should be ear-marked for preferential treatment. Under no circumstances, accept any installment offers, because this may make it difficult to bring bankruptcy action later. On those files, insist on payment in full only. Bankruptcy action is carried out in two stages. Stage One,
Legal
issue and service of the Notice, is relatively cheap. By way of example, Mendelsons Lawyers offers a Fixed Price Fully Inclusive cost for Stage One, including GST of just below $2,000. Our success rate on Stage One is approximately 80% (success being defined as acceptance of a sum our client is satisfied with). After service of the Notice, the debtor has 21 days within which to either pay the debt in full or to reach a settlement with the creditor. If he does neither, then after the 21 day period, he is deemed to have committed an act of bankruptcy. Our policy is to make no contact with the debtor during the 21 day period. If he does pay the debt during that period, he is entitled to pay it without paying any additional costs for the Notice. However, after the 21 day period, it is possible to enter in to an installment arrangement and to provide that the debtor is also liable for legal costs. For the 20% of so of cases where a Notice is not satisfied, a decision then needs to be taken on whether or not to proceed to Stage Two (Creditor’s Petition). As long as your initial investigations have been carried out, this will not be a difficult decision, because you would not normally have reached this point, unless you are satisfied that the debtor has sufficient equity in real estate in order to meet all or most of the debt, together with costs. Stage Two is costlier. By way of example, Mendelsons Lawyers charges $4,120 (if the creditor is an individual) and $5,755 (if the creditor is a company). These costs are fully inclusive of all disbursements and include GST. Often the most difficult debtors will wait until they are served with a Petition. However, once they are served, if they have assets to lose, they will begin negotiations. It may be necessary to get
Often the most difficult debtors will wait until they are served with a Petition. However, once they are served, if they have assets to lose, they will begin negotiations. to the first hearing date and to then negotiate an adjournment (with a cost order against the debtor). At this stage, the heat is really on, and in most cases, a satisfactory result will be negotiated, without making the debtor bankrupt. In approximately 10% of the cases, which proceed to Stage Two, the debtor will prove impossible to negotiate with and an order for bankruptcy will be made. As long as there are sufficient assets available, the appointed trustee will usually be able to cover his costs, pay the petitioning creditors costs and there will be something left over for the creditors. The first allocation of funds from the estate is to pay the petitioning creditor’s legal costs. If bankruptcy is such a powerful and effective tool, why is it not used more often? My answer to that question is that law firms which do not actively practice in bankruptcy work are reluctant to promote it, because they lack the expertise to handle it. It is specialised work which should only be handled by a lawyer experienced in it. A secondary reason is that there is often a perception by
creditors that their reputation will be harmed, if they are known to take bankruptcy action. This reason has simply no basis. It is not of interest to programs like A Current Affair that bankruptcy action is undertaken. It is an everyday, perfectly valid legal enforcement process. u *Roger Mendelson is the principal of Mendelsons National Debt Collection Lawyers Pty Ltd which is associated with. Prushka. The writer is also author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival, both published by New Holland Publishers. For information about Mendelson’s Fixed Price Fully Inclusive Bankruptcy service, contact Sue Stevens on (03) 9872 7289 or email svs@mendelsons.com.au or go to www.mendelsons.com.au.
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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PPS
PPSA: “The Whittaker Review” – We’ve only just begun
By Peter Mills*
This article provides suggestions for you as to recommendations made under the “Whittaker Review” of the PPSA, and which are most relevant to you. Discussion topics for your views will also be open on CreditNetwork and AICM on LinkedIn for you to contribute your comments. Please contact Nick Pilavidis or I if you wish to discuss further approaches to government as well as other industry group representations, as we want to know what your and their issues are.
“Almost 160 separate submissions and response documents, by some 40 organisations were reviewed by me in this process.” Why was there a review? It was a requirement of the PPSA1 that a government review had to be completed by 30 January 2015.
Who was involved?
Peter Mills
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Bruce Whittaker2 was appointed by the government in April 2014 to conduct the review (which I will call “the Whittaker Review”). On behalf of the AICM, I reviewed the material, with input from various members, and provided suitable submissions and responses to the Whittaker Review. Almost 160 separate submissions and response documents, by some 40 organisations were reviewed by me in this process.
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
Six(6) submissions and response documents were also provided by me (on behalf of the AICM) during the Whittaker Review.
What did the Whittaker Review say that is relevant to me, and what should I do? Its recommendations (540 page report) were released in March 2015. The table on the following 2 pages contains some of these as likely most relevant to you, with my initial comments as to what you should consider. It is now for government to consider this full report and decide what it wants to do, subject to any other representations. You should consider now whether your business, industry body, or your stakeholders, should make representations to the government on any of the recommendations. You should also plan when and what compliance changes you will make, or are likely to have to make.
How soon should I do something, and what should I do? Key Points. There is currently no stated time frame for the recommendations to be dealt with. It is suspected however that many, especially as to the register’s functionality, may occur as early as within the next 3 - 6 months. zz From my experience, many businesses left it until just before or after the start of the PPSA register before dealing with issues.
me)
PPS
This cost them a lot of money eg many lost transitional fee exemptions, due to not updating their T+C’s before 30 January 2012. zz Obtain advice immediately as to how to prepare for and deal with the recommendations (whether enacted in part or in whole) to: {{ benefit your businesses, and {{ reduce your compliance time, costs and paperwork. zz The Whittaker Review has recommended that another review occur in 5 years’ time. zz The introduction of the PPSA regime into foreign countries is being pushed by various Governments and others. You should consider if your business, customers or suppliers operate in countries which have, or are considering, enacting PPS laws and registers similar to
the PPSA (including the South Pacific and UK) and how compliance can be effected so as to deal with this. u FOOTNOTES: 1
Section 343 Personal Property Securities Act (2009)
2
At time of preparing this article, Bruce Whittaker was scheduled to present at AICM NSW CNN on 14 April 2015 in Sydney.
*Peter Mills is a Special Counsel with Thomson Geer Lawyers. Peter kindly reviewed the mountain of material, attended meetings and prepared the submissions and responses, on behalf of AICM for the Whittaker Review. Peter is currently the Vice-President (Qld Division) of the AICM, a member of the Qld Law Society’s Banking & Financial Services Committee and a Working Group Member of the UK Secured Transactions Law Reform Project (as to the creation and registration of security interests under their possible PPSA). In 2010 Peter received an AICM National award for services in relation to PPS, in 2013 received the inaugural AICM Marion Hintz award and publishes regular newsletters on the PPSA.
You should consider now whether your business, industry body, or your stakeholders, should make representations to the government on any of the recommendations.
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May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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PPS
PPSA: “The Whittaker Review” cont’d
Recommendations and Initial Comments Recommendations by the Whittaker Reports
Initial Comments
Overarching recommendations
Members should immediately consider their business and/ or specific industry organisations making further submissions in conjunction with the AICM.
• That Government engage private-sector input in the drafting of the Bill for any amending legislation and further transitional provisions; • That Government develop and publish a detailed implementation plan for the period leading up to commencement of the amending legislation, in collaboration with the business community (such as through AFSA’s consultative forums). • That Government develop a targeted yet multi-faceted campaign, in the lead-up to the amendments to the Act coming into operation, to increase levels of awareness among small businesses of the Act and its implications.
• That Government develop and implement a campaign to increase understanding among businesses and their advisers of the detailed effect of the Act, and take other steps that could assist businesses on an ongoing basis to understand how the Act affects them and how best to take advantage of it. • That Government consult with business and other stakeholders in 5 years’ time, to determine whether there is a need for further reform of the Act.
PPSA’s reach - How, and to who, the PPSA is to apply
Initial Comments
American companies not be exempted from the PPSA. NB Following issues concerning a potential loss by an American related supplier to the Forge Group (in liquidation), members of the American Chamber of Commerce had asked for this exemption.
Make overseas colleagues in your company, customers or from other businesses, aware of the PPSA if they are not already aware.
That the PPSA’s application to goods not be defined by a specific value.
No action required.
“Conditional Sale contracts” be changed to the term “agreements subject to retention of title”.
Consider terms used in credit applications, T+C’s and other documents.
“PPS lease” be changed to apply to leases of any goods for more than one year, or an indefinite term. This would be so that serial numbered goods (eg motor vehicles) would not have a 90 day test any more.
Consider need to register and terms of T+C’s and other documents.
Removal of “bailments” from the definition of PPS lease
Review T+C’s as it may reduce compliance.
Definition of “commercial consignment” be changed to reflect other PPS laws
Consider if your need to register will be reduced.
That the ability for State governments to legislate to exempt property from being caught by the PPSA be removed
Consider if you or your customers’ assets might not currently fall under the PPSA eg WA taxi licenses.
State and Federal government to discuss possibility of interests in land also being added to PPSA
Consider protocols and registrations. This was expressly rejected previously by government and seems unlikely to change.
Terminology in security agreements state certain specific issues as to the collateral description in the agreement
Review terms currently used in credit applications, T+C’s and other documents.
Temporary perfection in proceeds be extended from 5, to 10, business days
Consistent with PPS laws in other countries.
Issues raised as to registration
Initial Comments
That the register functionality be reviewed to make it easier for unsophisticated users.
Consider opportunities to substantially reduce compliance costs.
The fields of collateral type be removed.
Consider your businesses practices and manuals
That a registration be able to be made against more than one type of collateral eg motor vehicles and other goods covered by the one finance statement and one fee.
Consider savings you can make or additional registrations can be effected with such savings
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CREDIT MANAGEMENT IN AUSTRALIA • May 2015
PPS
“Free text” field remain non-compulsory for inclusion of details of collateral. A description of the collateral to become compulsory.
Consider protocols currently used.
That the government consider whether the current definition of “motor vehicle” be limited to only those with a Vehicle Identification Number (ie VIN).
Consider “motor vehicle” collateral currently used, and/or registered against by its serial number, by your company.
That the correct identifier to register against trust assets be those of the trustee and not the ABN of the trust.
Consider protocols for approving and registering credit and verification of the trustee of a trust. NB. Neither the ASIC register (which verifies ACN’s) or the ABN Lookup (which verifies ABN’s) can verify details of who is the trustee entity of a specific ABN.
That the Registrar be asked to explore as to whether members of an SPG are capable of being changed.
Where an SPG is made up of several persons, and these might change from time to time, consider how this might assist.
The government consider creating a separate register as to construction and heavy equipment
Consider whether it might create likely duplication for your business.
Errors by parties by removal of data (eg amendment by removal of finance statement) not be capable of correction by the Registrar.
Make sure access and control over tokens is highly protected.
Government to consider situations such as whether the head lessor of goods must register against the lessee and the sublessee to protect itself. Also, that section 53 PPSA be deleted.
Important if your goods are subleased/ sub-bailed to others by your customers. Consider if T+C’s need to be altered due to this.
The “garage rule” take free rule be increased to $10,000
Might your non-inventory collateral be worth >$5,000 less than $10,000 and sold at garage sales? Who are your customer likely to sell to and how?
The PPSA be changed so that non-serial numbered consumer property can give rise to a PMSI
Consider possible compliance.
Timing under section 62 and 63 PPSA be clarified so that it only applies where the grantor obtains or has possession as a grantor.
Will help clarify the outcome if a customer has possession of goods before registration, but in a capacity other than as a grantor.
The PPSA be amended so that a provider of new value can obtain priority over inventory financiers PMSI and non-PMSI’s in proceeds, and that the notice processes be changed
Providers of new value should consider processes and opportunities for additional collateral.
Agribusiness financiers and farming organisations be afforded a further opportunity to comment on retaining the special provisions as to priority as to agricultural under the PPSA
Financiers of, and suppliers to, agribusiness, should consider making representations. Loss of these special priorities might see them substantially prejudiced.
Issue raised as to enforcement
Initial Comments
That unperfected PPS leases not vest in the grantor on its insolvency. NB it was declined to recommend that the interest of a lessor hire business should not suffer loss of priority to other interests. ie any AllPAAP’s will have priority ahead of the lessor under an unperfected PPS lease.
Important: if you hire or lease goods, take advice on how these changes would genuinely reduce or increase your risk and procedures and compliance costs.
Other matters
Initial Comments
That government discuss with insolvency practitioners, that new powers be enacted so that if a insolvency practitioner is not provided with certain information within a set time (say 21 days) that the security interest be deemed unsecured.
This would be a risk issue given the possibility of SPG’s failing to check emails and the like addressed to their PPS email addresses.
Section 588FL Corporations Act (failure to register within 20 business days) be repealed
The test and times under the PPSA determine priority, and easier to find if all is in one Act. Consider your procedures.
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
25
PPS
Hire Industry exposed to PPSA The wording
By Adrian Hunter* Businesses operating in the hiring industry fail to mobilise and protect their assets in the face of ongoing exposure to the PPSA via agreements with no contractual end date. A failure to register will mean a failure to recover your goods.
Industry background In early 2014, significant lobbying by the Hire Industry occurred as a result of hire agreements for an ‘indefinite’ term (ie a hire contract with no end date) being captured by various sections of the Personal Property Securities Act 2009 (PPSA). Concern was also raised by this industry at this time as to what constituted a ‘Motor Vehicle’. As a result of this pressure changes were passed by the Federal Government which came into effect from 1 July 2014. However, those changes were aimed squarely at the definition of what a ‘Motor Vehicle’ was rather than addressing the concerns of the industry regarding the industry wide usage of agreements for an ‘indefinite’ term. And it is this ‘indefinite’ term which continues to cause problems for the Hire Industry (and many others) and has resulted in the loss of hired equipment in the reported case of Carrafa & Others v Doka Formwork Pty Ltd.1
Adrian Hunter
26
The Doka contractual terms that caused its supplied formwork to be captured by the PPSA provided that the rental duration was as follows: “The duration of any rental period commences on the date which the ordered material leaves the Doka warehouse. Any rental period will end on the date the rented material is returned to the Doka warehouse. Any partial return and/or delivery of material shall be deducted pro-rata according to agreed rental rates” 2 Therefore, it was found that the Doka terms in the lease was for an indefinite period only ending when the formwork was returned to Doka.
The case In this case, Relux Commercial Pty Ltd (in liquidation), over which Mr Carrafa and his fellow partners were appointed as liquidators, operated a construction business specialising in pouring, laying and erecting large concrete slabs and panels. It rented formwork and associated equipment from Doka Formwork Pty Ltd from time to time. At the time of the appointment, being on 7 April 2014, there was over $1million of Doka supplied equipment in the possession of Relux. All the leased equipment supplied by Doka was delivered by Doka to Relux prior to 21 January 2014 except for two orders for equipment,
Any suppliers who desire to recover their goods supplied to a customer in the event that the customer doesn’t pay must protect their position by complying with all aspects of the PPSA.
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
PPS
which were delivered by Doka on 26 February 2014 and on or about 14 March 2014. On 20 February 2014, a security interest claimed by Doka in commercial property held by Relux (that was further described as ‘Equipment Rental and Sales especially in Formwork’) was registered on the Personal Property Securities Register (PPSR). Each lease was initiated by a written order from Relux describing the required equipment. The commencement date for each lease was the date the equipment left the Doka warehouse or when Relux took delivery of it and incorporated Doka’s General Terms & Conditions printed on the back of each invoice. This case however hinged upon the fact that the lease was for an indefinite term. That is, the lease agreement had not specified an end date. It may be presumed that Relux was unsure of how long it would need the formwork and so therefore the contract was ‘open ended’ As a result of the leases being for an ‘indefinite term’ they fell within the definition of being a PPS Lease3 for the purposes of the PPSA. Upon being described as PPS Lease it is a requirement to have any security interest associated with it registered on the PPSR. Accordingly, the ‘registration time’ for the security interest had to be the later of: a) 6 months before the critical time; or b) the earlier of 20 business days after the security agreement that gave rise to the security interest came into force, or the critical time. Whilst the registration of Doka was within 6 months of the ‘critical time’, being the date of the appointment of the Voluntary Administrators/Liquidators, it was the second limb of this section that caused Doka trouble. Section 588FL of the Corporations Act 2001 (Cth) provides that if security interest granted by a company is unperfected (e.g. not registered) at the critical time, it may vest in the company that is being wound up or in administration under section 267 or 267A of the PPSA
The Finding The Judge in this case held that by reason of section 588FL(4)(a) of the Act, Doka’s PPSA security interests in the equipment supplied under leases commencing before 21 January 2014 vested in Relux because they were not perfected by registration within 20 business days, (i.e. by 19 February 2014) of the relevant agreement. Unfortunately for Relux it lodged its registration on 20 February 2014. In the reasoning provided by the judge in this case, it was stated that: “This can lead to seemingly draconian outcomes, particularly where the property is valuable such as in this case where the Formwork Equipment was valued at over a million dollars. The impact of these provisions is compounded by the broad scope
“…in order to avoid these consequences, security interest holders can simply ensure they register their interests as soon as possible after they are granted” of the PPSA and the large number of interests covered by it. Despite these consequences, as noted in the Explanatory Memorandum, these provisions are needed ‘to prevent security interests being granted fraudulently with knowledge of an imminent administration, liquidation or deed of company arrangement’. Moreover, in order to avoid these consequences, security interest holders can simply ensure they register their interests as soon as possible after they are granted.” 4 It was not all bad news for Doka though as it was able to recover its equipment that related to the lease agreements commencing 26 February 2014 and 14 March 2014 as these supplies were made after registration had taken place.
The lessons for all Those suppliers that fail to take heed of the tough lesson learned by Doka in this case will continue to suffer in a security interest dispute with an insolvency practitioner. Any suppliers who desire to recover their goods supplied to a customer in the event that the customer doesn’t pay must protect their position by complying with all aspects of the PPSA. Liquidators and their solicitors are becoming increasingly well versed in the operation of this area of law and continue to defeat suppliers that chose (out of ignorance or otherwise) to continue to ignore the implications of not registering on the PPSR. u FOOTNOTES: 1
Carrafa, Gountzos & Lofthouse (as liquidators of Relux Commercial Pty Ltd (in liq)) & Anor v Doka Formwork Pty Ltd [2014] VSC 570 (14 November 2014)
2
As above at [25]
3
Section 13 of the Personal Property Securities Act 2009
4
Carrafa, Gountzos & Lofthouse (as liquidators of Relux Commercial Pty Ltd (in liq)) & Anor v Doka Formwork Pty Ltd [2014] VSC 570 (14 November 2014) at [60]
*Adrian Hunter has presented nationally on the PPSA, is an Official Liquidator and a Director with the restructuring and insolvency firm Brooke Bird. Ph: (03) 9882 6666 www.brookebird.com.au
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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PPS
Practical Advice
on what to do to recover goods sold when your customer enters into an Insolvency event By Kim Powell* The first days of insolvency are often confusing but if you have a retention of title clause in your terms of trade, now is the time to lawfully get your goods back. Provided you have registered your interest correctly on the PPSR you are now are a secured creditor over your property and its proceeds. This means Kim Powell you have: zz Rights to possession of goods held by your customer zz Rights to proceeds zz Rights to remove accessions zz Rights in the manufactured or commingled goods
Day one actions zz Reconcile your property to your PPSR registrations zz Make copies of all relevant sales documents, including your signed terms and conditions zz Send a letter to the Receivers/Liquidators/Voluntary Administrators (Insolvency Practitioner) immediately providing:
Provided you have registered your interest correctly on the PPSR you are now are a secured creditor over your property and its proceeds. 28
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
zz A copy of your financing statement/verification statement evidencing your registration on the PPSR zz Copies of your sales documents zz The identify/description of your property zz The last known location of your property (where delivered) zz A demand to: {{ Access the premises to identify and count your stock (ROT claim), then for the for the immediate return of your property {{ Access to identify and quantify any of your products that may have become accessions or commingled or part of finished products of the company (if applicable) {{ Access to the company’s debtors ledger and bank accounts in order to determine and identify if you have any claims on the proceeds (if applicable) zz A request for the Insolvency Practitioner to acknowledge your interest in your property and the validity of your PPSR registration. zz Send a representative as soon as possible to the company to do the count {{ Take photographs {{ Agree the count with the insolvency practitioner We are not lawyers, this is not legal advice. You may need the support of an expert or lawyer if the insolvency practitioner does not treat you as a secured creditor or dismisses your claim for no valid reason. u
*Kim Powell is co-founder of EDX, a national firm specialising in PPS registration and consulting. EDX has its roots in New Zealand where similar legislation was enacted in 2002. In his earlier career, Kim has been an insolvency practitioner, headed the commercial credit recovery division of a major bank, as well as a period as a business banker advancing funds on a secured basis. This background made the PPSA a natural area of interest. Kim moved to Australia in 2010 to lead EDX’s entry in to the local market and is based in Melbourne Contact Kim: kim.powell@edxppsr.com.au or phone 0410 475 100.
PPS
PPSR registration: defects can be costly X-Rated Error By Nathan Deppeler*
The lesson is to take care with all registrations, particularly those that require an exact match to an easily identifiable serial number...
Nathan Deppeler
The introduction of the Personal Properties Securities Act (PPSA) should not be news to readers. However, the fundamental shift in protection and the fallouts of ineffective registration is still making waves, particularly in the event of an insolvency of the grantor. The PPSA, and its accompanying Personal Property Securities Register (PPSR) has not only increased the search fees dramatically (while we don’t necessarily say there is a conspiracy theory here, we would note that someone is making a lot of money out of all of this), but the attention to detail that now must be applied by parties seeking to secure their interest has also dramatically increased. Recently, we conducted a PPSR search for a motor vehicle and found an error in the VIN number used to identify the vehicle. In this instance someone misplaced an “H” with an “X” in the VIN number. We can’t comment on what this person was doing at the time of registration to account for this error, but the ramifications of this simple mistake were severe. In summary: zz Collateral must be described by serial number (Section 153(1) of the PPSA). zz There is a defect in the registration if collateral must be described by serial number and the search of the serial number is unable to identify the registration (section 165(a) of the PPSA). zz Motor vehicles must be described by serial number (Paragraph 2.2 of
Schedule 1 of the Regulations). zz A serial number includes the VIN, the chassis number or the manufacturer’s number (Paragraph 2.2(3) of Schedule 1 of the Regulations). zz Registration is ineffective if there is a defect pursuant to Section 165 (Section 164(1)(b) of the PPSA). zz The vehicle vests in the grantor immediately before a resolution for the winding up of a company if the security interest is unperfected (Section 267(2) of the PPSA). Accordingly, as there was a misplaced “X” instead of a “H” in the VIN registration, it was our view that the vehicle registration was unperfected and therefore ineffective. Under section 267 of the PPSA, the vehicle vests in the liquidator. This meant we sold the vehicle free of any security interest and kept the proceeds of just over $32,500. Not an easy loss to take as the party granting finance, over a simple typo. Interestingly, this was not a small player in the finance market, which just goes to show these types of simple errors can happen to anybody. The lesson is to take care with all registrations, particularly those that require an exact match to an easily identifiable serial number like a vehicle VIN. After all, while X often marks the spot it doesn’t necessarily result in any treasure in the case of a defective PPSR registration. u *Nathan Deppeler is a Partner at Worrells Western Victoria.
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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aicm Can We Help? AICM receives questions from Credit Managers that it puts to a panel of lawyer 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.
PPSA Registration Costs
zz ICT personnel dedicated specifically to PPSR operations zz a number of ICT personnel who dedicate a portion of their time to the PPSR
Question
zz PPSR ICT infrastructure operating costs and
How does AFSA set the fees for PPSA registrations and
zz amortisation of software developed or purchased
searches? I heard some peers talking at an AICM network meeting that they will be reducing the cost in FY16. Is this correct?
specifically to operate the PPSR. In addition to ICT, costs are attributed for support staff from the National Service Centre, as well as PPSR-
– National Credit Manager Sydney MICM CCE
related administration such as the PPS Registrar, legal and communications. Indirect costs such as finance and human resource management are allocated using a cost-driver
AICM response Your question is a good one and it is correct that a price
appropriate to the given function. The price for each activity is assessed on the utilisation of the
change has been proposed to the Attorney-General for
allocated resources and attributed on the basis of the level of
approval and to take affect from 1 July 2015.
resources required to deliver on the forecast volume.”
AFSA (Australian Financial Security Authority) who administers the PPSR charge fees for many transactions
The proposed revised charges are also detailed in the document including:
this authority is provided under Section 190 of the Personal
Current Fees
Proposed Fees
Register a Financing Statement for a not stated end time
$140.00
$119.00
Register a Financing Statement where the duration is 7 years or less
$8.00
$6.80
Register a Financing Statement where the duration is more than 7 years but less than or equal to 25 years
$40.00
$34.00
Discharge Financing Statement
$0.00
$0.00
Minor amendment to Financing Statement or a change of free text description of collateral (where change of details does not impact on end date, result in additional grantor)
$4.00
$3.40
Properties Securities Act 2009 (PPS Act). Further it is the Australian Government’s policy that the costs of the PPSR operation be cost recovered. A document is available from: http://www.ppsr.gov.au/AbouttheRegister/AboutFees/ Pages/CostRecoveryImpactStatement.aspx which further explains the basis for the various charges and notes that “The fees that have been charged since the implementation of the PPSR on 30 January 2012 have included a repayment to the Government for the initial investment in the register. The final repayment will be made in the 2014-15 financial year. AFSA is seeking to reduce the fees charged in line with the cessation of the repayment. All fees for activities, except to Develop a special purpose report for Account Holders (see Annex A Ref No. 8.1), have been reduced by 15%.” “The charges imposed for registrations and searches are designed to cover the costs of operating and maintaining the PPSR. The PPSR is available online on a 24/7 basis with personal assistance available through the National Service Centre. In determining the price for each activity, AFSA seeks
AFSA publishes all relevant charges, along with current and
to equitably allocate the PPSR’s operating costs. The majority
previous CRISs on the ‘cost recovery’ page on its website at the
of expenditure attributable to operating the register relates
following address:
to information and communication technology (ICT) which
http://www.ppsr.gov.au/AbouttheRegister/AboutFees/Pages/
is primarily composed of:
CostRecoveryImpactStatement.aspx
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CREDIT MANAGEMENT IN AUSTRALIA • May 2015
aicm Training News Why choose AICM to complete your lifelong learning journey in credit? The AICM is an industry body focused on the development of the individuals and the broader credit industry. This means all we do is Credit. We are able to draw on the expertise of our 2,400 individual members working in over 1,300 companies and other peek industry bodies such as ARITA (Australian Restructuring, Insolvency & Turnaround Association), ARCA (Australian Retail Credit Association), DIFA (Debtor & Finance Association, and IMA (Institute of Mercantile Agents Ltd).
AICM Learning Services prides itself on the quality of its teaching standards. Our facilitators are highly qualified educators and industry experts who can relate to the practical requirements of the workplace.
WHAT WOULD YOU LIKE TO ACHIEVE? l Obtaining a qualification The AICM offers 3 Qualifications, which include subjects for those new to the credit industry through to those at a managerial level.
l Meet a pressing training need
No other provider has access to this level of Credit Industry knowledge and expertise No other provider is solely focused on meeting the needs of the Credit Industry This means that the AICM is uniquely positioned with access to the industry experts that enable us to develop and deliver training that is highly relevant, current and of highest quality. AICM is also a registered training provider with AQF and NRT, AICM Learning Services prides itself on the quality of its teaching standards.
All of the modules of the qualifications can be taken individually without commitment to the full qualification. These units will count towards the completion of the full qualification subject to the currency of those units. Note: Our qualifications and individual modules are primarily delivered via an interactive online learning environment with all assessments conducted by assessors with significant industry experience who are also available to guide your learning. Some modules are available via face-to-face classes, subject to availability.
l Recognise prior learning (RPL) If you have studied Credit Management previously or overseas you may be able to obtain recognition of that prior learning. The National requirements to obtain RPL are subject to evidence criteria and time limits to ensure currency. The AICM can work with you to select the best approach for your circumstances. You may also be able to enrol for assessment only relying on your prior learning and current knowledge. This may help you to obtain the qualification at a reduced cost.
l Bespoke and in-house training Our training experts can work with you design training to meet your company’s needs. We are able to help identify training needs and to then develop and facilitate a targeted in-house training program to achieve the organisation’s identified outcomes. As AICM Learning Services is a Registered Training Organisation (RTO), we are able to offer National accreditation for the training undertaken. This provides motivation to the participants and is a valuable pathway for further learning and qualifications. In-house training is usually cost effective for classes of 8 or more and can be for a full qualification or individual modules.
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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aicm Training News Legal
WHAT DO YOU WANT TO LEARN? l Debt Collection and Loss Recoveries
l Credit Management
If you are heavily involved in the enforcement of payment obligations the FNS30410 Certificate III in Mercantile Agents is designed to address the skill and knowledge required for this challenging and complex area of the Credit Industry. It is specifically of interest to those working in the mercantile industry, regularly contracting with mercantile agents or working in a Loss Recoveries role within a Credit Provider. The qualification is made up of units that cover: –– Collecting Debts –– Resolving Disputes –– Initiating legal recovery –– Locating, Serving and Repossessing –– Reporting to clients –– Managing compliance –– Financial record keeping –– Preparing Financial Reports –– Working in the financial services industry
We offer 2 qualifications focused on the Credit Management Profession. The Cert IV provides focuses on the core skills and knowledge and is ideal for those new to the profession or wanting to update or certify their knowledge. The Diploma is the next step towards advancing your career in Credit. There are no prerequisite entry requirements and is ideal for those wanting to further their career and/or already hold supervisory or management positions.
FNS40111 Certificate IV in Credit Management The Certificate IV in Credit Management is specifically designed to address the skill and knowledge development needs of credit professionals. The qualification is made up of units that cover: –– Assessing Credit Applications –– The role of securities in Credit –– Legal Compliance –– Bad and doubtful debt
Summary of the Qualifications Qualification
Summary
Suites Roles such as
FNS30410 Certificate III in Mercantile Agents
Addresses all aspects of enforcing payment obligations and obligations of mercantile agent and debt collection activities
zz zz zz zz zz
Mercantile Agent Accounts Receivable Clerk/Officer Collections Officer Customer Service Officer Loss Recovery Clerk/Officer.
FNS40111 Certificate IV in Credit Management
Addresses issues relating to credit applications and securitisation, compliance, managing bad and doubtful debt and customer service.
zz zz zz zz zz zz zz zz
Credit Officer Credit Controller Credit Analyst Recoveries Officer Reconciliations Officer Credit Services Officer Credit/Lending Officer Credit Team Leader
FNS51511 Diploma of Credit Management
Provides the opportunity to deal with key credit issues such as personal and corporate insolvency, developing credit policies and compliance. Electives include consumer credit, factoring and discounting, managing customer service, managing individuals and managing change.
zz zz zz zz zz zz zz zz zz zz zz
Credit Manager Senior Credit Officer Senior Decision Manager Debt Manager Credit Executive Credit Analyst Credit Operations Manager Senior Credit/Loans Officer Chief Credit Officer Group Credit Manager Credit Risk Manager
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CREDIT MANAGEMENT IN AUSTRALIA • December AUSTRALIA • May 2015 2014
aicm Training News –– –– –– –– ––
Legal Recovery of debt Collection Skills Consumer Credit Manage a trust account Dealing with customers
Legal
business that provide factoring and/or invoice discounting arrangement. This course is also beneficial to businesses that may intend to undertake such arrangements.
FNS51511 Diploma of Credit Management The Diploma of Credit Management is specifically designed to address the skill and knowledge development needs of credit professionals who hold or are intending to seek a supervisory or management position and covers the broad role of credit management. The qualification is made up of units that cover: –– Developing Credit Policy and Procedures –– Legal Compliance –– Personal Insolvency –– Corporate Insolvency –– Manage the credit function –– Understanding consumer credit (elective) –– Managing outsourced services (elective) –– Dealing with compliance breaches (elective) –– Managing a trust account (elective) –– Managing people (elective) –– Managing change (elective) –– Managing customer service (elective) –– Factoring and discounting (elective)
FACE TO FACE TRAINING SAVE THESE DATES IN 2015 TO CONTINUE YOUR LIFELONG LEARNING JOURNEY.
AICM are proud to deliver this unit in calibration with DIFA
Melbourne 6th & 7th May Manage factoring and invoice discounting arrangements Brisbane 15th July Manage overdue customer accounts 18th & 19th August Manage factoring and invoice discounting arrangements Sydney 21st & 22nd May Manage factoring and invoice discounting arrangements 18th June Manage overdue customer accounts 13th & 14th August Manage factoring and invoice discounting arrangements Please contact debby@aicm.com.au to register your interest in a unit to be delivered face to face.
l Manage bad and doubtful debts Build the skills of your credit team. This unit is beneficial to loans officers, collections and credit officers and credit team leaders. This course ensures candidates have the understanding and skills of best practice in the area of debt collection.
l Manage overdue customer accounts Credit is more available today than ever before with a variety of purposes and accessible from a range of organisations. This can be a personal or business loan from a bank, a home loan from a credit union, purchase and cash advanced on a credit card from credit card companies, or a car and/or other loans from specialist loan agencies. Also there is the important dimension to business credit also known as trade &/or commercial credit.
l Factoring and invoice discounting There has been substantial growth in the use of factoring and/or invoice discounting arrangements over the past few years. This course is relevant to people in all areas of
IN-HOUSE TRAINING: It has been a busy 2nd quarter delivering customised in-house training to the following organisations: –– National Australia Bank –– Baiada Poultry –– Bibby Financial –– Victoria Electricity
RECENT GRADUATES: –– –– –– –– –– ––
Tom Azzopardi Peter Binks Clara Malizia Anna Golubeva Jennifer Guo Jessica Ho
December May 2014 • CREDIT 2015 • CREDIT MANAGEMENT IN AUSTRALIA
33
AROUND THE STATES
New South Wales
Stephen Vaughan of KPMG.
Col Magee.
President’s Report Hello to all of our members. It only seems like yesterday that I was doing February’s report. Time flies when we are having fun. I would firstly like to thank our National Partners, Veda, Dun and Bradstreet and Austral Mercantile as well as our Divisional Partners Ampac, Randstad, OnGuard, Results Legal and National Credit Management Limited for their ongoing support. We have had a few events over the last couple of months, which have been very well attended by our members. A separate report is below on these. We are now only a few weeks away from the highly anticipated Women in Credit (WICN) luncheon and this is an event not to be missed. Get your registrations in as soon as possible so you don’t miss out. We also have the very popular Youth Networking Trivia Night at The Windsor Hotel in Sydney on 21 May. This is a great lead in to our big YCP events of which we have further details below. Be on the lookout for details on the NSW/National Golf Day being held on the Tuesday preceding the conference at Oatlands Golf Course. Most of the sponsorships have now been sold with only two remaining. If you are interested in this please contact me directly. We are also having a harbour cruise on the same day/ evening - what a beautiful way to start off the conference with a cruise of undoubtedly the best harbour on the planet! I am also happy to welcome seven new NSW CCE’s who sat the exam in September 2014 and have completed the Essay component. We also had 11 NSW candidates pass the exam in March. The next exam will be in September 2015 and I urge all members to ensure they have met the criteria required to sit the exam and join the elite of the Credit Management profession.
February Networking Night – PPSA Workshop For the first Networking night of the year the NSW Division returned to the traditional home of Parramatta events, the Rydges Rosehill, to learn and update on the PPSA. With the world of Personal Property Securities developing quickly, the NSW Council enlisted the help of Malcolm Poslinsky of EDX to conduct a PPS workshop. Malcolm gave a very informative, practical and entertaining presentation, which was a benefit to those familiar with the PPS and to those who are developing their knowledge. The 30 plus attendees including National Credit Managers, Insolvency Professionals and Credit 34
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
Nick Pilavidis with vote of thanks to Malcolm Poslinsky.
Professionals at all levels continued the discussion following the presentation over drinks and canapés.
March Networking Night – Team Building Around Credit Issues On 10 March almost 50 people attended the first ever industry event to be held in KPMG’s brand new Parramatta offices. The KPMG offices are very modern and inviting with a great view over the parks and river. Amanda Logan-Halaj, Senior HR Business Partner at QBE Insurance, shared her experiences of working with large Finance and Credit Teams to give some practical insights into how to build a Great team. The Senior Managers, Divisional Partners through to budding YCP’s all got a lot out of the presentation which fuelled great discussions over a drink or two and a mountain of food. Thanks goes to Treacy Sheehan, who went the extra mile in organising this event including liaising between KPMG and several external caterers, Stephen Vaughan and Andrew MacFarlane of KPMG who were seen packing the dishwasher as the last guests departed and especially Amanda for a well prepared and informative presentation.
Women in Credit (WINC) The business world presents numerous challenges for Women and the Credit Industry is definitely no exception. AICM in conjunction with Veda are setting the stage in overcoming these challenges faced by women! The first “Women in Credit” Luncheon will feature a Panel of influential female leaders discussing how they have progressed in their careers and overcome challenges facing women in business with a focus on relating these to the issues faced by Women in credit. Date: Friday 15 May 2015 Time: 12.00 for 12.30pm commencement Venue: KPMG, 10 Shelley Street, Sydney Cost: $90 Members (Inc. GST), $110 Non-Member (incl. Gst) The WINC Luncheon will not only be a great opportunity (for Men and Women) to hear from these three inspiring women, but it will also provide the opportunity to network with leaders in the Credit and Business world. The “On the Couch” discussion will be chaired by Debbie Leo, General Manager, Major Accounts, Veda. Our Panel of
New South Wales AROUND THE STATES
Events Calendar
12 May
Women in Credit
Venue: KPMG Board Room, SOLD OUT 21 May
City Youth Network Night – Trivia VENUE: WINDSOR HOTEL
Presenter Amanda Logan-Halaj.
9 June
Parramatta Networking Night influential speakers: zz Holly Kramer - CEO Best and Less Click here for a bio zz Yolanda Vega - Chief Executive Aust Woman Chamber of Commerce & Industry (AWCCI) Click here for a bio zz Linda Murray – Executive Coach, mentor and facilitator of Athena Coaching. Click here for a bio You’ll also have the chance to win a lucky door prize, raffles and giveaways! This is an event not to be missed! Register today so you don’t miss out
Speaker: Michael Witt, Subject: Economic Update VENUE: RYDGES HOTEL, PARRAMATTA
16 July
YCPA Awards Night, VENUE: SOFITEL 11 August
City Networking Night Speaker: to be confirmed, Subject Forecasting Cash Flow 11 – 14 September
CCE Exam 20 September
City Networking Night – Wine tasting
YCP: What is in it for me?
VENUE: CITY VENUE
Under 30? Working in credit? Being involved in the Young Credit professional award will give you exposure to the wide industry of credit, increase your knowledge in credit, provide numerous networking opportunities, connect you with many professionals (young and old) whom you can draw experience from as well as provide personal development opportunities in interview techniques, presentation skills and improve your confidence. You might even find your next role! Over 30? Don’t just ignore this award! There may be a young ‘up and comer’ that you can provide guidance and mentor through the YCP program. Look at your team, who do you think could be the next big thing in credit. The YCP program is a great tool to promote your team and company to current and future employees. Don’t you want to say the 2015 Young Credit Professional works for you or your company? If you are interested in finding out more about the YCP, come along to the Youth Trivia Night being held 21 May 2015. Meet with some past YCP’s and hear first-hand the impact this award program can have.
8 October
City Youth Network Night – Barefoot Bowling VENUE: PADDINGTON
The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners
Divisional Partners
Welcome to new Professional Partner NSW welcome Ashurst as the first Professional Partner of the Division. Professional Partners are highly respected firms who partner with the AICM in the interest of collaborating on initiatives to address the challenges of the Credit Management Profession.
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.
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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AROUND THE STATES
Queensland
Group at CNN.
Pat Asange Presenting.
President’s report Here we are, the second quarter of 2015 already I have just completed my customer visits in Western Australia, if you are exposed to mining or marine it is going to be an interesting ride for the next 9 months. It is even more important to be armed with the knowledge and skills of managing credit; from assessing the initial risk of the credit application; day-to-day collection activity through to legal recovery. With this in mind, our 2015 calendar has been updated. The Queensland AICM team will be bringing you a variety of offerings to cover a range of skills. We have programmed a few credit toolbox sessions which cover the basics that any credit officer or controller should have. While we offer our standard half and full day training, we can also assist if you need a more tailored workplace solution or in-house training. I am excited about May 13th when we are holding our May Credit Network Night (CNN) at Customs House. I would urge you all to attend as we delve into the issues surrounding protecting data. There is a parking deal, make sure you get your ticket validated. Our CNN’s are a great opportunity to mix with other credit professionals. The Queensland AICM Facebook page is up and running, I invite you to like our page and visit or contribute. I look forward to seeing you at one of our events, come up and say hello.
Councillor Profile MELINDA GROB Melinda is a Senior Consultant at Randstad, one of the world’s largest Recruitment and HR Consulting organisations. Specialising in Accounting Support roles, over the last three years Melinda has taken a keen interest in the Credit industry and 36
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
February Breakfast speakers: Nick Combis and Karl Hill.
has created a footprint in the Queensland market as a specialist Recruiter in the Credit field. Melinda graduated from Griffith University in 2010 with a Bachelors Degree in Human Resources, and now sits on the AICM Committee as Membership Manager, also assisting with events as required. Melinda is a competitive beach volleyball player and a proud pack leader to two small dogs.
QLD February Event February’s breakfast event hosted by Vincents was a success! The feedback received from those who attended had nothing but great things to say about the topic (PPS Registrations – Is it Perfected?) and the speaker’s ability to present the content in a way we could all understand.
Queensland AROUND THE STATES
On the page will be upcoming events, photos from any network nights and breakfasts that the QLD AICM hold as well as photos from Conferences and YCPA awards nights. There will also be any information relevant to the credit industry. Remember this is a continual work in progress so we appreciate any feedback or ideas you may have. You can contact us by sending us a message directly through Facebook. Also keep in mind this is a monitored page where any content posted directly on the page will be checked before being published to ensure the safety and privacy of all members.
Peter Mills, Pat Asange, Clive Rix and Julie McNamara.
Facebook Launch
Events Calendar
13 May
CNN – Data Projection
The new QLD AICM Facebook page is now up and running! You can find us under: AICM Australian Institute of Credit Management – QLD. We decided that we needed to approach current members and the broader credit community in a new and exciting way. Considering most of us are practically attached to our phones it made sense to create a Facebook page that could connect with members much more easily.
Data Projection Speakers: Murray Walter and Peter Maloney, VENUE: CUSTOMS HOUSE 10 June
CNN – Re-enactment of Enforcement Hearing VENUE: TBA
8 July
CNN – Trivia Night, VENUE: TBA 22 July
AGM & YCP Awards, VENUE: TBA August
Annual Golf Day 19 August
Credit Tool Box – Leadership & Management Skills (Part 3 & 4) Part 3 and 4 each a Half Day Seminar, VENUE: TBA
The Australian Institute of Credit Management welcomes our Partners for 2015.
8 September
CNN – Identity Theft & Fraud Speaker: Fraud Squad Qld Police
National Partners
11 – 14 September
CCE Exam 16 September
Credit Tool Box – Insolvency Issues (Part 5) Divisional Partners
VENUE: TBA
October
CNN – People in Credit, Challenges & case study VENUE: TBA
14 - 16 October
National Conference – Sydney 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.
VENUE: SOFITEL WENTWORTH HOTEL - SYDNEY
November
End of Year Event, VENUE: TBA
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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South Australia
Events Calendar
7 May
Network Evening
Speakers: Past YCPA Winners
VENUE: PROOF, 9A ANSTER STREET, ADELAIDE
14 May
Credit Focus – Evening Session
Speakers: Josh Richards and Melanie Bird Subject: Mock Court Hearing VENUE: ADELAIDE MAGISTRATES COURT
5 June
Quiz Night, VENUE: TBA 11 June
Credit Focus – Liquidation Case Study VENUE: EDUCATION DEVELOPMENT CENTRE, HINDMARSH
9 July
Maris Rukas (BRI Ferrier) and Radek Tatowicz (NCI).
Credit Focus – The basics of credit Speaker: Trevor Goodwin Subject: Processes – Risk analysing customers
President’s Report
VENUE: EDUCATION DEVELOPMENT CENTRE, HINDMARSH
Easter has come and gone! Trust you all enjoyed the four-day break and took it easy with the chocolates! This time of the year certainly keeps us on our toes regarding short working weeks and staying on top of the workloads. We have been off to a flying start here in South Australia in 2015. Following on from the highly successful Credit Symposium in February, we had a very educational presentation on ‘10 things a Liquidator or Bankruptcy Trustee won’t tell you’. In this ever-changing profession that we work in, we are keen for any tips that are offered to enhance our credit knowledge. Strongly followed by ‘How and when to engage a Mercantile Agent’, this was aimed at the small to medium sized businesses. The attendees were well engaged with many questions and scenarios for the speakers to respond to. It was great to see some new faces who are keen to learn more about the AICM and the benefits of becoming a member. Our divisional Members Services chairperson will be kept busy with the interest shown in joining the AICM! We have decided to push the date out for the YCP Networking Evening to Thursday 7 May and it is being held at a venue which is new, funky and centrally located in the CBD. Recently Adelaide has taken a leaf from Melbourne’s book and has turned a couple of narrow lanes into hubs for city workers and dwellers to come and grab a bite to eat or have a quick drink after work. There are many quirky and different venues popping up giving the Functions Committee plenty to choose from. Exciting changes for Adelaide! Next on the agenda: Everyone loves a Mock Court session. Well, here it comes… The Credit Focus team are working with a strong ‘duet’ here in Adelaide who guarantee to keep your attention with this very popular educational evening. Check your calendar and emails for the flyer coming through soon.
August
Awards Dinner 2015, VENUE: TBA 13 August
Credit Focus – Trading trusts Subject: Credit approval, liability and recovery action VENUE: EDUCATION DEVELOPMENT CENTRE, HINDMARSH
10 September
Credit Focus – Bad debts and ways to avoid them Subject: Processes – Risk analysing customers VENUE: EDUCATION DEVELOPMENT CENTRE, HINDMARSH
11 – 14 September
CCE Exam 8 October
Credit Focus VENUE: EDUCATION DEVELOPMENT CENTRE, HINDMARSH
14 – 16 October
AICM 2015 National Conference VENUE: SOFITEL SYDNEY WENTWORTH
12 November
Credit Focus – PPSR and retention of title implications Speaker: TBA, Subject: Protecting your security interest VENUE: EDUCATION DEVELOPMENT CENTRE, HINDMARSH
4 December
Network evening and Christmas break up
38
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
South Australia
Credit Symposium.
In closing, I am going to take this moment to remind our valued National and Divisional Partnerships and sponsors that if you see there is an opportunity to work with us at any of the up and coming events please let myself or any committee member know. We value your ongoing support and would like to see/ hear from you more. Keep your ideas and input flowing as we appreciate your feedback and input into the SA Division events.
Ellis award for his contribution to the credit industry and the AICM in South Australia. During Trevor’s time as President the SA Division won the National President’s Trophy as the best performing State on five occasions. Trevor also presents at Professional Development and Credit Focus seminars. Outside of work Trevor enjoys time with his family and friends including becoming a grandfather last year, holidays, watching sport and gardening. Since becoming a member of the Institute Trevor has seen the AICM become a strong professional body for the credit industry. Trevor enjoys the company of the SA Institute members and Councillors. His goals are to help promote and grow the Institute, educate and train members and network/ socialise with fellow members with the same passion for the Institute and credit.
– Gail Crowder, SA Division President
Trevor Goodwin FICM, CCE, FIPA, F Fin SA Divisions Councillor Trevor has worked in Credit Insurance and Credit Management services for 19½ years at National Credit Insurance (Brokers) where he is Manager, Credit Services. Trevor and his Credit Services team provide credit management advice, support and information to customers throughout Australia, New Zealand and Asia. Prior to joining NCI Trevor previously worked with the former State Bank of South Australia for 20 years in areas including Corporate Banking, Treasury & International Finance, Audit and Retail Banking. It was here Trevor learnt his finance and credit skills while studying externally at night for nine years in Accountancy, Banking and Securities Finance. Trevor is a Fellow and Certified Credit Executive (CCE) of the AICM, Fellow of the Institute of Public Accountants and a Fellow of the Financial Services Institute of Australasia, and holds a Securities Investigation Agent licence. Trevor first became aware of the Australian Institute of Credit Management in 1996 and started attending ACIM Network and educational events. Encouraged by the then SA Division EO, Julie Short, Trevor became a Councillor in 1999. Trevor has served on various portfolios over the years and was State President for 7 years and also served two years as Vice President. Trevor is a Certified Credit Executive (CCE) and was the National Dux in 2003. In 2008 was awarded the Lawrie
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.
May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
39
AROUND THE STATES
Credit Symposium.
AROUND THE STATES
Victoria/Tasmania
WinningTeam – MarkThompson, VEDA presenting winners from Penfold Holden.
Golf Day: 2nd Place – Team Image Box 1.
Golf Day: Sponsor – NCS.
Golf Day: Nick Pilavidis and Lou Caldararo.
President’s Report
on the day and many stories of past year. were exchanged. Lyn will be remembered for all her work, her big smile and great ability to bring people together – we thank her family for allowing us to be a part of Lyn’s life!
It’s with a heavy heart that I start this report. Recently the Vic/Tas division lost a long serving member (ex-President and state councillor) Lyn Harris. She was a member for well over 25 years and a very active one without a doubt. Lyn joined council in early 1990 and remained until her illness became too overbearing. Her involvement was like everything Lyn did. Full on! She was chairperson on all except a few portfolios (from education through to in more recent time the function chairperson). We all remember the Christmas events, which were the envy of every other AICM division. It was not uncommon to see numbers in the hundreds, which were a direct result of her efforts. The state conference was also another event Lyn was involved with and like the Christmas function these were of such a high standard! During our lives we all come across people who we not only enjoy working with but who we respect – Lyn was one such person – someone this Institute owes more than words can express. Recently our division nominated her for life Membership which our Board had no hesitation in accepting. This award was to be presented to her following a recent visit to hospital. Unfortunately Lyn passed away a few days before the presentation was to be make at her son’s home. Her family requested the presentation be made at her funeral. This division’s Director (Jeff Hurst) made the presentation during the service and handed the certificate to her husband (Bill Harris). There were several members of the AICM present 40
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
RIP
New Councillors It gives me great pleasure to welcome two new councillors to the team. Sherif Hussein is the Credit Manager at REA Group and our new CCE chairperson. Stacey Feaver is the State Collection Manager for Austral Mercantile and our new Professional Development Chairperson. I am looking forward to working together and driving new and innovative ideas to keep our events and functions in Vic/Tas well attended. I would like to thank Suzanne Lucas for her contribution in managing the CCE portfolio. Suzanne has decided to take a sabbatical from Council with the view to coming back at a later stage. Wishing her all the best on her endeavours and look forward in getting back on council. Each year the AICM and Dun and Bradstreet seek to identify and honour the accomplishments of Young Credit Professionals around the country and to recognise their contributions to the industry as a whole. Dun and Bradstreet are proud to be the major sponsor of the AICM Young Credit Professional of the Year Awards Program. This award has been held in the highest regard within the credit profession as a symbol of excellence from which our future business leaders will be drawn. Therefore I encourage all Credit professionals under 30 years, as at 30 June 2015 to give it
Victoria/Tasmania
Golf Day: NAGA Award – Sharon, Rob and Anne from Trade Credit Risk.
State Winner and National Finalist of this prestigious program, Louie is on a mission to promote Young Credit Professionals and celebrate their achievements thus far in their early careers. His experience in 2010, whilst in the YCP program was nothing short of unbelievable. His credit profile rapidly expanded almost overnight which gave him a sense of a great presence in the industry due to being exposed to a plethora of the most senior credit managers in Australia. In short the YCP experience is something that he will never forget. As far as he is concerned, it was the most rewarding experience in his 14 years of credit. It is for this reason that he has a great passion to help mould the credit managers of the future. Get involved, become the next YCP. You will never look back!
Golf Day: Sponsors and Registrations.
a go. You can register your interest by following the links on the AICM home page. We welcome four new CCE’s who have completed their exam and essay. Congratulations and well done. CCE is an award recognising current knowledge and practice in the credit industry and is the AICM’s commitment to maintaining professional excellence in the field of credit management. I encourage all those members who are eligible enrol in the next online exam to be held in September, so you to can count yourself as part of the elite of the credit management profession. If you have any questions or concerns, please contact any of the councillors or the national office. I encourage all our members to attend our Network and social events and bring along a work colleague to share the experience. We have some great speakers lined up and it’s a great opportunity to meet industry peers and other credit professionals. The calendar of events can be downloaded from the AICM website and I look forward in meeting as many of our members and non-members at upcoming events. – Lou Caldararo, Vic/Tas State President
Introduction to Division YCP Chair Louie Tzakopoulos is the National Credit Manager at Wurth Australia Pty Ltd. Along with managing a team of 10 staff on a day-to-day basis, he has also had the pleasure of being a council member in the Vic/Tas team for the last two years as the YCP Chair. As a prior
Annual Golf Day – 20 February 2015 The rapidly becoming “must attend” event on the VIC/TAS Annual Calendar is the Annual Golf Day, with the whole event again selling out in record time. The weather was perfect for the Best Call Ambrose Competition that kicked off 11:00am at Southern Golf Club in Keysborough, with practice at the driving range followed by a fabulous Barbeque Lunch, with the most amazing Steak and Sausages supplied by Centreway Steak House in Keilor. A shotgun start had the players away at 12:30pm, finishing with a dinner and presentation. We’d like to extend a huge thank you to all of our Event Sponsors; Veda, Trade Bureaux Australia, Brooke Bird, Scalzo Foods, Southern Golf Club, Imagebox Group, Cor Cordis, KHB Solutions, National Collection Services, Creditor Watch, Penfold Holden, Lindt, Aust Recoveries & Collections, ARL, QBE Insurance, Dunn & Bradstreet, Melbourne Parkview Hotel, Kemps Peterson, Mercantile CPA, Randstad, Euler, Mills Oakley Lawyers, Sheppard Industries Australia for the fabulous Avanti Bike, Fisher and Paykel and Australian Paper, without whom we could not hold the event. We also raised $1,800.00, which was shared between the Tori Johnson Memorial Fund (Lindt) – Beyond Blue and Austral – Cancer Kids Project. There were prizes galore in the business card draw; more than 20 in total. Alan Gwynne, Bruce Cunningham, Ron Barnes, and John Hedger from the Penfold Holden Team took out the day with a score of 57.75. David Asker, Travis Marshall, Syd Gust and Matthew Hines from Team Image Box 1 took out second place with 59 C/B, and third place was taken out by Team Image Box 2 consisting of Troy Cavanagh, Shane Logan, Jeff Parker, and Brent Davey May 2015 • CREDIT MANAGEMENT IN AUSTRALIA
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AROUND THE STATES
Golf Day: 3rd Place – Team Image Box 2.
AROUND THE STATES
Victoria/Tasmania
Half Day: Credit 101 – Members and guests engaged with Nick Mann.
Recoveries Corp Team (Event Sponsor).
Winning team – President Lou Caldararo and Committee Member Louie Tzakopoulos with the winning team. Half Day: Credit 101 – Lou Caldararo Presents on Credit Applications.
with an equal score of 59. A huge thank you to Lou Caldararo from Spicers (President) and Charles Tims from Tuftmaster (Vice President) for organising another fabulous and successful golf day. It gets better every year. If you missed out this year please express your interest to Charles Tims as soon as possible as 2016 is almost sold out.
Half-Day Seminar – 101 of Credit for New Credit Managers and Supervisors
Half Day: Credit 101 – Frank Gambera Presents on The Legal System in Victoria.
A popular event for the first half-day seminar of 2015: Lou Caldararo, our VIC/TAS President provided an example of a welldeveloped credit application, Nick Mann of Cor Cordis delivered on Insolvency and understanding Financial Statements. Frank Gambera of McMahon Fearnley Lawyers delivered an overview of the court systems in Victoria, and Andrew McLellan of EDX provided a lively and informative presentation on the basics of the PPSR and how to perfect your PPSR registrations. Being well attended there was an excellent atmosphere in the room, and the hot topic of the moment still being the PPSR, saw Andrew McLellan fielding many and varied questions about the process, legal ramifications and perfecting claims.
YCPA Event – Ten Pin Bowling
Half Day: Credit 101 – Andrew McLellan of EDX Presents on PPSR. 42
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
What a fabulous youth social night this was! Great company, great food, and excellent team atmosphere when we ten pin bowled at King Pin Crown Casino in March this year. Praise to Louie Tzakopoulos for organising such a fantastic event, and very big thank you to Recoveries Corporation for supporting the event. Without our event supporters we couldn’t hold these events. Top Score for the night was Abhijeet Waghmode Recoveries Corporation. The team that took out the team title
Victoria/Tasmania
consisted of Tania De Petra (Kings Transport Services), Ben Thomas (Kings Transport Services), Ben Grimm (Randstad), Prashant Mathur (Recoveries Corporation), and Alex Butler (Recoveries Corporation). Don’t miss out when we have our next fun filled Youth Social Event.
Suggestion Box
AROUND THE STATES
Hayley Mills, Colette Scully, Tania De Petra and Melva Tran.
Transurban Staff.
Events Calendar
MELBOURNE NETWORK EVENTS
As a Credit Professional if there is a topic that we have not recently covered that you would like covered or a social event you would like us to try please email dsmith@relrec.com.au and we will raise it at the next committee meeting for consideration.
(1 CCE Point for each Network Evening)
21 May 2015
PPSA made easy for Credit Managers (Breakfast Session) Speaker: Lionel Meehan, Partner at Ashurst Lawyers 18 June 2015
Welcome to new Professional Partner VIC/TAS welcome Ashurst as the first Professional Partner of the Division. Professional Partners are highly respected firms who partner with the AICM in the interest of collaborating on initiatives to address the challenges of the Credit Management Profession.
How to make good staff better
Speaker: Glenda Linscott, Director Performance with Confidence Caption 20 August 2015
What defines a good Leader? (Breakfast Session) Jason McCutcheon, Proprietor Biscom 19 November 2015, ABC of financials
YOUTH NETWORKING 17 September 2015, Trivia Night The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners
HALF DAY SEMINARS (3 CCE points for each Seminar) 10 August 2015, See you in Court! Speaker: Tracey Rothwell – Rothwell Lawyers
CCE EVENTS (1 CCE Point for each CCE event) 10 June 2015: CCE Breakfast (7.15am – 9.00am) 26 November 2015: CCE Breakfast (7.15am – 9.00am) Divisional Partners
CCE EXAMS 11 – 14 September 2015
DINNERS & FUNCTIONS 8 July 2015: YCPA Dinner 14 – 16 October 2015:
AICM National Conference 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.
VENUE: SOFITEL SYDNEY WENTWORTH
4 December 2015
Christmas Party River Cruise (Subject to numbers)
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Western Australia/Northern Territory President’s Report After a relatively slow start to our 2015 year, things are starting to heat up. Our March toolbox training session and the first of our breakfast series were well attended and positioned us for the upcoming events ahead. The main highlights being our May Twilight Congress and the July Gala dinner. I will talk about the Gala dinner, incorporating the Young Credit Professional Awards in my next report so for now I would like to stay with the May Congress and perhaps a pretty good reason to attend. Re-connection: I have found that one of the best reasons to attend a Congress or (mini conference) is that it is a way to reconnect with old friends and to make new connections at the same time. Our May Congress is designed to bring together a diverse range of people who for one reason or another are somehow connected through the Credit Management profession. It will be a great way get to know one another and maybe even learn a thing or two? If you are in the early days of your credit management career it will be an excellent way to start networking, develop some mentors and gain that all important experience. The events team have deliberately organised an outstanding array of guest speakers and this combined with a few surprises will be, I’m sure, a very memorable occasion. Please do your best to be there! – Colin Phillis – AICM WA President
Events Calendar
20 May
Twilight Seminar – ‘Emerging Trends in Credit Management’ VENUE: TBA
12 June
AICM Breakfast Club, Time: 7.15 am VENUE: MATILDA BAY NEDLANDS
8 July
PD Event – Risk Management, Half day seminar VENUE: TBA
16 July
Annual Awards and Gala Dinner VENUE: TBA
12 August
AICM Breakfast Club, Time: 7.15 am VENUE: MATILDA BAY NEDLANDS
11 - 14 September
CCE Online Exam 17 September
Networking Credit Speed Date and quick chat speakers
The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners
The Membership Team In my travels in the Credit space promoting AICM membership, people ask me what does it take to be a Good Credit Controller?
Divisional Partners
What makes a Credit Controller: The Ability to be Firm but Fair, Investigator, Intuitive, Hound with a Bone, Communicator, Negotiator, Problem Solver, Success driven Show me the Money, Maintain good working relationships with BDM’s and Clients, Accounting skills, Reconciliation, Manage the debtor’s ledger. If you have these skills and abilities you should join the AICM. If you haven’t, then you should join the AICM and take advantage of the Networking and Learning Seminars. For any manager looking for a credit person: When you find a good one, hold on tight and PAY THEM WELL – they are worth their weight in gold plus! – Warren Myers MICM, Membership Chair, Western Australian Division 44
CREDIT MANAGEMENT IN AUSTRALIA • May 2015
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.
New Members The Institute welcomes the following credit professionals who were recently admitted to membership in February and March 2015.
QUEENSLAND
SOUTH AUSTRALIA
Belinda Main
Australian Graphic Supplies Pty Ltd
Joanna Alexis
Lynch Meyer Lawyers
Marilyn Parker
NSW Business Chamber
Patrick Aquino
National Credit Insurance
(Brokers) Pty Ltd
Irene Baird
Bendigo & Adelaide Bank Ltd
Jayne Gurney
Bendigo & Adelaide Bank Ltd
Corey Hollitt
Bendigo & Adelaide Bank Ltd
Romeo Iuliano
National Credit Insurance
(Brokers) Pty Ltd
Georgia McClements
National Credit Insurance
(Brokers) Pty Ltd
Loren Mesecke
Bendigo & Adelaide Bank Ltd
Stephen Pearce
Bendigo & Adelaide Bank Ltd
Lynette Pitts
SA Health
Karyn Pokarier
Bendigo & Adelaide Bank Ltd
Renato Principe
Bendigo & Adelaide Bank Ltd
Maria Scacchitti
AMA Collection Services Pty Ltd
Quentin Yip
NCI Commercial Collections
NEW SOUTH WALES Amelita Alfonso
JLG Industries (Australia)
Analia Baez
Vinidex
Peter Binks
Crystal Bay Capital Pty Ltd
Terence Costa
Electrolux Home Products Pty Ltd
Lee Doel
Southern Steel Group Pty Ltd
Helen Fenech
Architectural Window Systems Pty Ltd
Juan Gonzalez
Ricoh Finance
Rachel Jones
RJE Pty Ltd
Michael Jordon
Avnet Technology Solutions
(Aust) Limited
Rhiannon Kearns
Architectural Window Systems Pty Ltd
Christopher Lagana
Ricoh Finance
Lee McGeown
Vitaco Health Australia Pty Ltd
Maria Pacheco
MSS Security Pty Ltd
Carol Sahani
Pentair Ltd
WESTERN AUSTRALIA
Shama Shah
Fletcher Building Ltd
Martin Bigg
Capricorn Society Ltd
Susan Tarabay
Salmat Ltd
Kerry Summerfield
4Farmers Australia Pty Ltd
Henrik Valentin
NCI Surety and Finance Pty Ltd
VICTORIA/TASMANIA Kate Baker
Urbis Pty Ltd
Ebony Bartlett
Mars Petcare Wodonga
Matthew Blick
Urbis Pty Ltd
Andra Brown
Kings Transport & Logistics
Kristen Dalakouras
Kings Transport & Logistics
Tim Faulkner
Officeworks Ltd
Lu Han
Kings Transport & Logistics
Tamara Henriques
Kings Transport & Logistics
Judy Heseltine
AE Atherton & Sons Pty Ltd
Hayley Mills
Kings Transport & Logistics
Jordana Nirens
Kings Transport & Logistics
Michael O’Keefe
Realestate.com.au Pty Ltd
Kerri Olinowski
Fuchs Lubricants (Australasia) Pty Ltd
Rebecca Quinton
JHK Legal Australia Pty Ltd
Carlie Straker
Kings Transport & Logistics
Valerie Teo
JHK Legal Australia Pty Ltd
Melva Tran
Kings Transport & Logistics
Steven White
Scalzo Foods
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NEW MEMBERS