Credit Management in Australia - April 2017

Volume 24, No 4 May 2017

The Publication for Credit and Financial Professionals

IN AUSTRALIA

 New payment platform coming  Why do people look for jobs so discreetly  Sales vs credit  Making the most of credit bureaux plus much more…

Women driving the future of credit management

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Volume 24, Number 4 – May 2017

6

Message from the President

AICM history

8

Women driving the future of credit management

43 NSW Division: Sam Pearlman of Curwoods welcomes attendees to the Tough Collections breakfast presentation.

By Ali Cain

Leadership and High Performance

10

Why do people look for jobs so discreetly

By Geoff Balmer

How marshmallows can overcome workplace distractions

12

By Petris Lapis

46 Qld Division: Michael Peet presenting.

Credit Management

14

Sales vs credit

By Kevin Artlett

Welcome to our new National Sponsor Bureau Van Dijk

16

Making the most of trade credit bureaux

18

By Ali Cain

New payments platform heralds a new era for efficiencies

Insolvency

20

22

What is the link between financial literacy and bankruptcy?

48 SA Division: Half day seminar attendees.

By Gregory Mowle

26

Insolvency Law Reform

By Nick Combis

PPS

30

Change to meaning of PPS lease

By Peter Mills

Software & Technology

50 Vic/Tas Division: Networking at the VICTAS WINC 2017

32

Cash Allocation and Credit Management – A view from an Outsider

By Chris Moakes

12

10 Geoff Balmer

Petris Lapis

14 Kevin Artlett

22 Gergory Mowle

54 WA/NT Division: WA State President Lisa Marr with speaker Alan Langford.

Economy DIRECTORS Australian President – James Neate MICM CCE Australian VP, Finance – Gregg Odlum MICM CCE Professional Development – Ben McCallum MICM YCPA & CCE – Trevor Goodwin MICM CCE Legal Affairs – Greg Young MICM CCE Member Services – Jeff Hurst FICM CCE CHIEF EXECUTIVE OFFICER

Twenty five is not the limit as long as insolvency risks are hedged

By Chris Doube

Small Business Risk update: Q1 2017

Can we Help?

Preference claim

EDITOR/PUBLISHER

AICM Training news

Deed of Guarantee and Indemnity

Student testimonials

Colin Magee NSW Stacey Woodward Qld Gail Crowder SA Lisa Marr WA Donna Smith Vic/Tas

Recent graduates and course dates

Around the States

Anthea Vandertouw | Ferncliff Productions Tel: 0408 290 440 | Email: ferncliff1@bigpond.com THE EDITOR reserves the right to alter or omit any article or advertisement submitted and requires idemnity from the advertisers and contributors against damages or liabilities that may arise from material published. CREDIT MANAGEMENT IN AUSTRALIA is published by the Australian Institute of Credit Management, Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065. The views expressed in CREDIT MANAGEMENT IN AUSTRALIA are not necessarily those of Australian Institute of Credit Management, which does not expect or invite any person to act or rely on any statement, opinion or advice contained herein (whether in the form of an advertisement or editorial) and neither the Institute or any of its employees, agents or contributors shall be liable for any opinion contained herein. © The Australian Institute of Credit Management, 2017.

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aicm

From the President

James Neate MICM CCE National President

A

t home, I am accused of being a “remote

heightened advocacy policy programme has seen the

control flicker”. I see nothing wrong

AICM make detailed and considered submissions across

with the need to check the 32 free to air

a number of areas of law reform. In the last 12 months for

stations, then 60 Foxtel channels and

example:

then have a quick look at the recent additions to Netflix,

zz Submissions to Department of Treasury and Finance in

before deciding which programme is best to watch. I

respect of the Enterprise Incentives Bill of 2017 related

admit, in that 45 minute journey, I sometimes forget my

to safe harbour defences for directors to avoid trading

preferred option or it is finished by the time I return, and

insolvent prosecutions. That legislation also dealt

that justifies the need to continue to search on a cyclical

with “ipso facto” clauses, those commercial contract

basis.

provisions which automatically crystallise or terminate

Where is this going you ask? One programme that does find favour with most of the family (there is no such thing as actual full family viewing!), is “The

a contract upon the appointment of insolvency administrators. zz Our submissions focused on the need for a balance of

Voice”. It reminds me that the AICM is “The Voice” of

commercial responsibility for directors and the need for

the Australian Credit Profession. Much of the Institute’s

rigour around who can be a “safe harbour insolvency

endeavours over many years have been the broad

adviser” by an appropriate supervision regime.

range of informal and Degree qualification training

zz Submissions to a Senate Enquiry into Superannuation

programmes. Over recent years there has also been a

Guarantee non-payment which also touched upon the

growing focus to position the AICM to be “The Voice”

obligations of directors to meet their responsibilities.

of the Credit Profession in legislative, structural and

This was viewed in a broader context from members’

commercial legal reforms. This strategy of increased

perspective given that the statutory obligation to meet

advocacy often goes unseen and is not necessarily

any charges would have a commercial consequence for

understood by all members.

creditors relying on the guarantees of directors.

While we are all very busy with our own daily work

zz There have been various formal submissions to the

challenges, members should understand that the Board

Commonwealth Attorney General in regards to the

and executive team at head office, are always looking

review and proposed amendments to the Personal

for opportunities to build the profile and standing of the

Property and Security Act. The AICM has long been

AICM as the national credit authority and to reinforce our

an active voice in respect of the PPS legislation and

credibility and commercial pragmatism by the submissions

importantly the practical operation of the Act. Our

we lodge. Our effort is to promote the interests of

recent submissions have focused on the proposed

our members and their employer organisations. This

changes in respect of PPS leases/hired goods.

6

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

From the President

aicm

The AICM and its members are indebted to former

which support the roles our members play within so many

Queensland Division President Peter Mills, Special

industries. In this work, the AICM is truly “The Voice” of our

Counsel of Thomson Geer Lawyers, who has prepared

broad profession.

and co-ordinated substantial, detailed, technical

There is also opportunity for you to be the voice of the

submissions. The credibility of the AICM in making such

AICM in your workplace with your team. It is the season

quality submissions is obviously enhanced.

for the Dun and Bradstreet Young Credit Professional of

zz As a representative of the AICM I sit on an ad hoc

the Year Award. One can have no greater influence than to

committee of ASIC related to the Insolvency Law

be a positive mentor to encourage someone to embrace

Reform Act and the practical consequences of

a career within credit. The benefits for your whole team

procedural regulations and how they will affect

in identifying and progressing juniors through the YCPA

creditors.

programme are tangible.

zz The clearest example of the industry clout and

A broader opportunity may exist for your whole team

credibility of the AICM now enjoys can be seen in the

if they are potential candidates for the Equifax Credit

invitation by the Australian Small Business and Family

Team of the Year Award. The criteria for all awards are well

Enterprise Ombudsman, for the AICM to co-convene a

promoted in links from this magazine newsletter and from

statutory enquiry into Payment Times and Practices.

our website.

In April the final report to the Minister for

The AICM volunteer State Councillors and National

Small Business recommended that the Australian

Board Directors together with our National head office

Government adopt a 15 day payment time, and that this

team are actively standing up to be your voice to promote

policy be extended to all levels of Governments and

the role and influence of credit and opportunities for our

contractors. Recommendations were also made that

members. Now is the time for all of us to stand in our

the Government and the ASX top 100 businesses, all

respective work places and be The Voice for the AICM by

publicly disclose their payments times, practices and

encouraging engagement.

measure their performances and that ultimately there

I look forward to hearing many songs of success!

be legislation setting out maximum payment times.

As always, if anybody has any queries or concerns about the AICM please feel free to contact me jneate@

While many of the written submissions and policy position

lynchmeyer.com.au

papers may be technical in nature, the important message is that the AICM is seen as credible by ASIC, Federal Treasury, ATO, AFSA and also Federal opposition legal

– James Neate MICM CCE

networks, all with a view to promoting policy initiatives

AICM National President

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

7

AICM History

Women driving the future of credit management

By Alexandra Cain*

PROFILE:

... it’s up to individuals to forge their own path. Women make excellent credit managers.

They have great attention to detail and can quickly spot potential problems.

8

Olive Mary ‘Dusty’ Rhodes

Faye Whiffin

was one of the first female leaders in credit management. She is an ongoing inspiration to everyone in the profession.

The only female in her year, she topped her class at the South Australian Institute of Technology.

Subsequently, she had the audacity to apply to be a member of the South Australian Institute of Credit Men. In 1964, after a constitutional and name change to the South Australian Institute of Credit Management, she was admitted.

Dusty was a passionate advocate for credit management, especially the need for practitioners to receive tertiary education.

She’s just one of the women who have helped shape credit management and the AICM. Here, we profile two female members who have continued in Dusty’s footsteps.

Faye Whiffin has had an illustrious career in credit management. She was the first female fellow in Queensland and was the state’s president between 1993 and 1996.

Whiffin says one of the biggest changes she has seen over time is the elevation of women from clerks to credit managers.

“Credit management is now recognised as a profession. But in the past it was seen as something anybody could do. We’ve achieved much more recognition over the years; which has come through the hard work of many people,” she says.

Whiffin says it’s up to individuals to forge their own path. “Women make excellent credit managers. They have great attention to detail and can quickly spot potential problems.

“But it’s up to credit managers to pursue ongoing professional development. There are many

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

AICM History

opportunities for training and anybody aspiring to be a credit manager should avail themselves of all that education.”

There’s no reason training has to be boring. For instance, Whiffin once organised a conference on a train.

“We secured all of the first class carriages as well as a conference car. We had a range of speakers, and travelled from Brisbane to Proserpine having sessions all the way. We had lunch in Proserpine, got back on the train, resumed the sessions and we threw in some interesting activities along the way,” she says.

For instance, one member dressed up as a drunk as an exercise to find out how calm credit managers really are. “He got an old raincoat and clothes from an op shop and poured fish oil all over them, so he stank. We managed to slip this guy off the train before we pulled into the station in Mackay. He was sitting on a bench at the station, drinking something in a brown paper bag and members saw him slip onto the train.

“People went ballistic trying to find him. When the conference re-started our guy staggered into the conference car. Everyone leapt out of their seats and just as the train lurched, the guy fell down clutching his bottle. People were screaming – then he got up and took off his disguise to reveal himself as one of our well-known members.”

Whiffin says taking the creative approach helps people to remember what they learned. “I can tell you people never forgot that conference.”

Her message for women and anyone who wants to advance their career as a credit manager is to put in the work to receive the recognition you deserve.

“Women are very capable; half our members are women. But nobody can rest on their laurels. I encourage all women not to think of themselves as clerks but as professionals and act accordingly. Put yourselves out there, act appropriately and keep pushing forward,” she says.

“If the person you’re reporting to doesn’t inspire you, you need to move on.”

PROFILE:

Jan Reeves Jan Reeves formerly ran a consulting firm which specialised in recruiting credit and collections professionals.

Jan feels there has been great opportunities for women to build a career in credit management for many years.

“It’s all about harnessing opportunities. Credit and collections is an area where women naturally have very good skills. You can never force someone to pay a bill; you have to persuade them. Women seem to be very good at selling people all the reasons why they should pay their account,” she says.

Reeves advice to women working in credit is to constantly seek out great mentors. “If the person you’re reporting to doesn’t inspire you, you need to move on.” She also recommends only taking advice from someone who has been where you want to go or done what you want to do.

There are many avenues for women who wish to develop their career. Reeves’ advice is to attend as many appropriate technical and personal development training courses as possible – and act on lessons learned.

“Read, become involved in the industry and attend networking events. Professional development can be enhanced by being part of a group you can add value to, and learn from,” she says.

For instance, Reeves founded the Law and Accounting Credit Managers Association. While it’s no longer operational, she says this is a good example of a networking group through which members could learn from each other.

“We invited people from legal and accounting firms to meet every month to share ideas and learn from each other. It was useful because everyone was challenged by the same set of circumstances in their businesses,” she explains.

As for the future, Reeves says there will always be opportunities for women and men in credit.

“It’s important for credit managers to understand the work they do makes a huge difference to an organisation’s bottom line. There is a visible and tangible dollar value gain on the P&L if a business is collecting at 60 days and someone improves that to, say 30 days. There’s an opportunity for credit professionals to better communicate this advantage in the companies they work for,” Reeves advises.

“People who learn how to communicate the dollar difference they can make to an organisation are going to lift their own standing in a business and in the profession,” she adds.

Reeves says credit is an ideal job for women. “It’s something they can become really good at. There are lots of women holding senior roles in credit and there’s always room for more.” *Alexandra Cain is a freelance finance journalist who has written for many leading Australian and international business publications.

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

9

Leadership and High Performance

Why do people look for jobs so discreetly?

By Geoff Balmer*

Geoff Balmer

10

Looking for a job is rarely fun. If you’re currently in a role, it all too often involves late nights trawling through job boards in secrecy to avoid anybody finding out that you are looking for a new opportunity.

You don’t want to be seen in the office as someone who is on their way out, and you certainly don’t want your boss to single you out at work either.

As an employer, you might notice the signs that a person is looking for a new role, no matter how secret they try to keep it; a noticeable drop in engagement and an exponential increase in “dentist appointments” tend to be a good sign that someone is looking to leave.

All in all, this kind of approach to job searching isn’t good for anyone – so why does everybody still do it?

The simple fact, employers, is that your employees don’t trust you.

The only way to solve that problem is to identify the cause and put steps in place to fix it; by fostering an open relationship with your accounting staff, encouraging them to give feedback on their role and the organisation as a whole together with providing an environment where they won’t be penalised for coming

forward should they feel their time has come to move on, for whatever reason. I acknowledge this is far easier said than done, as proactively discussing your job search or other concerns such as salary, can be viewed as a cultural taboo. However, creating an open internal culture can foster an environment where these challenges can be easier to discuss.

Here at Richard Lloyd, for example, we try to reinforce our open culture in everything that we do. The idea, in simple terms, is: “if you have a problem, talk to us.” There have been occasions where someone has told us they think their time with Richard Lloyd has come to an end, and they’ve done this well in advance of leaving. This gives us the time to plan, find a replacement, and to have a really effective handover. Naturally this doesn’t mean that we get it right every time, but it does limit the potential for damaging situations – something that is crucial in the Accounting recruitment industry.

Instead of ignoring obvious underlying issues until they become a problem, have regular conversations with your team and don’t skirt around topics like career planning, progression and happiness in their

“Instead of ignoring obvious underlying issues until they become a problem, have regular conversations with your team...”

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Leadership and High Performance

role. Have informal catch ups with your team members, individually, every month or so. It can be as simple as taking them for a coffee – out of the office, you would be amazed at how much more communicative people can be. Let them talk and really listen to their concerns. If they bring up that they’re unhappy, help them where appropriate if you can, including offering career advice if they’ve already decided to explore options outside of your business. By getting ahead of the problem and acknowledging the employee’s plans before they hand in their notice, you can either address them or ensure that you are prepared for when they do leave.

Another big benefit of having an open culture is the positive impact it can have on the employee. By

knowing they have your “blessing”, they can continue to work without the pressure of being the odd one out. Be understanding when they approach you and give them the flexibility to find a new role while continuing to work with you. More often than not, this results in them doing their best to ensure that everything is in order before they leave permanently, rather than switching off the moment they hand their notice in.

The way you handle this situation will also resonate with your team, increasing their respect for you and your personal culture, making people feel more comfortable at work. A further advantage of this is what it can do for your brand. By respecting that openness and flexibility, the individual will have nothing but positive things to say about you and the company

once they leave, which will help you to build great professional relationships.

In closing, if you’re consistently surprised when an employee resigns, perhaps it’s time for you to take a look at your internal practices and assess how you can improve them.

Fostering an open relationship with your employees encourages higher productivity and gives you the opportunity to get ahead of problems, as well being good for your brand. It’s time to ask ourselves why the process when someone leaves a job should be less important than when a new employee starts!

*Geoff Balmer Co-Founder and Director Richard Lloyd Recruitment Ltd Email: gbalmer@richardlloyd.com.au Ph: (02) 8324 5640 www.richardlloyd.com.au

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

11

Leadership and High Performance

How marshmallows can overcome workplace distractions

By Petris Lapis B Com LLB LLM FIPA FFA*

If you feel that distractions make it more difficult for you to do and enjoy your job, you are right.

Petris Lapis

12

Can you relate to this? You arrive at work and start checking emails.

Half way through writing a reply, you decide a coffee is in order. On the way to the coffee machine, a colleague asks if you could help review a report. The phone is ringing as you walk back to your desk.

While you are on the phone to the client, you are alerted to three more emails. An hour later you see your still empty cup at the coffee machine, realise your client’s file is on your colleague’s desk, you have no idea where the report is and you still haven’t sent the email you started drafting because of the interruptions.

If you feel that distractions make it more difficult for you to do and enjoy your job, you are right.

Researchers have found that even tiny interruptions derail your thinking and increase mistakes.1 In one study, people performed a sequence based procedure on a computer. Erik Altman and his team found that interruptions of only three seconds doubled the error rate. Other researchers found that distractions can increase the time it takes you to do a task by between 20 and 40%.2 The impact of interruptions in office is now so great, that we have interruption researchers. Gloria Marks

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

is one of these and her team spent three days studying a group of office workers and timing everything they did. They found:3 zz The average time people spent on a task before being interrupted or switching was about three minutes. zz People interrupted themselves about 44% of the time; the rest of the interruptions came from external sources. zz On average it took 23 minutes and 15 seconds to return to interrupted tasks and most people did two intervening tasks before returning to the original task.

Not only do the interruptions mean it takes longer for us to do the task, we are also not as clever as we do them.

Alessandro Acquisiti4 examined how much brain power was lost if you are interrupted by a phone call or email.

Participants were asked to read a short passage and answer questions about it. The participants who were interrupted performed an incredible 20% worse than those who were not.

When you work in a modern workplace, an inability to concentrate can lead you to miss details in reports, overlook an area for improvement or see another possibility when planning.

You may miss something vital said in

Leadership and High Performance

Are you a one or two marshmallow person at work?

Given how many interruptions are in a modern workplace, is there anything you can do? It is possible to train yourself not to give in to distractions... a phone conversation because you were looking at an email at the same time. Constant distractions can lower the quality of advice you provide, the quality of preparation you do for meetings and your enjoyment of the job. They can also make it difficult for you to find the mental space necessary for complex issues which require extended thinking space.

How marshmallows can help Given how many interruptions are in a modern workplace, is there anything you can do? It is possible to train yourself not to give in to distractions in the same way that some of the children in the famous Stanford marshmallow experiment did with their desire to eat a marshmallow.

In the experiment, young children were seated at a table in front of a marshmallow and told they could

eat it now or if they could wait until the researcher came back into the room, they would get a second marshmallow. A few ate the marshmallow straight away. The rest tried to wait for the researcher to return so they would get a second marshmallow. Of those who tried to wait, only one-third were successful and received a second marshmallow.

Later in life, the children who waited became the most successful. They had better education, higher paying jobs, a lower BMI, better relationships and tended not to have addictions or criminal records.

Researchers from another study done in Dunedin, New Zealand5 were shocked to find that a child’s level of self-control was just as important as predicting their financial success and health later in life as social class, wealth, family of origin or IQ.

When you hear an email alert, your phone tells you a text has arrived or you overhear a conversation in a nearby office, it is easy to want to immediately gratify yourself and find out what is going on. If you stop focusing on the report you are writing and immediately check the email you would be displaying the traits of a ‘one marshmallow person’. If you could hold the desire to find out what is in the email until you have finished the report, you would be displaying the traits of a ‘two marshmallow person’. You would finish the report sooner and make fewer mistakes.

Dealing with distractions in a work environment might just be as simple as reminding yourself to be a ‘two marshmallow person’. This small act of personal discipline which will pay dividends.

*Petris Lapis Director Petris Lapis Pty Ltd Ph: 0419 334 204 www.petrislapis.com

FOOTNOTES: 1

Erik Altman, Associate Professor of Psychology at Michigan State University in 2013.

2

An American study reported in the Journal of Experimental Psychology found that it took students far longer to solve complicated maths problems when they had to switch to other tasks. They were up to 40% slower.

3

“Too Many Interruptions At Work”, Gallup Business Journal, Gloria Mark, Associate Professor at the Donald Bren School of Information and computer Sciences at the University of California, Irvine and a leading expert on work.

4

A professor of Information Technology and psychologist Eyal Peer at Carnegie Melon.

5

Terrie E. Moffitt et al, “A Gradient OF Childhood Self-Control Predicts Health, Wealth and Public Safety”, Proceedings of the National Academy of Sciences 108, no. 7 (February 15, 2011): 2693-98, http://www.pnas.org/cgi/doi/10.1073/ pnas.1010076108

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

13

Credit Management

Sales vs credit

By Kevin Artlett FCICM ACII Background FACT: relationships are all about close connection, close association and close feelings and will not blossom without these fundamental components existing between those involved.

Fact: Businesses will not survive without sales, managed by the sales team, and without cash flow, managed by credit control.

Therefore, it is vital that a strong, healthy relationship is built and maintained between these two key departments within a company. Yes, I know it sounds obvious but, even in the 21st century I still see many instances where this is not the case.

This topic was covered in depth in a very recent training/tuition course

Cultivating the relationship between Sales and Credit can start at the earliest possible stage.

I was running, where one of the delegates said they had witnessed a ‘stand up row’ in the corridor between the sales director and the credit manager over a credit decision.

Astonishing! Or is it?

Key areas for potential conflict

Kevin Artlett

14

Before we look at ways to build the relationship let us examine three key reasons for the problems arising in the first place.

Perhaps the most common misconception is that the Credit Department is “Sales Prevention Department” and will put up barriers to the efforts of Sales. As a

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

result, the salespeople feel their job is being interfered with and nobody likes that.

This often occurs because there is seemingly no alignment between the sales strategy and the credit control objectives. Sales see Credit as being desperate to increase collection rates and reduce DSO figures and view credit controllers as being over cautious and even inflexible.

On the other hand, Credit often look at Sales as being hell-bent on securing more orders (and more commission!) and behaving over zealously meaning they are constantly trying to cut corners in areas such as risk assessment and extended payment terms.

Then there is the potential rivalry between Sales and Credit as to which is the most important for an organisation. As stated at the beginning, one cannot survive without the other, but this does not stop the relationship problems.

In-house fighting and unhealthy competition will have a negative effect on performance, sales, profits and reputation so we must address this situation.

The third area is one where I have recently started to see improvements.

It actually involves looking at how both of these departments actually view themselves rather than just each other. When asked what they see the main functions of their department as being, credit controllers often state things which actually sound negative (“chasing overdue debt”, “hitting cash targets”, “resolving queries”, “sorting out misallocated and unallocated cash” etc.)

Credit Management

Whereas the mantra on the Sales function sounds much more positive i.e. “generate more sales”, “increase revenue for the business”, “sign up new customers”. As a result it is imperative that we all strive to feel positive and motivated in what we do and to recognise that maximising sales and minimising losses is best achieved through a team effort between Sales and Credit.

Improving relationships

adhering to them. They could also obtain documents for Credit Control such as a company letterhead or business card so that the process of credit checking can start straight away.

Communication channels should be kept open between Credit Control and Sales and each should know who is the assigned salesperson and credit controller for each customer. From experience, it would be very helpful if Sales could provide a list of their planned movements or locations in advance each week to Credit Control to see if there is a customer in the area who is in arrears that a sales person could call on to collect payment or to ascertain the situation at short notice.

These suggestions for improving, building and maintaining a good relationship between Sales and Credit are by no means exhaustive. However, we should accept that we cannot do without each other and we should respect and understand the vital role each department plays and why it is essential that we work together.

Cultivating the relationship between Sales and Credit can start at the earliest possible stage. For all new recruits to either department, part of their induction should involve spending at least half a day meeting with their colleagues from Sales and Credit to find out what goes on, what the constraints may be and gain a clear insight into ways the sales team can help the credit controller and vice versa.

Thereafter, regular formal meetings of not more than an hour every four to six weeks should be arranged and given the credence they deserve. This should involve sharing positive as well as negative information on customers, sales drives and target markets as well as information on late and *Kevin Artlett FCICM ACII non-paying customers, accounts nearing their credit limit Credit Control Consultant and Trainer and, of course, disputes. At this point, it should be stressed Pecunia (2016) Limited kevin@pecunia2016.co.uk that issues of a serious nature should not be saved up for www.pecunia2016.co.uk these meetings but that a system for disseminating the information as quickly as possible should be devised.

In a previous company where I was a Credit Manager we even produced Aged Debt analyses for each sales person together with their own DSO figures, which provided some good banter and healthy competition amongst Sales as well as helping Credit Control in its ASIC Extract Snapshot: LITTLE PROJECTS PTY. LIMITED ASIC Extract Snapshot: CHOAM PTY. LIMITED cash collections.

LITTLE PROJECTS PTY. LIMITED Current Organisation Details ASIC InfoTrack Joint visits between the sales person and Credit Control ACN 100 100 100 Start Date 14/09/2010 Current Organisation Extract ABN 85 100 100 100 Name CHOAM PTY. LIMITED to potential, new and existing customers should also be Current Name CHOAM PTY. LIMITED Name Start Date 14/09/2010 encouraged, where possible, especially for key accounts. Registered In Victoria Status Registered Registration Date 07/11/2005 Type Australian Proprietary Company This not only enables the credit control representative to Review Date 07/11/2015 Class Limited By Shares - 100 100 100 CHOAM PTY. LIMITED Company Type ACN (Australian Company Number) Sub Class Proprietary Company meet their counterpart in the customer’s Accounts Payable Disclosing Entity No team but demonstrates professionalism on the part of your Document No. 1E1001000 company. It will also serve as a very useful insight for Credit Company Directors Share Structure Control in to the daily challenges of Sales and help cement Class Class Type Shares Issued Amount Paid Current Directors: 3 - Current Organisation Details - A A CLASS ORDINARY SHARES 60 $60.00 the relationship between the two.

Company Secretaries B B CLASS ORDINARY SHARES 25 $25.00 24 C C CLASS ORDINARY SHARES 15 $15.00 Credit Control could demonstrate flexibility in its Company Secretaries: 1 ORD ORDINARY SHARES 100 $100.00 approach of assessing the creditworthiness of customers Full ASIC results > - Company Addresses by classifying the current portfolio of accounts by risks Risk Data and opportunities in order to give Sales more guidance.

Summary Court Judgements 2 Also, rather than making a prompt decision not to sell to Payment Defaults 4 a customer because they are not deemed creditworthy Insolvency Notices 1 - Company Officers Mercantile Enquiries 7 enough, the Credit Manager should look to accept business Credit Enquiries 18 Credit Score on a different basis. For example, it might be possible to obtain guarantees, trade on a cash basis or even offer credit terms shorter than the standard terms.

For Sales, when they are visiting potential customers Full Credit report > they could spend some time talking about the standard payment terms and the importance of the customer CHOAM PTY. LIMITED

1800 738 524

ACN

100 100 100

ABN

85 100 100 100

Current Name

Current Organisation Details Start Date Name

CHOAM PTY. LIMITED

Name Start Date

Registered In Victoria ASIC Data Extracted 22/12/2016 at 08:34 Registration Date 07/11/2005

Status Type

14/09/2010

CHOAM PTY. LIMITED 14/09/2010

Under External Administration

Australian Proprietary Company

This extract contains information derived from the Australian Securities and Investment Commission's (ASIC) Review Date 07/11/2015 Class Limited By Shares database under section 1274A ofType the Corporations Act 2001.Please advise ASIC of any error or Sub omission Company ACN (Australian Company Number) Class which Proprietary Company you may identify.

Disclosing Entity No Document No.

Company Directors

Share Structure

Current Directors: 3

Class

ACN (Australian 100 100 100 Company Number): Company Secretaries 85 100 100 100 ABN: Secretaries: 1 CHOAM PTY. LIMITED Current Name: Company Registered in: Registration Date: Review Date: Company Bounded By:

Name:

Name Start Date: Status: Type: Class: Sub Class:

Shares Issued

Amount Paid

A CLASS ORDINARY SHARES Document No.

60

$60.00

B

B CLASS ORDINARY SHARES

25

C

C CLASS ORDINARY SHARES

15

$15.00

ORD

ORDINARY SHARES

100

$100.00

A

Victoria 07/11/2005 07/11/2015

1E1001000

Class Type

$25.00

Full ASIC results >

Risk Data Summary

Court Judgements

2

Payment Defaults

4

Insolvency Notices

1

Mercantile Enquiries 7 1E6849286 Credit Enquiries 18

CHOAM PTY. LIMITED 14/09/2010 Under external administration Australian Proprietary Company Limited By Shares 0 Proprietary Company Higher Risk

Average Australian Proprietary Company

850

Lower Risk

Full Credit report >

- Registered Office Address: Start Date:

1F0479851

1 SMITH STREET VIC 3000 09/06/2014

1F0479851

- Principal Place of Business 1 SMITH STREET VIC 3000 Address: 19/05/2014 Start Date:

Note: A date or address shown as UNKNOWN has not been updated since ASIC took over the records in 1991. For details, order the appropriate historical state or territory documents, available in microfiche or paper format. * Check documents listed under ASIC Documents Received for recent changes.

REVEAL workspace >

1

Directors

2 1

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

15

Credit Management

Welcome to our new National Sponsor Bureau Van Dijk The AICM is thrilled to welcome Bureau Van Dijk, the specialist in global private company information as a National Partner and looks forward to working closely with their team to provide leading edge reporting solutions for credit managers.

To introduce our new relationship, Bureau Van Dijk’s country head Stephen McKinney has prepared a summary of how they provide vital information for credit managers in a format that assists with the risk decision and supports the credit manager’s recommendation.

Untangling the world of private company information Trust is a constant and fairly consistent challenge when professionals look to obtain private company information. When you look to obtain financial information on a company you naturally ask “where is this information coming from and what are the underlying sources?”

Some of the uncertainty around private company information can be lifted by exploring exactly what constitutes a private company, and why exactly it’s important for a business to know about the financials and other risk indicators related to these companies.

According to Forbes magazine the workforce of the USA’s largest 441 private companies in 2008 was over 6 million-strong, contributing nearly $2 trillion in revenue to the country’s economy. That’s over $5,000 for every man, woman and child in America. This figure is just from the limited group of top-performing companies that made it on to the Forbes “America’s Largest Private Companies” list that year. If all private companies were included, the figure would be higher.

This tells us something about just how important private companies are to form the bigger picture, and how important it is not to ignore their contribution. Even public companies contain private subsidiaries inside their corporate structures, which is

16

something of high importance in these times of heightened sanctions and scrutiny, and transpacific compliance.

If we look to understand a little more about the reporting differences around the globe we can see why there is such great diversity between how different regions collect data.

Here are some examples: zz Some regions like the UK grew a philosophy, born in the industrial revolution, that investors would be drawn to companies whose profit and growth potential were evident in their accounts – and this practice officially exists today, controlled by Companies House. zz But in the USA it’s a different story – with no single governing body responsible for collecting this data. zz In Asia-Pacific company information gets even more complicated due to cultural diversities and volume alone (China’s company count runs into eight figures).

Bureau van Dijk understands that we cannot ignore the thousands of smaller repositories of information available to us and that’s why we work with so many information providers (IPs) across the globe.

Understanding how these information providers monitor and harvest information is seemingly mind-boggling – for example, Cortera in the US, glean information from the thousands of county administrations around the nation. These smaller

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Stephen McKinney governing bodies receive vast numbers of varying submissions from millions of private companies and, using clever algorithms and analysis, an IP such as Cortera can produce valuable insights.

BvD then overlays a ‘non-financial’ risk score from MODE Finance, to give a risk profile on small private companies which puts you in a much stronger position to make evidencebased decisions.

To understand more about who reports what and why, and how you can use it you can read our white paper – Untangling the World of Private Company Information.

Stephen McKinney General Manager – Oceania T: 61 2 9233 3088 E: stephen.mckinney@bvdinfo.com www.bvdinfo.com

Credit Management

Making the most of trade credit bureaux

By Alexandra Cain* Trade credit bureaux are some of the most valuable tools in a credit professional’s box.

These bodies help credit departments manage risk. They are also an important networking and mentoring forum.

Here, we profile four people who lead credit bureaux to help members understand how they operate and how to make the most of them.

Wayne Clark Executive Director

Building Industry Credit Bureau

Trade bureaux are forums to exchange information regarding debtor payments for businesses in the same industry sector. As Clark explains, the extent to which a customer is in debt to other suppliers in the same industry is a useful indicator of the likelihood of a debtor not paying its other bills.

“Industry trade bureaux are good at facilitating the exchange of this information,” he states.

18

Aside from arranging regular meetings at which members can discuss their problem debtors, the Building Industry Credit Bureau also manages a comprehensive online database to which members have access.

“But they still find it invaluable to come to face-to-face meetings,” Clark advises. Meetings tend to follow the billing cycle and are usually held monthly, although some bureaux run bi-monthly meetings.

“We run them monthly in metro areas. But in some regional areas we run them every two months. All members, including the regional ones, have the opportunity to come to a city meeting,” says Clark.

Most importantly, information shared at meetings can help members reduce the risk of incurring bad debts.

One of the ways they do this is by identifying customers who switch suppliers due to non-payment of accounts.

“Quite often you’ll get two or three suppliers sitting in a meeting talking about a customer on stop, and another member will say ‘Oh that’s why they’ve come to us now’, so it’s very valuable for that sort of information,” Clark adds.

“It gives members the opportunity to identify payment trends in the industry as well. So if one member discloses they are having a problem with a customer other members might realise they’ve got a potential problem looming and they can do something about it. So it’s an early warning system for credit staff,” he adds.

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Jeff Hurst Director

Trade Bureaux Australia

Credit bureaux are an important way of providing members with up-todate data about the risk attached to their credit portfolio. They augment the data Dun & Bradstreet, Equifax or Creditor Watch provide.

Hurst explains before meetings members compile a list of customers they want to discuss. He says there are generally between 60 and 120 customers on the schedule.

According to Hurst the bureau tends to meet in the middle two weeks of each month. “During that time organisations have finished their month end,” he explains.

Meeting participants sign an agreement they’re going to provide data that will enable other members to gauge on a credit risk basis whether a customer is right for them and what their credit limit should be.

Credit bureaux provide addition

Credit Management

information relating to current trends within the credit industry, and provide an education avenue for members.

Guest speakers are invited to present information on a number of topics from PPSA to recent court actions.

“Expect to have a far better understanding of who you’re selling to by attending these meetings; you get much better information than you get just by sitting in front of the computer and looking at reports,” Hurst says.

“If a member has a problem with an account and other members are able to hear about it from them, it gives them the opportunity to start asking the customer additional questions,” he adds.

Eric Milne Credit Manager

Temperzone Australia Pty Ltd

Networking and mentoring opportunities are some of the main reasons to join a credit bureau. different credit bureaux. He has established more than three credit bureaux.

He says credit bureaux afford senior credit people the opportunity to pass on their knowledge and experience to younger up-and-coming credit managers or to credit managers who have come into an industry group from other sectors.

Milne says meetings tend to go for three or four hours. “We normally have a networking lunch after the meeting, so members can discuss one-on-one with colleagues problem accounts that were raised during the meeting. It’s also an opportunity to pick people’s brains if they have a credit-related problem or issue.”

As a 40-year credit bureaux veteran, Milne says they offer participants value on several levels.

“It’s an opportunity to be a better credit manager,” he says.

Sandra Przibilla

an honest and open view of what’s actually,” says Przibilla, when asked about the benefits of joining a trade credit bureau.

Aside from the inside running attending a bureau offers members, she also stresses membership is a great business networking tool. “It will expand your learning about new challenges and different ways to manage them,” she explains, adding that her meetings generally run for about 90 minutes.

According to Przibilla, in a wellrun bureau, members should have confidence in the facilitator and that the information being provided is treated in the strictest confidence.

“Members should also feel sure the summation report is accurate and encourages good conversation,” she says.

Przibilla explains meeting face to face is essential as credit is about much more than just the numbers.

“You’re dealing with opinion and it’s important to have a conversation.”

The Drinks Association

What’s the cost?

CEO

Networking and mentoring opportunities are some of the main reasons to join a credit bureau.

“When credit managers attend a credit bureau they meet other credit managers from their industry and are able to discuss mutual problem accounts with them. Meeting face-toface builds up a confidence and trust with the other person so credit-related information can be freely shared without fear of their confidence being abused or breached,” he says.

Having worked as a credit manager in several industry groups, Milne has been involved with several

Cost of membership of a trade credit bureau depends on how many times the bureau meets a year and the nature of the bureau. Costs start at about $1,000 a year and range upwards from there, depending on the nature of the bureau and the industry sector it operates in.

“If your bureau is well attended, it is the only place you’ll get insight into accounts in your industry and

*Alexandra Cain is a freelance finance journalist who has written for many leading Australian and international business publications.

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

19

Credit Management

New Payments Platform heralds a new era for efficiencies

“Already the Australian public has embraced electronic payment methods... But for this evolution to continue, our basic payments infrastructure needed an upgrade to enable a shift to immediate payments.

20

Efficiencies in credit management could soon receive a significant boost thanks to the upcoming launch of the New Payments Platform — new infrastructure for Australian payments being developed through a major program of industry collaboration.

The New Payments Platform promises Australian consumers, businesses and government the ability to make near real-time payments, 24 hours a day, 365 days a year. It will also allow more data to be sent with these payments, such as longer descriptions or attached remittance documents.

The platform can also simplify the payments process through an Addressing Service, which offers users the ability to direct payments to accounts via an easy-to-remember identifier like a phone number, email address, ABN or organisational identifier. This service will be called PayID, and will be promoted closer to the time the platform launches.

According to CEO of NPP Australia, Adrian Lovney, the New Payments Platform was born from an industry that recognised the need to progress payments to meet the evolving demands of a digital economy.

“Already the Australian public has embraced electronic payment

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Adrian Lovney methods — chip cards (contactless or “wave and pay”), BPAY, direct entry — and new technologies such as smartphones. But for this evolution to continue, our basic payments infrastructure needed an upgrade to enable a shift to immediate payments.

“At the same time businesses need to be able to improve their efficiency and costs, and the New Payments Platform offers the potential for payments to be reconciled more easily, make cash flow much more predictable, as well as improving the management and reconciliation of inventory and stock between suppliers,” Mr Lovney said.

Credit Management

The history of the New Payments Platform

How does the platform work?

The future of payments

There are three key components to the New Payments Platform infrastructure: 1. The Basic Infrastructure: This includes a network (which connects participants), a switch (which moves messages between participants via the network) and the Addressing Service (PayID) which enables transaction accounts to be identified by an easy to remember identifier such as an email address, phone number or ABN number.

2. The Fast Settlement Service: Provided by the Reserve Bank of Australia, it enables every single payment made on the platform, regardless of its size, to be settled in real-time in central bank funds, across each financial institution’s Exchange Settlement Account.

3. Overlay Services: This is name given to the payments related products or services, and that will use the Basic Infrastructure. These products or services could offer vastly different experiences, or similar experiences, and in many cases could compete with each other.

This is where the New Payments Platform breathes life into innovation and competition.

The first Overlay Service delivered via the New Payments Platform will be delivered by BPAY. With an entirely separate brand to BPAY, this offering will be the first consumer experience of the platform’s speed, convenience and data capabilities. Over time it’s expected that more innovators will leverage the platform’s features to offer more ground-breaking payments experiences to the Australian public.

According to Mr Lovney, what these new experiences could look like is in the imagination of these organisations.

“It’s likely that the transmission of data along with payments will mean business applications will be a key focus. As well as opportunities in industry verticals, such as funds management, in and around the stock exchange, or in the insurance and superannuation industry,” he said.

Who is involved?

While the platform is being collaboratively developed and funded by 13 participating financial institutions, a large number of additional financial institutions will also connect to the infrastructure through one of the initial Participants.

You can see the list of Participants at the New Payments Platform website here: www.nppa.com.au

The NPP came to life following a strategic review of the Australian payments system by the Payments System Board of the Reserve Bank of Australia (RBA) in 2012.

This review identified a range of additional features which were desirable in the Australian payments system, principally the capability to make payments in real-time.

From there, a number of industry players came together to form the Real-Time Payments Committee (RTPC) and submitted a proposal that highlighted how payments systems and schemes around the world are becoming more commercial and competitively oriented, and Australia must proactively adapt.

As a result the RTPC recommended a new layered business architecture for payments clearing and settlement, and a system that offered a range of new real-time payment services to consumers, businesses and government.

Eventually this proposal evolved into the New Payments Platform.

NPP Australia Limited (NPPA) was formed in December 2014 to oversee the build, operation and management of the NPP. Adrian Lovney was appointed as the inaugural CEO of NPP Australia in September 2016.

When will the NPP be available?

On the platform’s availability, Mr Lovney said that like any project of this magnitude there is a complex and thorough testing regime to complete before a decision is made to make the NPP publicly available.

Subject to this testing, the Australian public can expect to see services offered via the NPP ramp-up from October 2017.

For more information about the New Payments Platform visit: www.nppa.com.au

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

21

Legal

What is the link between financial literacy and bankruptcy?

By Gregory Mowle*

The majority of bankrupts are not “high-flyers” but rather are nondescript low to middle income earners with modest amounts of consumer debt and almost no assets.

Gregory Mowle

22

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

In 2016 I interviewed 29 undischarged Australian bankrupts as part of a thesis investigating financial literacy. The aim was to discover if this accepted poor financial outcome, going bankrupt, was the result of the individual’s level of financial literacy. The public policy on financial literacy education is built around the premise that financial literacy levels in Australia are low (as measured by some standard tests), therefore more education in the form of brochures, courses and websites should be delivered. The policy makers say this increase in education initiatives will increase knowledge, and therefore consumers will avoid making poor financial outcomes such as going bankrupt or not saving for their retirement.

It is easy to spot the flaws in this policy. How can you “test” financial literacy? Do people actually acknowledge and read brochures and websites? Does increased knowledge lead to a change in behaviour? Is financial literacy the sole reason for a poor financial outcome?

This is why I wanted to interview bankrupts. Was their insolvency the result of them being financially illiterate?

Were they greedy and reckless, shamelessly hiding assets from creditors as the public perceives most bankrupts?

What I found had two levels. First, the demographics and data collected from the bankrupts supported the publicly available data from the Australian Financial Services Authority (AFSA). Second, the reasons why the consumers became insolvent are complex, integrated and could not have been prevented by a pre-emptive financial literacy initiative such as a brochure. The majority of bankrupts are not “high-flyers” but rather are nondescript low to middle income earners with modest amounts of consumer debt and almost no assets. This confirms Australian insolvency academics Ian Ramsay and Cameron Sim’s research from 2010 that personal insolvency in Australia is a “middle-class phenomena”.

See you at AICM’s Does increased knowledge lead to a change in behaviour?

Is financial literacy the sole reason for a poor financial outcome?

The last, and only other, time someone spoke to Australian bankrupts was Martin Ryan who interviewed 77 bankrupts in Melbourne in 1986.

Ryan explored a range of themes such as the effect of harassment from debt collectors, the efficacy of welfare payments and any feelings of shame or guilt that the bankrupts experienced.

To repeat Ryan’s research, in late 2015 I invited 1000 undischarged bankrupts to participate in my research about their experiences of bankruptcy.

The bankrupts were recruited from the National Personal Insolvency Index (NPII), the public record of personal insolvency proceedings in Australia that is maintained by the AFSA. Invitations were sent to 1000 undischarged (current) bankrupts in November 2015. A second round of invitations was sent in mid2016 and a total of 29 bankrupts agreed to take part in taped interviews with an average interview time of 70 minutes.

Even though most of the bankruptcies were non-business related, the findings and themes that emerged from the interviews have relevance for all credit managers.

First, the bankrupt’s insolvency was not caused by one single factor such as low financial literacy.

Their insolvency was caused by a series of interwoven events and mishaps as well as interacting factors such as peer pressure, advertising tactics, commissiondriven loan selling, and relationship breakdown.

Not every poor financial outcome, such as going bankrupt, is a result of poor financial literacy. External factors such as a relationship breakdown, coming into contact with a salesperson incentivised to earn a bonus by selling a specific financial product, and the power of advertising mean that even the most financially literate individual may still make poor financial decisions.

A striking example from the interviews was a 40 year old low-skilled male who was on casual wages of $450 a week and sharing public housing

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May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

when he went shopping for a car. He knew he should purchase a car with a price of $5000 maximum but made a life-changing decision to stop off at a new car yard to admire his “dream car” – that came with a $47,000 price tag. He had no intentions to buying when a salesperson approached him. One hour later he drove away in his dream car having been financed to repay a total of more than $70,000 over 7 years. Six months later the car was repossessed and he was presented with a $52,000 bill for the loss after auction sale. A friend told him he should go bankrupt, so he did. If he had of sought professional advice, they would have suggested that the debt be challenged under the Responsible Lending obligations of the Credit Act. The second theme to emerge was that stress from their situation caused debtors to panic and not think clearly.

This meant they chose the wrong options. These included trying to consolidate their debts (throwing new debt on top of old debt rarely addresses the underlying causes of insolvency), ignoring the problem, avoiding professionals who could assist them (financial counsellors, insolvency practitioners), and asking family and friends for financial assistance or for advice – even when they clearly don’t have the support or knowledge to assist. I specifically asked the bankrupts who, or what, they first went to for assistance on insolvency or debt management. The majority typed in a phrase like “help with debts” on their internet search engine and then clicked on the first links that appeared. This meant debtors were contacting firms that are in the business of providing either consolidation finance or an insolvency option such as a Part IX Debt Agreement. While they are legitimate options, they were not the best options for the bankrupts at that stage of their insolvency. What they needed was more time. Time to think of a long-term solution to their crisis such as finding employment or restructuring their business. They needed time away from the pressure of receiving communications from creditors – all requesting that their debt be repaid first. They needed time to seek out the professional and impartial advice that they needed and then digest the information they receive.

The third theme is that lack of a support network is a key factor in whether a debtor ends up bankrupt. A support network includes family and friends who can be relied upon to provide emotional support as well as referral to appropriate medical, psychological and financial services.

Lastly, while the purpose of the interviews was not to forensically dissect their financial situations, objectively at least half of the bankrupts interviewed did not have to go bankrupt. This is not to say that they were to continue with the burden of their debts and struggle in financial hardship. Rather they could have accessed a range of options to assist them in the short and/or long term.

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CREDIT MANAGEMENT IN AUSTRALIA • May 2017

While credit managers need to make a quick and firm decision whether to pursue outstanding debts, they should do so from a perspective of “This debtor wants to pay, but presently cannot...”

These included using the National Hardship Scheme, or utilising financial counselling agencies to access a range of options such as challenging the debt, utilising financial hardship options such as a moratorium for 90 days, or using the free and independent Ombudsman services.

While the main aim of my research was to assist with the development and delivery of financial literacy initiatives by looking at their effectiveness through the lens of bankrupts, the findings have implications for all credit managers. The bankrupts all reported that they did not want to go bankrupt. They wanted to pay their debts but could not. Most felt great shame and embarrassment at having to go bankrupt and expressed that they felt like failures. Except for one of the bankrupts that I spoke to, there was a zero return back to creditors. While credit managers need to make a quick and firm decision whether to pursue outstanding debts, they should do so from a perspective of “This debtor wants to pay, but presently cannot. What can I do to assist them in the short-term including referring them to independent professional services?”

*Gregory Mowle, Faculty of Business, Government & Law, University of Canberra ACT. Ph: +61 488138430, Email: gregory.mowle@canberra.edu.au About the Author Gregory Mowle initially worked in the finance sector across the lending, insurance and credit management fields. In 1999 he was the Dux of the Australian Institute of Credit Management’s Certified Credit Executive program.

In 1999 he took his extensive experience of consumer credit to work for Lifeline Brisbane as a financial counsellor. In 2004 he developed financial literacy programs for The Smith Family, creating partnerships with major lenders and governments for effective early intervention programs.

In 2009 he joined the corporate and financial regulator, ASIC, to work as part of their consumer education team. He is currently completing a PhD at the University of Canberra where he is also a lecturer.

Insolvency

Insolvency Law Reform

By Nick Combis*

Changes to Australia’s corporate

required to provide the creditor

insolvency laws being implemented

the information and or records

during the course of 2017 under

requested. This period can be

Insolvency Law Reform Act 2016

extended by written notice or

(Cth) (“INLA”) are designed to

agreement between the parties.

increase the powers of creditors in cases of insolvency.

The new changes will impact

The new changes will impact both the application of the Corporations Act 2001 (Cth) and the Bankruptcy Act 1966 (Cth)

response to the creditor outlining

Corporations Act 2001 (Cth) and

the reasons why they consider the

the Bankruptcy Act 1966 (Cth) and

request “unreasonable”. The INLA

will be implemented in two stages,

provides a list of circumstances in

the first having come into effect on

which a request will be potentially

1 March 2017 and the balance from 1

deemed “unreasonable” which

September 2017.

includes:

The major purpose of the changes has been identified as the following: 1. to improve the public confidence in the insolvency profession

zz complying with the request would prejudice the interests of a creditor or a third party; zz that the information is subject

through better regulation of

to legal professional privilege or

practitioners;

provision of the documents would

2. to achieve improved harmonisation between corporate and personal insolvency regimes; and 3. to encourage participation in the through improved access to information; and The major changes in the legislation which will affect creditors include the following:

Increased access to information From September 2017 the INLA provides a direct ability for creditors to request access to information or books and records from Liquidators.

This includes the production of reports the ability to convene creditors meetings.

Within five (5) business days of receiving a “reasonable” request

26

they need to provide a written

both the application of the

insolvency process by creditors

Nick Combis

If the practitioner believes the request to be “unreasonable”

from a creditor a practitioner is

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

be a breach of confidence; zz that there are insufficient funds in the matter; zz that the information has already been provided; or zz that the request is vexatious having been made within 20 days of a previous request.

In the event that the information is not supplied or the request is deemed “unreasonable” the creditor may apply to the Australian Securities & Investments Commission (“ASIC”) for assistance. Where ASIC directs the practitioner to provide the records requested, failure to comply will result in disciplinary action against the practitioner.

In addition to the above the INLA will require Liquidators to provide a report to creditors within 3 months of appointment outlining investigations

Insolvency

carried out to date and documenting the likelihood of a dividend to creditors in the liquidation.

Practitioners will also be required to issue creditors with reports within 20 days of their appointment outlining their rights in the insolvency estate, including to convene meetings, request information and review the practitioner’s remuneration.

Power to convene meetings From September 2017 creditors will be able to direct Liquidators to convene a meeting of creditors either by resolution of creditors, through a committee of inspection or if written request is received from sufficient creditors. The Liquidator must comply with all such “reasonable” requests.

The necessary percentage of creditors required to request a meeting is lower within the first 20 days of the appointment with as little as 5% of

creditors holding the total outstanding debt being required to request the meeting.

Removal of external administrators At any meeting of creditors it may be resolved to remove and replace the existing external administrator.

Such meetings can occur following 5 business days’ notice and the proposed replacement appointee must provide a Declaration of Independence, Relevant Relationships and Indemnities (“DIRRI”) to be issued with the notice of meeting.

Any replaced external administrator has the right to make an application to Court to seek reappointment.

These changes increase the ability of creditors to make replacements as the existing insolvency legislation only allows removal at certain meetings of creditors.

If the practitioner believes the request to be “unreasonable” they need to provide a written response to the creditor outlining the reasons why they consider the request “unreasonable”.

Review of remuneration Creditors will have the power to pass a resolution at a meeting to appoint a Registered Liquidator to conduct a review of the remuneration of an incumbent practitioner from September 2017. Any such review will be limited to the 6 months prior to the appointment. The scope of the appointment and the fee for the work can be negotiated between the creditor and the reviewing Liquidator.

The costs of the review will form part of the expenses of the external administration, subject to a resolution of creditors.

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

27

Insolvency

ASIC or the Courts may appoint a reviewing Liquidator to review any other matter of the conduct of an external administration including the decisions made by practitioners to sell assets or pursue various lines of recovery.

Committees of inspection The INLA will increase the powers available to Committees of Inspection (“Committee”) to direct an external administrator to do certain acts or take certain recovery actions. While an external administrator will not automatically be bound to enact the recommendations of the Committee, they must produce a written response as why they believe the Committee’s directions to be incorrect.

Committees can resolve that a member obtain external advice in relation to the external administration, which allow the engagement of a third party practitioner or other expert to provide some oversight on aspects of external administrations. Costs of this external advice will be expenses of the administration in the event that either court or the Administrators consent is provided.

Large creditors (those with more that 10% of the total outstanding debt) may automatically appoint a representative to any Committee. The INLA has also changed the rules for membership to Committees to ensure that the creditors are the Committee members and not the individuals nominated thus removing the need for new nominations if a representative departs the employment of a creditor.

Assignment of legal actions/ rights to sue From 1 March 2017 Insolvency Practitioners are permitted to sell or assign the personal rights of action held by Insolvency Practitioners to third parties. This includes rights of action against recipients of preferences, voidable transactions and other matters identified as a result of

28

the Liquidator’s investigations. This change has been designed to improve the prospects of a return to creditors and allow for the finalisation of insolvency estates faster and is similar to the existing insolvency structure operating in the United Kingdom.

Creditor or Court approval of any assignment will be required where there is a compromise of the debt due to the company or the arrangement is to extend beyond three (3) months.

In effect, this is likely to apply to most assignments of proceedings.

An increased emphasis will therefore be placed on creditors to review any proposal brought to them by a practitioner to sell or assign legal recoveries. Creditors will need to weigh whether the prospect of any upfront payment for legal proceedings is sufficient compensation for the minimised risk and recovery time associated.

The practical effect of this change is difficult to quantify. While a market for litigation funding has existed for some time, there currently is no independent market for the acquisition of the actions contemplated by these changes.

Parties who are the target of such actions may find that the acquiring third parties are better resourced and more motivated to pursue actions than Insolvency Practitioners.

is intended to mean that changes to the operation of the Corporations Act 2001 (Cth) and the Bankruptcy Act 1966 (Cth) will be possible following ministerial input and decree rather than requiring fresh legislation to be drafted and enacted by parliament.

In 2016 the government released an addition proposal paper regarding the introduction of Safe Harbour arrangements to allow for increased restructuring and turnaround in the Australian insolvency market.

Additionally the proposal paper flagged the removal of ‘ipso facto’ clauses designed to prevent or hamper the ability of a company subject to external administration from successfully maintaining its current business operations.

No bill has been introduced to implement these changes however a discussion paper has been released and legislation is expected to be introduced later this year or 2018.

Further changes

About VINCENTS Established for more than 25 years Vincents is an Australian firm of accounting experts and business advisers specialising in assurance & risk advisory, business advisory, corporate advisory, financial advisory, forensic services and insolvency & reconstruction.

The structure of the INLA will allow for a more flexible framework with many of the new changes taking the form of insolvency rules and procedures. This

About the Author *Nick Combis is an expert insolvency practitioner with over 25 years’ experience, specialising in both corporate and personal insolvencies from the time he completed his tertiary studies. Nick has been actively involved in more than 4000 voluntary administrations, liquidations and bankruptcies covering a diverse range of businesses and industries. His proactive approach to his work results in an ability to effectively manage risk and deliver quality results in an efficient, costeffective manner.

The structure of the INLA will allow for a more flexible framework with many of the new changes taking the form of insolvency rules and procedures.

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

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PPS

Change to meaning of PPS lease

By Peter Mills*

Generally, the changes vary the time period from one year to two years for the meaning of “PPS lease”, and were sought by the Hire and Rental Industry Association Limited

AICM is regularly made aware of issues by councillors and members. This engagement is extremely important, so that our members’ voice is heard when changes are intended to be made to important credit laws. Recently, PPSA expert and Qld Division AICM Vice President Peter Mills made AICM aware of intended changes to the PPSA which had been introduced into Parliament without public consultation. Following discussion of the issues with the AICM Board, Peter, prepared AICM’s lengthy and detailed submission to government in the short time available to urge the amendments be reconsidered.

This article is an abridged version of the changes, the submission, and how all businesses will be substantially affected. Specialised advice should be sought on how members’ business’ should best deal with the changes.

Summary The federal government introduced a Bill to make changes to the meaning of “PPS lease”1 (the changes) in March 2017.

At the time of writing, the amendments Bill had been read and passed in the Senate and House of Representatives; however a final reading is required in the Senate before moving to the Governor-General for Royal Assent. The changes have not yet become law, but might. AICM will keep members informed. If assented to, the changes will take immediate affect.

Background Generally, the changes vary the time period from one year to two years for the meaning of “PPS lease”, and were sought by the Hire and Rental Industry Association Limited (“HIRA”), due to the: 1. Risk of loss of priority if a lessee goes into Voluntary Administration or liquidation2, and 2. Cost of PPSA compliance being too burdensome.

The changes apply in relation to all leases or bailments entered into after the day on which the Governor General Assents to the laws. No transition or “honeymoon” period is provided for.

The changes Peter Mills

30

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

1. Will generally mean leases and bailments for a fixed term of more than 2 years will be “PPS leases”, but only

PPS

after 2 years of substantially uninterrupted possession has passed.

2. Certain leases and bailments for an “indefinite term”, or of less than 2 years, will still be “PPS leases” if they “might” exceed 2 years. “Might” is not defined by the PPSA. “Might” is commonly used to express not a “more likely than not”, or “on the balance of probabilities” outcome, but a remotely possible outcome. (eg “I might buy a boat if I win the Lotto”).

3. Will create a third version of the meaning of “PPS lease” in less than 5 years, and which is not consistent with either: (a) The recommendations made by the Whittaker Review; (b) Most other countries’ PPS laws equivalent of “PPS lease” (such as New Zealand and Papua New Guinea) and so cause specific confusion for registration requirements for goods coming from Australia or such other countries, or (c) Australian and international accounting and finance standards3.

These differences enhance difficulty, inconsistency and additional compliance costs for credit and finance departments, especially where goods move between countries, and/ or common customer T+C’s are used in various countries; 4. Will require businesses to incur substantial costs, and lose rights and defences, as future hires will not be “security interests”: (a) The most common type of lessors hire out goods for an indefinite term, or for a fixed term of greater than 1 year (but less than two years). Before the changes, they are entitled to, and normally register a PMSI, and have super priority over their goods and proceeds; (b) Due to lack of honeymoon or transition provisions, businesses will likely incur substantial expenses, including: (iii) Reviewing and suitable redrafting of new T+C’s; (iv) Creating new registration protocols and compliance, and (v) Have their existing PPS lease registrations discharged within 5 business days of the commencement of the changes or be likely committing an offence. (c) PPS lessors have an automatic priority over and be secured over proceeds for the debt and all enforcement expenses. Under the changes most businesses will: (i) lose these rights, as they will no longer hold a “security interest”; (ii) not be entitled to require a liquidator, receiver or VA to acquit for any funds the liquidator, receiver or VA receive which are “proceeds”;

(iii) become an unsecured creditor as to the rental paid (normally in arrears) and so be even more exposed to unfair preference claims by liquidators. From 1 September 20174 this risk exposure will increase: Winding up application filed, VA appointed and winding up order made Lease $60K starts payments received 1 to 24 April May 2018 2018

Post 1 September 2017 and “PPS lease” changed

W/up filed VA Appt’d W/up order made 1 25 20 September November December 2018 2018 2018

Unregistered lessor keeps goods, but rent is voidable payments as within 6 months of w/up filing and no longer a secured creditor for payments received – $60K worse off as previously secured over proceeds

(iv) not be able to take the benefit of enforcing their super priority over proceeds payable by a third party to the grantor. Their sale of secured accounts receivable may therefore be less valuable to buyers of invoices under P2P or other business models; (v) The PMSI holders of operating lease “inventory” will no longer receive notices from a grantor’s invoice financier, and so will need to set up alerts or regularly review customer’s registrations; 5. A buyer of accounts receivable from a lessor, or a customer of a lessor, (which lease was a PPS lease) will: (a) Need to consider processes and documentation to retain priority over future proceeds, and (b) Will need to carefully consider their position as potential unsecured creditors and exposure to unfair preference claims (by the grantor’s liquidator or the end debtor’s liquidator) if suitable documentation is obtained.

*Peter Mills Special Counsel Thompson Geer Lawyers pmills@tglaw.com.au T: (07) 3338 7921 FOOTNOTES: 1 Personal Property Securities Amendment (PPS Leases) Bill 2017 (called “the changes”) 2 Section 267 PPSA and 588FL Corporations Act 3 The Australian Accounting Standards Board made Accounting Standard AASB 16 Leases under section 334 of the Corporations Act 2001: A short term lease [means] A lease that, at the commencement date, has a lease term of 12 months or less. A lease that contains a purchase option is not a short-term lease.

4 Due to changes under the Insolvency Reform Act to the “relation back day” which commence on 1 September 2017

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

31

Software & Technology

Cash allocation and credit management - A VIEW FROM AN OUTSIDER

By Chris Moakes*

Chris Moakes

32

As someone new to the cash allocation and credit management industry I’ve had a very steep learning curve over the past couple of months, but something that has struck me is the amount of businesses where repetitive, manual work is just an accepted part of the process. Where hour upon hour is spent scribbling away and ticking off rows of a spreadsheet, always chasing the next deadline and invariably leaving work to do next month.

I’ve spoken to people in a range of roles who have reached the point where no matter how many people they seem to employ, allocating all of their cash in a day is something they can only dream of, while their unallocated cash continues to grow with the passing of each monthend. I ask them about how their accounting systems deal with this process. In a few cases wry smiles form as they tell me about some very basic automation that these

systems provide, leaving everything but the simplest payments for manual processing. Others meanwhile have accounting systems that are great for the rest of the business, once they have done all the lengthy, repetitive allocating to start with.

The way many credit control teams manage the day to day task of ensuring payments are made when they should be is something else that, once you scratch through the surface of many, is quite basic and lacking in anything more than lots of filters and spreadsheets, reordering accounts in many different ways but lacking the intelligence that says, why call that customer today. It’s obviously important to understand who owes you the most money but should that also be the primary way you attack your ledger and prioritise call lists?

What if those same customers that owe the most are also the ones that always pay on time but a lack of usable data means that there isn’t a simple way to see that?

Where I’ve seen real change and improvement is in the companies that have identified that they have issues and know that there must be a better way.

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Software & Technology

“...something that has struck me is the amount of businesses where repetitive, manual work is just an accepted part of the process. Where hour upon hour is spent scribbling away and ticking off rows of a spreadsheet, always chasing the next deadline...”

Conversation when it comes to credit management often gets onto time and efficiency as there is never enough time for teams to do everything the manager wants. Some people even go as far as to engage in time & motion analysis to understand how the day is used by their teams, many seeing hours spent by credit controllers working out who to call next, checking with the cash team to see if they’ve paid yet as the credit management system isn’t updated or manually collating the information to send a customer a statement they’ve requested.

Where I’ve seen real change and improvement is in the companies that have identified that they have

issues and know that there must be a better way. Organisations who, by adopting the Rimilia Alloc8 Cash system, have seen unallocated cash become a thing of the past and time taken to allocate cash change from weeks to hours; subsequently reducing the size of teams involved in cash allocation and saving money.

Similarly, with Alloc8 Collect working hand-in-hand with the cash system, credit departments are able to have a completely different view of their world, with built-in cashflow forecasting showing which customers will pay without even needing any contact, they are able to focus on the priorities resulting

in a reduction in bad debt provision, savings from ability to email letters and statements from the system and most importantly, collecting more money but from making fewer calls.

From the perspective of an outsider looking in, Alloc8 Cash & Alloc8 Collect by Rimilia is software that needs to seen if you want to be beyond World Class as standard.

*Chris Moakes is Business Development Manager at Rimilia.

Web: www.rimilia.com Email: enquiries@rimilia.com

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

33

Economy

Twenty five is not the limit as long as insolvency risks are hedged

By Chris Doube*

Going forward, economic activity is set to grow by around +2.7% in 2017.

Chris Doube

34

Twenty-five is not the limit but…

In 2016, the Australian economy recorded its 25th year without recession. Markets wobbled in 3Q2016 when real GDP contracted by -0.5% q/q. But anxiety eased when GDP rebounded to growth in Q4 (+1.1% q/q) thanks to a supportive economic policy mix, improved external demand and a better commodity prices environment.

Going forward, economic activity is set to grow by around +2.7% in 2017.

Meanwhile, signs of a cyclical upturn have built up in the first two months of 2017.

Firstly, stronger demand growth from Australia’s main trade partner China and a rise in commodity prices have boosted expectations on exports and industrial performance. Secondly, domestic demand growth is set to remain firm supported by a supportive policy mix. While the central bank and the Australian Prudential Regulation Authority will focus on reducing financial risks, fiscal policy will remain expansionary to keep growth in an acceptable range.

Private expenditure is also set to recover gradually. Households will probably be more cautious on their spending habits due to their high leverage, however private investment is set to recover supported by favorable fiscal policies and rising new exports orders. Against this background, we expect corporate insolvencies to decrease by -2% in 2017 (after -19% in 2016).

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Risks to the outlook remain elevated, though. Domestically, high household debt and high house prices have increased financial vulnerabilities and will probably be the main focus of Australian financial authorities in the short run. Externally, the outlook will heavily depend on China’s economic performance.

All eyes on China China accounts for 32% of Australian goods exports. The Mainland is the biggest market for items including Australian mining, energy and agricultural products. Trade and financial links are on a rising trend with stronger services trade and rising investment flows between markets. In the longer term, ties with the Mainland could further increase with the Regional Comprehensive Economic Partnership.

How China fares will be key In 2017, China’s GDP growth will remain above +6% thanks to strong public support and solid private consumption. Exports and private investment will underperform.

Services will remain the main driver of the economy, while the manufacturing sector will continue to restructure.

Targeted policy weapons will be pivotal to countering external threats The authorities’ ability to support growth through credit has deteriorated. For each RMB1bn of additional growth, there was RMB1.8bn of additional domestic

Economy

credit in 2011. It now stands at RMB3.6bn. As credit was not used to finance productive investments the impact on economic activity has diminished. Investment efficiency has also worsened. In 2016, 6.6 points of capital were needed to generate 1 unit of additional GDP, while in 2005, only 3.5 points were required.

Improving the efficiency of macroeconomic policies will be pivotal in the longer term. First, this will help reduce the reliance on debt.

Corporate debt has increased by an average of 10 points of GDP per annum since 2012. Second, improving the return on investment could help to keep savings and capital in China.

At least USD500bn left the economy in 2016.

As a consequence, authorities are expected to focus on the following five Cs in 2017-18: zz Promote Credibility. Improving investors’ faith in government policies will be pivotal to avoid volatility, maintain adequate capital inflows, and support private investment. Clear communication and a reasonable GDP growth target of +6% ± 0.5pp in 2017 will be key. We expect the economy to expand by +6.3% in 2017. zz Contain Credit risks. Corporate debt accounts for 170% of GDP and corporate bankruptcies are set to increase by +10% in 2017 (+11% in 2016). A tighter monetary stance in 2018 could lead to a gradual deleveraging. Meanwhile, the fiscal stance will remain accommodative to support growth. zz Reduce excess Capacities in the production of basic materials. This task will be tackled through a stepby-step approach. New orders will likely be weak with more protectionist measures overseas and a tightening property market.

But supply growth will likely adjust at a slow pace as authorities prioritise employment over overcapacity reduction. Reforms of

State Owned Enterprises (SOEs) – which are major suppliers – will likely be gradual too. zz Manage the Currency. The RMB could remain at around 7RMB per USD in 2017. Pressures could mount due to a diverging monetary policy with the US, less favorable news, and higher returns on investment abroad. In this context, the authorities may pursue currency internationalisation but at a gradual pace to minimise the impact on growth. They would intervene in Forex markets to limit sharp adjustments of the currency, use temporary capital controls, and initiate tighter regulation to limit the pace of capital outflows. zz Tweak the Commerce strategy.

USD-denominated goods exports decreased by -7.7% in 2016. The US, which accounts for 18% of China’s exports, may increase trade barriers. China will seek new commercial drivers: a price competitiveness boost (Market Economy Status), new customers and new investment revenues (One Belt One Road), strong partnerships and political influence (the Regional Comprehensive Economic Partnership).

Creating its own league to promote and finance growth rebalancing China’s rebalancing has already started to impact sectors and countries around the world. Going forward, established semi-finished goods producers – Hong Kong, Taiwan, Singapore and South Korea – along with longtime industrial commodity suppliers, will continue to feel the pinch. On the positive side, Asia’s low value-added retailers, as well as high value-added Western producers, could benefit from China’s new economic model.

The failed attempt to get Market Economy Status and slated protectionist measures from the US

could mean retaliation and heightened political tensions between the two biggest economies in the world.

The EU and Japan are expected to make concessions to preserve trade relations. As a consequence, China is expected to accelerate its outside influence agenda. (i) The One Belt One Road initiative has already kicked off with projects in Pakistan and East Africa. (ii) An agreement could be reached on the Regional Comprehensive Economic Partnership, a free trade agreement between ASEAN Members, Australia, New Zealand, India, Japan, South Korea and China. And (iii) on the currency front, the RMB internationalisation as a means of payment and as a reserve currency could gather steam in 2017.

Our suggestion Facing severe increases in counterparty risk, a sound knowledge of your customers and the market in which they operate is the critical foundation of any good credit management. Protecting your trade receivables and using professional help in collecting payments will be crucial to boosting your bottom line.

*Chris Doube Australia and New Zealand CEO Euler Hermes www.eulerhermes.com Euler Hermes is the global leader in trade credit insurance and a recognised specialist in the areas of bonding, guarantees and collections. With more than 100 years of experience, the company offers businessto-business (B2B) clients financial services to support cash and trade receivables management. Its proprietary intelligence network tracks and analyzes daily changes in corporate solvency among small, medium and multinational companies active in markets representing 92% of global GDP. Headquartered in Paris, the company is present in over 50 countries with 6,000+ employees. Euler Hermes is a subsidiary of Allianz, listed on Euronext Paris (ELE.PA) and rated AA- by Standard & Poor’s and Dagong Europe. The company posted a consolidated turnover of €2.6 billion in 2016 and insured global business transactions for €883 billion in exposure at the end of 2016. Further information: www.eulerhermes.com, LinkedIn or Twitter @eulerhermes

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

35

Economy

Small Business Risk update: Q1 2017

“Unincorporated entities are often overlooked in common statistics in comparison to incorporated entities”

Key insights from CreditorWatch’s Small Business Risk Review have been released for the first quarter of 2017. The quarterly report is an analysis of aggregated and trade payment data to highlight risk for Australian businesses.

Graph 1 shows the average payment default (by dollar value) registered with CreditorWatch has had a small rise on the back of significant increases over the last five quarters.

Payment defaults often act as an early warning for all creditors.

Struggling debtors are more likely to default on smaller, less critical suppliers before they default on larger creditors. As a result of this, CreditorWatch sees SMEs contributing payment default data up to six months before a larger creditor registers a default and/or commences legal action.

By comparing the graph below

and table 1, we can see that the peak increase during Q3 2016 has translated into an increase in court actions, particularly in New South Wales and Victoria where the majority of court actions take place.

Table 1 shows reduced risk for Queensland businesses after consecutive drops in court actions have been reported for the last seven quarters.

There appears to be a sharp increase in large value court cases in New South Wales, as evidence by the gap between actions and dollar amount in Q4 2016 and Q1 2017. This result was likely influenced by the 206% increase of the average payment default in Q3 2016, as court actions have a higher chance of occurring within 6-12 months of a default being registered.

Like New South Wales, Victoria also experienced a sharp increase in

Graph 1 – Average Payment Default ($ Value)

Colin Porter

36

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Economy

Table 1 – Court Actions and Dollar Amount Quarterly Year on Year (%) Q3 2015

Q4 2015

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Q1 2017

QLD Court Actions

-13%

-1%

-6%

-18%

-50%

-40%

-36%

QLD Dollar Amount

-23%

-14%

-26%

-19%

-57%

-44%

-74%

NSW Court Actions

-5%

1%

-4%

-19%

2%

3%

7%

NSW Dollar Amount

-1%

3%

-4%

-18%

-1%

12%

16%

SA Court Actions

66%

19%

-14%

-2%

-26%

-28%

64%

SA Judgment Amount

123%

20%

18%

108%

-57%

-29%

76%

VIC Court Actions

-27%

-24%

-9%

-4%

-11%

17%

21%

VIC Dollar Amount

-24%

-13%

-5%

4%

-2%

16%

24%

WA Court Actions

73%

98%

99%

42%

175%

113%

32%

WA Dollar Amount

71%

124%

226%

117%

205%

107%

-14%

Data sourced from Australian courts. A slight variation may occur due to time lags in accessing total monthly figures

Table 2 – Cancelled Unincorporated Entities

Quarterly Year on Year %

Cancelled Unincorporated Entities

Q1

Q4 2014

Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016

Q2 2016

Q3 2016

Q4 2016

2017

-35%

-31%

-6%

38%

51%

35%

36%

20%

47%

76%

Unincorporated entities include sole traders, trusts and partnerships

court actions during Q4 2016 and Q1 2017, which has seen a growing negative trend from Q3 2015.

Court actions still remain high in Western Australia though there has been a decrease in the dollar amount of court actions this quarter.

Cancelled unincorporated entities continue to rise The number of unincorporated entities changing status from “active” to “cancelled” continues to soar with a 76% increase during the first quarter of 2017 (see Table 2 – Cancelled Unincorporated Entities). Unincorporated entities make up a siginifant portion of operating businesses in Australia which include enterprises such as sole traders, partnerships and trusts.

According to the Australian Bureau of Statistics1, business entry rates were highest for sole proprietors (18.6%) between June 2015 and June 2016.

However, sole proprietors had the lowest survival rate (51.0%) over a four-year period from June 2012 to June 2016.

Colin Porter, Managing Director of CreditorWatch says “unincorporated entities are often overlooked in common statistics in comparison to incorporated entities (companies).

“The effects of a failing organisation can be felt regardless of the type of entity.

As such, it’s important to get as much information across your entire ledger.

Credit risk information is available on all entity types from companies, to sole traders, trusts and partnerships.”

CreditorWatch CreditorWatch is a commercial credit reporting bureau with over 40,000 customers, from sole traders through to ASX listed companies. CreditorWatch provides credit risk information on any entity in Australia and assists creditors by monitoring and sending alerts for risk indicators that may affect a debtor’s repayment ability.

FOOTNOTES: 1 8165.0 – Counts of Australian Businesses, including Entries and Exits, Jun 2012 to Jun 2016 http://www.abs.gov.au/ ausstats/abs@.nsf/mf/8165.0

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

37

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.

Question

meet its debts (at least until January 2017), particularly if

We had a February 2016 debt paid in December 2016. It

there was an agreement to defer the due date in respect

was for approx. $250K.

of the $250,000 for supplies for the month of February

We are by far this customers largest supplier. We agreed to support him through and were aware that all

2016.

We recommend that creditors who have been asked

of his other suppliers were then able to and in fact were

to extend further credit to a customer with cash flow

being paid up to date. Unfortunately his largest customer

difficulties seek legal advice immediately with a view to

crashed in January and he was left with no choice other

procuring security and otherwise considering ways to

than to move through a VA to Liquidation. Do we face

reduce potential preference exposure in the event a claim

a preference claim noting we have not received an

ever arises.

advantage over other creditors as all were paid on time and now only have their December debt outstanding?

– National Credit Manager MICM CCE

Creditors may also wish to consider increasing prices for future supplies to account for risk of non-payment.

There are many grounds upon which creditors can reduce and defend preference claims. Security interests registered on the PPSR should give liquidators

Answer

considerable pause in pursuing the claims due to the

Thank you for your question.

uncertainty as to how those security interests ought

In short, unfortunately, yes, the creditor in question may face a preference claim.

The question of whether or not the supplier is

to be valued. Further, most of the demands we have recently seen from liquidators have overstated the value of the claims significantly and have failed to give any

“preferred” is assessed by looking at the ultimate return

regard to obvious running accounts. Some demands even

to creditors in the winding up (as a percentage of their

have asserted wrongfully that creditors bear the onus of

debt) as against what the creditor received by reason

establishing the running account.

of the payments. In this case, the creditor has received

For these reasons, we recommend that creditors

payment for all of the debt in full. The aging of the debt

facing demands seek legal advice early before paying

itself is not relevant to the question of whether the

in response to a demand. Legal costs of that advice

creditor was preferred. All debts are considered equally

are often offset by substantial reductions to the sums

in respect of this aspect of a preference action.

claimed.

However, it is not necessarily an easy action for the liquidator. Practically, any liquidator looking to void payments under such an arrangement would need to apply the running account and look at the net effect of the continued trade during the period. The claim is likely capped at the peak indebtedness during the six month period less the debt outstanding as at the date of the voluntary administration.

The creditor may also have a good faith defence to any action brought depending upon the facts and circumstances surrounding the case. You indicated that there was a significant trading relationship between the supplier and the customer, and that the supplier knew that all creditors were otherwise being paid within terms.

In those circumstances, the good faith defence may answer the claim entirely, as the creditor would have no grounds to have suspected that the company could not

38

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

– Rhett Kipps Special Counsel Results Legal Ph: 1300 757 534 www.resultslegal.com.au

Can We Help? aicm

“The necessity that a deed be attested by a witness is a requirement imposed by statute” The failure to properly witness a deed means that the document cannot, at law, be called a deed. That being said, it doesn’t deprive the document of any contractual force it otherwise has. Thus in the present case if two directors witness each other’s signature on the deed of guarantee, the document will not meet the requirements of a deed (except perhaps in Victoria) but provided there was consideration for the guarantee, it could still be

Question

enforceable as a contract as against the directors. Other

Does it void the guarantees if Directors of a customer

factors could also be relevant as to the enforceability of

company witness each other’s signatures on the

the guarantee such as estoppel or misrepresentation.

supporting Deed of Guarantee and Indemnity?

In the present case, the directors may have taken

– National Credit Manager MICM CCE Sydney

to have represented to the credit provider that they would act as surety or guarantors for the debts of the

Answer

particular company. In reliance on that representation,

The necessity that a deed be attested by a witness

the credit provider may have extended credit to the

is a requirement imposed by statute (see below).

company. If the directors subsequently argue that the

Witnessing is not a formal requirement for the validity

deed of guarantee is ineffective due to failure of it to be

of a deed at common law. However, it has long been

properly witnessed, the Court may still hold the directors

the practice for an attesting witness to sign his or her

liable as the guarantee may have induced the credit

name to a deed in witness of the fact that the deed

provider in extending credit. Naturally, estoppel and

has been signed, sealed and delivered. The purpose of

misrepresentation depend on the facts of each case.

the witness is purely evidentiary, i.e. that person can

In short, your practices should include a requirement

be called to give evidence that the deed was signed,

that each director guarantee be witnessed by a non-

sealed and delivered by the particular party if a dispute

party to avoid any argument.

as to execution arises.

The common law requirements have been modified by various statutes enacted in the various States. In NSW for example, s38 of the Conveyancing Act provides: Every deed, whether or not affecting property, shall be signed as well as sealed, and shall be attested by at least one witness not being a party to the deed;

– Joseph Scarcella Partner Johnson Winter & Slattery Ph: (02) 8247 9639 M: 0498 988 067 Email: joseph.scarcella@jws.com.au ww.jws.com.au

but no particular form of words shall be requisite for the attestation. (emphasis added) Similar (whilst not identical) provisions appear in legislation of other states except Victoria; see s219 Civil Law (Property) Act 2006 (ACT), s47 Law of Property Act 2000 (NT), s45 Property Law Act 1974 (QLD), s41 Law of Property Act 1938 (SA), s63 Conveyancing and law of Property Act 1884 (TAS), s9 Property Law Act 1969 (WA). In Victoria there is no requirement that a deed be witnessed under the Property Law Act 1958 (VIC).

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

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aicm Training News Benefits of employee training and development In this issue of the AICM Magazine we explore how to optimise the benefits of training and development, and therefore the resources used to improve performance?

The best place to start is by being clear about what results you want to achieve. Then finish with an assessment of the results that are actually being achieved. It’s also important to remember that the real benefits of employee training should be seen as a progression. That is, where performance improvements in individuals progress to performance improvements throughout the entire organisation.

Knowing how to motivate employees is one of the most important aspects of a manager’s job. But as important is the need to manage the factors that contribute to that motivation, and to create the conditions for people to perform and realise their potential. The below tool will help you achieve these management skills is the PERFORM model. It stands for: zz P – Potential zz E – Expertise zz R – Results zz F – Focus zz O – Opportunities zz R – Resources zz M – Motivation

What are the benefits of employee training and development?

The first thing to remember is that effective employee development is based on a progression of benefits. These

start with improvements in an individual’s performance, which then transfer to his or her localised workplace, which then ultimately result in a positive impact on the whole organisation. The size or scale of that impact is not necessarily important. So long as it is positive and significant.

The next thing to consider is that resources used in the development activity must be used wisely. So, assessing the benefits of employee training is not just about feedback from a training exercise. Such feedback may indicate that people enjoyed the activity or felt it was useful, but managers must look beyond that. Ultimately, the real benefits of employee training are in the transfer of learning into the workplace. Feedback must also assess such things as: what has been learned; how it is being used; what impact it is having at work.

So what are the benefits of employee training? zz New skills and knowledge can be acquired. zz Existing skills and knowledge can be enhanced or updated, enabling people to further improve proven strengths. zz Weaknesses can be addressed or mechanisms put in place to compensate. zz Improvements in confidence, capability and competence. zz Employees feel supported and enabled in their work. zz Learning is progressed to practice in the workplace. zz Learning is used to improve performance at work. zz Learning is shared, enhancing team performance. zz Wider impact in the organisation through performance improvements and the dissemination of information, ideas and networking.

Results How does this relate to the PERFORM model? Performance is about contribution: what an employee contributes that delivers results for the individual, for their teams and for their organisations. So any answer to the question “how to motivate employees to perform?” must include a focus on results. The results that are being achieved and those that are being targeted.

In order to perform, employees need to be clear on what is expected of them. Agree with them what goals they are working towards, give them regular feedback on how they are doing, and show them the results their

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CREDIT MANAGEMENT IN AUSTRALIA • May 2017

aicm Training News efforts are achieving. Results aren’t necessarily just about money and financial targets. They are the outcomes of whatever goals have been set. These can be improvements in process, time-keeping, customer satisfaction, employee satisfaction. Results provide the measure of success, answering the question: how do we know if performance has improved? Only then will we gain clarity about the benefits of employee training.

Results = Development + Performance Placing an emphasis on results helps to connect training and development activities to performance. Of course, effective managers will want to know how well a particular workshop or course has been delivered. However, it’s far more important to assess how the skills and knowledge gained from those activities have been applied. Then, perhaps more importantly, assess the impact they’ve had.

The real benefits of employee training are not necessarily what people learn, but what they do with what they have learnt. The results!

Stay tuned in the next issue of the AICM Magazine; we will explore how to motivate your employees.

Testimonials Helping credit professionals achieve their learning and career goals is in the DNA of the AICM, it is one of the reasons the AICM was formed over 50 years ago and what we strive for every day.

There is no greater reward for our learning services team than when students take the time to let us know what their achievements mean to them.

Perhaps some of the feedback we received in March and April may provide that last bit of encouragement you or your colleagues need to embark on a qualification in credit management.

Finishing the qualification is a huge relief and accomplishment after 3 years.

I’d like to give AICM a big thank you for the support over the 3 years and a special thank you to Toni Sawyer who has been a wonderful facilitator and very supportive through the whole process.

Also, just a heads up, I take on the Credit Managers role here at Rushmore in July after my current Manager, Dennis retires. So this Diploma has been well and truly worth it.

Ann Brennan Credit Controller Rushmore Distributors

Toni, Thank you very much. And many thanks for your ongoing help and support during my studying, which ran fast and smoothly. Thank you for your professionalism, high competence and vast knowledge. It was a pleasure to work with you :) Anastasia Khayrets Reconciliations and Collections Coordinator BASF Australia Ltd

I have been a part of the AICM membership for many years undertaking various units of study at certificate & diploma level, attended seminars and social functions.

I thoroughly enjoy the online training because the flexibility is a great fit for my busy schedule, it’s easy to navigate, the forums present stimulating insights from other credit professionals, the Lecturers have exceptional credit knowledge giving prompt feedback to questions delivering a wellrounded a support system.

I certainly recommend and try to attend as many breakfast seminars and functions as I can, they are a valuable learning resource with Guest Speakers imparting important, relevant industry changes.

Thanking all staff at AICM! Kelly Dunlop Debt Recovery Officer Capricorn Society Limited

Studying my online course with AICM was a pleasant experience. The website is easy to navigate and set out great. The staff were always happy to help and got new subjects open quickly. And the trainers are always there to answer any questions. Thoroughly enjoyed it. Thanks AICM. Elisha Dosser Credit Controller Dynamic Supplies Pty Ltd

Everything you were teaching me at my previous employer is very relevant in my new position I am very grateful for what you have taught me so far!

Patricia Eastcott Accounts Receivable Officer Central Pet

May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

41

aicm Training News Recent graduates In-House Training

Statement of Attainments issued: Bruce Hort Caroline Tataru

NSW

FNSCRD502 Manage factoring and invoice discounting arrangements

WA

FNSCRD502 Manage factoring and invoice discounting arrangements

Allison Parry

NSW

FNSORG502 Develop and monitor policy and procedures

Anja Bonnard

WA

Michael Pearse

NSW

FNSCRD401 Assess credit applications

Michael Pearse

NSW

FNSCRD504 Manage the credit relationship

Yamaha Australia BOC Baiada Australia Scottish Pacific

FNSCRD501 Respond to personal insolvency situations

Qualification Issued FNS51515 Diploma of Credit Management Tracey Da Silva Anastasia Khayrets Antonietta Brennan

FNS40115 Certificate IV in Credit Management Angela Mc Causland Michael Allen Laurie Beltran Eilisha Dosser Cheryl Mc Pherson

Save the dates for training: Melbourne:

Sydney:

21st July – Dealing with Customers (E,4) 22nd & 23rd August – Manage Factoring and Invoice Discounting (E,D) 24th August – Assess credit applications (C,4) 12th September – Manage Organisational Change (E,D) 13th September – Manage risk (C,D) 26th October – Resolve disputes (C,4) 8th November – Establish and maintain appropriate security (C,4) 9th &10th November – Manage Factoring and Invoice Discounting (E,D)

11th July – Dealing with Customers (E,4) 15th & 16th August – Manage Factoring and Invoice Discounting (E,D) 17th August – Assess credit applications (C,4) 5th September – Manage Organisational Change (E,D) 6th September – Manage risk (C,D) 18th October – Resolve disputes (C,4) 15th & 16th November – Manage Factoring and Invoice Discounting (E,D) 17th November – Establish and maintain appropriate security (C,4) 5th & 6th December – Legal Compliance (C,4,D)

Brisbane: 7th July – Dealing with Customers (E,4) 8th & 9th August – Manage Factoring and Invoice Discounting (E,D) 10th August – Assess credit applications (C,4) 19th September – Manage Organisational Change (E,D) 20th September – Manage risk (C,D) 6th October – Resolve disputes (C,4) 21st & 22nd November – Manage Factoring and Invoice Discounting (E,D) 23rd November – Establish and Maintain Appropriate Security (C,4) 12th & 13th December – Legal Compliance (C,4,D)

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Table of Explanation: C = Core Unit D = Diploma

E = Elective Unit, 4 = Certificate IV

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

To speak to AICM about these or any other learning or development, call 1300 560 996 or email andrew@aicm.com.au or debby@aicm.com.au

New South Wales

AICM CEO Nick Pilavidis presenting on Tough Collections.

President’s Report It’s that time again for another report, seems like only yesterday I was wishing everyone a Happy New Year. Easter and Anzac Day have now also been and gone. A timely reminder to thank all of our servicemen and women for the sacrifices they made.

My Seven year old daughter Elysha asked if she could come to the dawn service with me this year, I was very proud of her and shows me this special day in our calendar is in safe hands.

We have had a couple of very successful events since my last report with a breakfast seminar for “tough collections with top customers” presented by AICM CEO Nick Pilavidis and hosted by Curwood Lawyers. We also had a wine tasting night in Parramatta hosted by Deloitte, both event reports and photos are following this report.

We have a busy couple of months in front of us now with the credit toolboxes, trivia night (sold out in record time with 130+ attending), Golf Day, Master Class and YCP dinner.

Keep your eye out for the flyers for these events to avoid disappointment. With our increasing numbers at events we are looking at bigger venues already for 2018.

We are fast approaching the big birthday bash of the AICM turning 50 this year, hope you are all planning to get those costs approved for the conference in Canberra in October, it’s going to be a huge celebration. I am booked in already on the super early bird, don’t forget to look out for these special offers for early registration.

A big thank you to our National Partners, Divisional Partners, Supporting sponsors, Professional sponsors and also our event supporters, your continued support of the AICM is very much appreciated and as I say at all our events, please visit these great companies’ websites, they offer fantastic services/ products and are genuine leaders in their corresponding fields.

Thank you to my council for their tireless work behind the scenes, just a great team of dedicated people.

And finally to all our members, without you we would not be here, keep providing us with the feedback and we will endeavour to continue to put on top quality events with fantastic speakers.

I look forward to seeing you at an event soon.

– Col Magee

Full house at Tough Collections breakfast.

City Breakfast – TOUGH COLLECTIONS WITH YOUR TOP CUSTOMERS Curwoods Lawyers hosted a full house for this sit down breakfast spread, with 40 credit professionals and lawyers arriving early in Australia Square. AICM CEO Nick Pilavidis delivered the paper, providing all in attendance with valuable insights drawn from Nick’s many years’ experience in credit.

The truth is that your company is meant to be the customer’s supplier of goods and services, not their financier as well. The key message communicated was how it is possible at the same time to maintain customer relationships while getting payments back on track. Nick also drew on the approaches used by some big players such as Onesteel, Metcash and DHL. Thanks to Nick for taking the time out to prepare and present. Also to Vaios Kortikis, Michael Peet and Justin Randall for their involvement in preparation of the paper.

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43

AROUND THE STATES

NSW Councillor and Partner at venue host Curwoods, Sam Pearlman welcomes attendees to the Tough Collections breakfast presentation.

AROUND THE STATES

New South Wales

Events Calendar

Monday 15 May 2017

Credit Toolbox 1

Thursday 18 May 2017

YCP Trivia Night – SOLD OUT WINDSOR ON THE PARK

Thursday 22 June 2017

Half day Master Class

KIRRIBILLI CLUB, MILSONS POINT

Thursday 22 June 2017

YCPA Dinner

Paul Clarke – Trace Personnel, Grant Morris – Southern Steel, Sev Indrele – Coates Hire and Colin Magee – NSW Division State President, CFMG Group enjoy the wine night.

KIRRIBILLI CLUB, MILSONS POINT

Tuesday 11 July 2017

Evening Seminar The customer is not the problem, you are CITY

Friday 18 August 2017

WINC Luncheon 8-11 September 2017

Online CCE Exam – ONLINE Tuesday 12 September 2017

Court procedures and mock court hearing CITY, DOWNING CENTRE

Tuesday 10 October 2017

National Golf Day CANBERRA

11-13 October 2017

AICM 2017 National Conference Join us at the QT Canberra for the biggest credit and finance event of the year CANBERRA

Thursday 16 November 2017

YCP Barefoot Bowling NEUTRAL BAY

Thursday 7 December 2017

Pinnacle Awards VENUE: TBC

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CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Angela Sarkis – Baycorp, Sarah Cornelius – West Recruitment and Dermot Ormsby – CFMG Group.

Wine Tasting Night On 29 March 2017, the AICM along with the generous support of Deloitte, hosted a Wine Tasting networking event in Parramatta.

Robert Stein winery showcased their award winning wines from the Mudgee Valley region in NSW. Attendees networked with their fellow wine loving associates, whilst their palates were taken on a sensory journey from sparkling wine, to white wines to the fuller body reds.

The favorite amongst the AICM was the 2016 Riesling, which has received two gold medals at the Cowra Wine Show and NSW Small Winemakers Show.

The event attracted an equal proportion of members and non-members which is result of the hard work NSW Council are devoting to expanding AICM’s membership portfolio.

Thank you to Michael Billingsley (Partner) and Ruby Montilla (Senior Analyst) from Deloitte’s Restructuring Services team for partnering with the AICM to facilitate such a well-received event.

New South Wales

COUNCILLOR BIO

Ellen Singleton – Onguard, Ruby Montilla – Deloitte, Trudi Yip – Numeric Eight and David Mansfield – Deloitte.

The Australian Institute of Credit Management welcomes our Partners for 2017.

Susan Day MICM CCE I have been involved in credit for around 35 years, I’ve held various roles predominantly in the FMCG industry.

To this day I’m continually challenged, one thing is certain, if you want to be a leader in your profession or industry, you need to continue to learn every day. My major highlights include centralising the Credit function to head office and rolling out a National ERP system and amalgamating shared services. There is no doubt that completion of my AICM Diploma in Financial Services, gave me a strong foundation to achieve these major projects.

I’m a firm believer of continual professional development.

Being a member of AICM improves my ability to develop personally which in turn helps me develop team members skills as well as implement effective change and improve efficiencies.

I volunteer as a Councillor because I’m passionate about my career and truly believe that the AICM is the ideal organisation to work on professional development and I personally know how effective their training methods can be.

Being on the NSW Council and WINC committee has been such a highlight. In a short time, we have developed a national platform that improves the role of women in credit.

I’m an ardent AICM supporter of this iconic organisation. As a volunteer, I want to make sure we provide, guidance, access and mentor the next generation of credit professionals. The value I’ve gained is abundant, I have had so many opportunities to attain higher skill levels and have met the most wonderful people who I consider great mentors as well as great friends.

Contact Sue at: sday@manassen.com.au CLICK HERE to view Sue’s comments on the AICM National Conference

National Partners

Divisional Partners

Professional Partner

Official Division Supporting Sponsors

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

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45

AROUND THE STATES

Thomas Arcardi – CreditorWatch, Gordon Chan – Deloitte and Luis Ormazabal – BBW Lawyers.

AROUND THE STATES

Queensland

Michael Peet presenting.

Dale Hannan, Alexandra Croce and Nathan Wilkinson of National Collection.

Presidents report We’ve had a really busy time since I last wrote with a number of well attended events On 8 March, long term member and past NSW President Michael Peet shared his knowledge on outsourcing the receivables function to an eager audience.

Our trainer Toni Sawyer ran Toolbox 1, Fundamentals of Credit with the participants all indicating how useful the information will be in their daily roles.

In April we held two well attended events. The first was part of a National Roadshow that the AICM has developed where Michael Peet again presented the topic “Tough Collections with Top Customers”. Much discussion was held between the attendees on the difficulty of interacting with large customers without causing irritation.

On 21 April we held a Youth Network Night with the support of Dun & Bradstreet with over 40 keen trivia aficionados.

The purpose of the night was to give attendees insight into the Young Credit Professional award and to encourage nominations.

CREDIT TOOLBOX SERIES I urge all members to consider sending their teams to our revamped credit training which includes three core sessions that give new team members an introduction and existing team members a refresher. Attendees have given strong positive feedback. Our councillor Decia Guttormsen of University of Queensland had onsite training and was very impressed with 46

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Peter Mills of Thomson Geer, Michael Peet and Ravina Krishna of CreditorWatch with Roger Masanvu.

Dale Hannan receiving his CCE certificate from QLD State President Roger Masanvu.

their learnings. Please check in with the office, Decia or me if you’re interested in learning more about this exciting training opportunity.

– Roger Masamvu QLD Division State President

We need your history 2017 is the 50th year since the incorporation of AICM. In 1967, the AICM became a national company and we’ve seen enormous growth. I’m on the trail of gathering information to put together a presentation for National Conference, which this year is in Canberra 11 – 13 October.

I have discovered why the name changed from the Institute of Credit Men in 1967 to the name used when incorporating the Australian Institute of Credit Management. The reason was to encompass the evolution of the work force as more females became prominent in credit management roles. I am delighted to notice that we females have been actively involved in AICM, attending professional development events, taking positions on council and ensuring the in-house teams are kept up to date with qualifications offered by AICM. I’ve found Queensland’s first lady President was Dorothy Ghan (apologies if I have misspelt), but am unable to locate anyone who can tell me anything about this period of time when Dorothy was President in the 1970’s. I have also found Queensland’s first ‘Fellow” was also female.

I have also caught up with Robert Burns who regaled stories of a medieval costumer dinner and the state conference on

Queensland

– Toni Sawyer LICM

AROUND THE STATES

the train. Have also spoken with Faye Whiffin who has kindly begun to supply photographs. Warwick Ballantine-Jones has supplied copies of all magazines back to the late 1970’s, so have some reading ahead of me to put together a synopsis of our Queensland history. I am also in the process of organising a visit to Marion Hintz to draw on her extensive memory of those years.

Should anyone have a story to tell or in particular photographs that would help us create our history, please email me on toni@aicm.com.au.

I’d love to hear from you.

Events Calendar

Monday 15 May 2017

Credit Toolbox 2

Collection with confidence Friday 26 May 2017

CCE Breakfast

A breakfast for CCE members with Matt Toomey Tuesday 13 June 2017

Events

Credit Toolbox 3

Thomson Geer hosted 28 AICM members for the second of two seminars with Guest Speaker Michael Peet, Owner of Inspired Credit Management and former VP Global Head of Collections at Deutsche Bank DHL Express. This seminar was on “Tough Collections with Top Customer’s”, for which Michael provided insights about how DHL Worldwide dealt with this tricky issue.

Michael’s strategic programme, “Tough Collections with Top Customer’s” proves that with clear direction and a specific project team, any company can have customers paying within the agreed payment terms.

– Stacey Woodward

Understanding credit risk Wednesday 14 June 2017

Evening Seminar (HR) Creating a high profile team Friday 21 July 2017

YCP Dinner and AGM Divisional winner of the Young Credit Professionals Announced Wednesday 9 August 2017

Evening Seminar The Australian Institute of Credit Management welcomes our Partners for 2017.

Friday 11 August 2017

QLD Annual Golf Day Prepare to tee off for the annual golf day!

National Partners

Friday 25 August 2017

Women In Credit Luncheon (WINC) 8 – 11 September 2017

Online CCE Exam Become a Certified Credit Executive Wednesday 13 September 2017

Youth Credit Community Event

Divisional Partners

Bowling Night 11-13 October 2017

AICM 2017 National Conference Join us at the QT Canberra for the biggest credit and finance event of the year CANBERRA

Friday 24 November 2017

Official Division Supporting Sponsors

Pinnacle Awards Celebrate Credit Professionals who have excelled in 2017

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.

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47

AROUND THE STATES

South Australia

All attendees.

Suzi O’Connor and Josh Richards.

President’s Report

national and state winners of this prestigious award who attend these functions. We sincerely thank them for their continued support of the AICM. Councillors have worked very hard to gain speakers ‘with a difference’! Politics is one of those topics that everyone is unsure to touch on, but we are have some great speakers that you will either love or hate to hear/see! We believe it is important to hear what is happening behind the closed doors of parliament. Opinions are important and what is happening within the political world has a big effect on our economy and the credit industry. Look out for the speakers we have lined up and we hope you can come along and get ‘close and personal’ with some of our states strongest and most enthusiastic politicians.

I invite our Business Partners to come along and represent yourselves at our events during the year ahead. Take every opportunity to inform our members and attendees of what is happening within your professional field. We are proud to be in partnership with you.

Look forward to seeing everyone throughout the year. We are always here to discuss your thoughts on what you would like the SA councillors to present for you.

See you soon.

Here we are entering into May. We all wonder where the months have gone and try to keep up with this crazy fast pace of life. Cooling down for what is predicted to be a bitter winter, we are still blessed with beautiful autumn weather that keeps us motivated to enjoy the outdoors for a little longer!

SA councillors have already had some brain storming meetings that rev us up for an exciting year of educational and social events.

Our second event for the year, a half day seminar held at the superbly positioned premises of Jones Harley Toole, in the Adelaide CBD, gave wonderful natural lighting and spectacular breathtaking views of the city, hills, and extending out to the coast. This could only add to the high calibre of the presenters.

All attendees would have left with good takeaway’s to help with their day to day roles and also share with their colleagues.

We will be holding our annual Winter Warmer evening in May. This gives everyone a chance to meet our YCP candidates and share some of the experiences of our previous winners who are very generous in giving their time and knowledge to the youth of the credit industry. We are proud to have several

Events Calendar

18th May 2017

YCP Networking Night 16th June 2017

Women in Credit Luncheon 8th – 11th September 2017

CCE Exam

11-13 October 2017

AICM 2017 National Conference

Join us at the QT Canberra for the biggest credit and finance event of the year CANBERRA

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CREDIT MANAGEMENT IN AUSTRALIA • May 2017

– Gail Crowder SA Division President

Half Day Seminar April was a particularly busy month with Easter celebrations and Anzac day memorial; however we managed to squeeze in a half day seminar at the start of the month; Contemporary Strategies to Manage Credit Risk and Improve Cash Performance.

We were privileged to secure Darryl Gobbett, Chief Economist and Financial Advisor who shared some thoughtprovoking insights into the global economy including the Trump factor, some futuristic views on where Australia’s economy is headed together with specific implications for South Australia.

Darryl has a wonderful way of speaking in a very engaging way on a particularly dry topic.

Next we heard from Suzi O’Connor on the fundamentals of Credit Risk Management followed by two panel discussions; the first introducing the benefits of Debtor Financing and Credit Insurance by a most knowledgeable panel consisting of Andrew Kelly, Rachel Sedgman and Sarah Mrotek and the

South Australia

Darryl Gobbett, Baillieu Holst Ltd.

second panel; Technology for Credit Management led by Hamish Osborn, Matthew Brennan and Candice Kerwin. The electronic, automated credit application approval process including decision flows certainly gave pause for thought. It’s clearly an effective way of fast tracking new account application processing at a time when we’re all under pressure to improve efficiencies.

It was a solid afternoon of information gathering and learning, capped off by a relaxed networking evening with attendees, complimented by a glass of wine (or two) and delicious nibbles. The feedback from many of the group was very positive so stay tuned for the second seminar which will be held later in the year.

We encourage all members to submit topics they would like explored through seminars and workshops as we want to ensure your needs are satisfied.

with our guest speaker being Cory Bernardi, the leader of the new Australian Conservative Party.

To top off a busy 4 month period we will hold our Annual Awards night in later August (date and venue to be confirmed) including the announcement of this year’s State YCP winner.

So we are in for a busy social period for the SA division.

Please keep a look out for the flyers advertising these functions. We look forward to seeing you at these events.

– Suzi O’Connor Professional Development

– Trevor Goodwin and Gail Crowder Functions Committee

The Australian Institute of Credit Management welcomes our Partners for 2017.

National Partners

Functions Stay tuned for a number of events the South Australian division has planned between May and August. The functions committee has been busy in organising these events to provide opportunities for members and their colleagues to meet on a social basis and to chat with fellow credit professionals.

The first function is a networking night to be held at the Maid Hotel on Thursday May 18th. These evenings are always enjoyable nights and The Maid provides an excellent venue to mingle and relax. At this event we will be promoting the YCP award and we encourage younger members to attend, and managers to encourage their younger staff to attend to hear what the YCP Award can offer.

June will be a busy month for our division with two events planned. The first is Women in Credit luncheon to be held at the Playford Hotel. This follows on from the success of the Women in Credit event held for the first time in June 2016. The second event planned for June is the annual Quiz night which will be held at the Unley Community Centre on Friday 23rd.

The Quiz night is always a fun night and provides opportunity to win a number of raffle prizes donated by our loyal corporate supporters.

In July (date to be confirmed) we will hold what will be an interesting breakfast function at the Next Gen Memorial Drive,

Divisional Partners

Official Division Supporting Sponsors

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 2017 • CREDIT MANAGEMENT IN AUSTRALIA

49

AROUND THE STATES

Hamish Osborn, Creditworks, Matthew Brennan and Candice Kerwin, Equifax.

AROUND THE STATES

Victoria/Tasmania

Toolbox 2 (LtoR) Debbie Collins (Butler Plumbing), Tania Carboni (Gunnersen Pty Ltd), Lois Allgood (PFD Foods), Naya Rizan (Realestate.com.au), Dominique Franco (Realestate. com.au), Paula Joynson (Chef’s Hat Australia), Kelly Poulton (Adidas Australia) and Liam Jenkins (Adidas Australia)

Neil Smith presents Toolbox 2 Collect with Confidence (LtoR) Debbie Collins (Butler Plumbing), Annabel Schulze (PMP Limited), Kelly Poulton (Adidas Australia), Paula Joynson (Chef’s Hat Australia), Lois Allgood (PFD Foods), and Tania Carboni (Gunnersen Pty Ltd)

President’s Report

candidates and I expect this to be the same for 2017. So please get your applications in soon. We will see the Vic/Tas winner in Canberra at the National Conference in October.

And finally if you have ever thought of really getting involved on the AICM Vic/Tas Council, now is the time. Election of your state councillors will be held in July (just before the YCPA dinner) so please take the step and join a dedicated group of likeminded credit people working on ensuring all members have a say on how or what you want from the AICM. Take care and we are looking forward to seeing your name/s on the attendance list for the Conference in Canberra (October 2017). Remember it’s our 50th Anniversary and the President’s Dinner is in the Great Hall of Parliament House!

There are been once again a number of well attended events organised by your Vic/Tas division and I would personally like to thank all. Without your backing/attendance/ongoing support we would simply not be able to hold these great events.

The Credit Tool Box sessions were started to provide a stepping stone for those wanting to understand in a little more detail the Credit function. We’re very pleased with not only the number of people enrolled but the quality of the presenters.

These sessions will be run regularly so if you missed out on the last sessions, keep checking your emails for the updated calendar.

As always our network sessions are another great way to keep in touch with your fellow credit associates whilst keeping up to date with a variety of different topics from the latest court decisions on the PPSA to Customer Service trends etc.

So I once again encourage you all to join us at one of these networking nights or Breakfasts – our next one in the series is on the 18th May at the Park View St Kilda Road where the topic is Customer Service. Over the past few months these network functions have seen an increasing number of new faces which is very pleasing…

I congratulate those members who have recently join the increased ranks of those sitting for their CCE qualification – well done. To those who are still undecided about this I urge you to contact our Vice President and CCE Chairperson (Sherif Hussein) and enquire about when the next exam is being held.

Our full day seminar held near the end of April was another great event with a top line up of presenters – whilst numbers were a little down mainly due to the Easter break the subjects covered were well appreciated by the attendees and more of these sessions will be held in the future – again I suggest you look out for these events, truly worth the money.

Our recent WINC luncheon (3rd in the series) held at the Crown Melbourne was from all accounts the best so far.

Speakers kept the audience entertained and again I pass on my thanks to the organising committee for all their effort over the past 8 or so months. These functions (as you can no doubt understand) take an enormous amount of time and effort. So to all we thank you and look forward to seeing what you organise for the next WINC luncheon in 2018.

YCPA is the next item on our busy agenda with applications now open. In the past this division has had some outstanding 50

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

– Lou Caldararo Victoria and Tasmania State President

Network Event 16 MARCH 2017 – THE VALUE OF STAFF REVIEWS Held at the Park View Hotel, members and guests attended the March Network Event where Joe Pannuzzo, a business services and transformation investigator for WorkPlace Plus delivered an excellent presentation on the value of staff reviews.

An informative presentation where Joe shared his views on staff reviews, expressing the importance of keeping communication strong, and keeping everyone on the same page and aligned to company, team and individual goals.

It was pointed out that the purpose of the review process is to develop, reward, and retain employees. Everybody hates them but Joe demonstrated they are an essential part of the ongoing development of any strong business. Thank you Joe for donating your time for the education and betterment of our members.

AICM’s Toolbox Series A WINNER WITH CREDIT PROFESSIONALS! Vic/Tas Council has successfully delivered the first three (3) Modules of the Credit Toolbox Series. Toolbox 1 (Fundamentals of Credit) covers Legislation Overview, Legal Entities, Procedures, 5 C’s of credit, and Warning signs;

Victoria/Tasmania

Toolbox 2 (Collect With Confidence) covers Making the call, Documentation, Securities, When, why and how to make a call, Best practice for all call types and Toolbox 3 (Understanding Credit Risk) covers What is Risk Management, Areas of Risk, Assessing the Risk, Fundamentals of Managing Risk, and Managing the Risk.

Feedback is very positive for this ongoing education aimed at those who want to understand the whole credit picture.

The sessions are fun, informative and interactive encouraging students to ask questions during the presentation to get the most from their studies.

We express our gratitude to Austral Mercantile, Sharp & Carter and Equifax for sponsoring these events, providing space for the sessions and supplying breakfast to our students. Thank you so much for your support it is greatly appreciated.

For those interested in the Toolbox series register your interest with AICM National Office, and just so you know the AICM offers a variety of other courses both face-to-face and online for those interested in further educating themselves in the changing realm of credit.

Go to the AICM website for information on upcoming events and courses CLICK HERE.

Full Day Seminar 20 APRIL 2017 – THE CREDIT PROCESS Members and guests enjoyed the Full Day Seminar in April hearing from several knowledgeable and experienced speakers delivering on the Credit Process. Lou Caldararo (Spicers) covered the importance of the credit application and credit process to increase cash flow and identify potential bad debt, Donna Smith (Reliance Recoveries) covered the collections process, Tim Holden (Foremans Business Services) covered Understanding Financial Statements, Frank Gambera (McMahon Fernley Lawyers) the Legal Process and Robyn Erskine (Brooke Bird) on what to do when Administrators or Liquidators are appointed.

A small but very enthusiastic group of participants enjoyed a lively, informative and interactive day, and they need to be congratulated for investing in themselves for their future and the future of the credit industry. Thanks to all the speakers for donating their time and expertise, without your support we could not hold events like these.

Frank Gambera (McMahon Fearnley Lawyers) and Jessica Prouse (PFD Food Services) at the Bankruptcy Network Night.

Networking at the VICTAS WINC 2017

Network Event 20 APRIL 2017 – BANKRUPTCY THE PROCESS EXPLAINED Approximately 15 members and guests attended the April Network Night where Frank Gambera, Lawyer with McMahon Fernley Lawyers delivered an interactive session on the Bankruptcy Process. Frank delivered on the enforcement process, appointment of a Trustee, settlement of the debt, Sequestration orders, the benefits of commencing proceedings to enforce recovery of a debt, and issues to watch out for in taking such proceedings. Thank you Frank for donating your time and expertise for this network event.

Women in Credit Business Luncheon 4 MAY 2017 Over 100 credit professionals and their guests attended the |Vic/Tas Divisions Women in Credit (“WINC”) Business Luncheon, held at the Crown Casino Melbourne. The WINC initiative has been established by the AICM to provide informative and career development opportunities to women at all levels and ages. These events have been developed out of a growing need to focus on the specific challenges women face in the Credit Industry.

It was great to see quite a few men in attendance because the event is not strictly for women; it is important for men to recognise the contribution that women make to our industry May 2017 • CREDIT MANAGEMENT IN AUSTRALIA

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AROUND THE STATES

Full day Seminar: Tim Holden (Foremans Business Services) presents on Understanding Basic Financial Statements.

AROUND THE STATES

Victoria/Tasmania

Events Calendar

VICTORIAN EVENTS 18th May 2017

Network Breakfast – Customer service 6th June 2017

Half Day Seminar

EDX – getting PPSR right Turks Legal – unfair preference defenses

WINC: First speaker of the day Aasta OConnor (AFL).

15th June 2017

Network Event – Small debt collections 7th July 2017

CCE Breakfast A breakfast for CCE members 13th July 2017

YCP Awards Dinner Divisional winner of the Young Credit Professionals Announced 17th August 2017

Network Event Telephone collection techniques 7th September 2017

Half Day Seminar See you in Court!

8th – 11th September 2017

CCE Exam Online exam 20th September 2017

Network Breakfast Negotiations techniques 11-13 October 2017

AICM 2017 National Conference Join us at the QT Canberra for the biggest credit and finance event of the year CANBERRA

27th October 2017

Trivia Night – Telephone Techniques 10th November 2017

CCE Breakfast – A breakfast for CCE members 17th November 2017

Network Event Working with difficult customers 1st December 2017

Pinnacle Awards

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CREDIT MANAGEMENT IN AUSTRALIA • May 2017

WINC: Second Speaker Yolander Vega (AWCCI)

and support then in furthering their careers. We thank everyone who attended for their interest and involvement in the day.

From all accounts the venue setting was excellent, the food delivered timely, was delicious and warm, so thank you to Crown for their excellent service and hospitality.

The room was buzzing with excitement as many took advantage of the networking available before the speakers and sit down meal, happy to have a chat and swap business cards.

It was great to see a number of first time attendees to the event, there was a fantastic vibe.

A superb introduction was delivered by our MC’s and premium sponsors for the day Equifax, who showed their dedication in supporting women in credit and the contribution and standing of women within the credit industry as a whole.

Thanks also to our supporting sponsors Results Legal and NCI Trade Credit Solutions. All funds raised from the event went to the McGrath Foundation.

Our first speaker Aasta O’Connor was inspirational. Growing up on Queensland’s Sunshine Coast playing footy in boy’s teams for the North Shore Jets made her very competitive and provided a good foundation for her current role working with AFL. Aasta commented that every woman is strong and beautiful as her motto is “Strong is the new beautiful” which also resonated with the group. Her message is clear and simple, be strong and believe in yourself. She imparted that it does not matter who or what you are, you can achieve any goal with the right support and determination.

Our second speaker Yolanda Vega, Executive Director of the Australian Women Chamber of Commerce and Industry

Victoria/Tasmania

Debbie Leo (General Manager Sales, Equifax) opens WINC 2017

Debbie Leo. We truly thank you for a great effort in again organizing this event; an immense amount of work goes into organizing these events, so thank you all for your tireless work and contribution for the success of the WINC Luncheons.

Inspirational Quote “On my own I will just create, and if it works, it works, and if it doesn’t, I’ll create something else. I don’t have any limitations on what I think I could do or be.”

– Oprah Winfrey, Media Mogul

Sherif Hussein (CCE Chair) Presents newly accredited CCE’s Amaran Navaratnam (REA Group) Catrina Galanti (QBE) and Mary Petreski (Baxters Foods)

(“AWCCI”) was equally inspirational. She spoke of coming from a European (Non-English speaking background) and the challenges that presented being raised in English speaking Australia and how she too has struggled in life and throughout her career. Her story resonated with many and for Yolanda to open up about her struggles, including the loss of a child, was a gift for all of us. It was valuable to know that a really successful woman has faced struggle and adversity and she imparts upon us that anything can be overcome with passion, determination and a never give up attitude. Thank you for sharing your story and the day with us.

A special thanks to our major sponsors for the event; Results Legal and NCI, and for the other companies who supported with raffle prizes and items for the Goodie Bags; AMPAC Debt Recovery, QBE, Scalzo Foods, Sirena Tuna, Parkview Hotel, Southern Golf Club, Cor Cordis, Sanitarium, Red Nose Hair Salon, Love Intimo, Baxters Foods, Asaleo Care, Transurban, NewsCorp, Art Series Hotel Group, Good Life Health Clubs, New Balance, REA Group, Fitness First (Richmond), Bostik Smart Adhesives, Hyatt Melbourne, Sharp & Carter and Equifax, without who’s support we could never hold events such as these, our gratitude cannot be measured in words, but thank you for your outstanding contribution to this event.

Lastly I want to thank the committee for their efforts in putting this event together; Sherif Hussein, Mary Petreski, Amanda Borland, Lou Caldararo, Jeff Hurst, Catrina Galanti, Prudence Chang, Tiarne Bennett, Anna Taylor, Meg Pillai and

The Australian Institute of Credit Management welcomes our Partners for 2017.

National Partners

Divisional Partners

Professional Partners

Official Division Supporting Sponsors

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

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AROUND THE STATES

Members and Guests at WINC 2017

AROUND THE STATES

Western Australia/Northern Territory

Attendees listening to Alan Langford, chief economist at Bankwest.

Lisa Marr presents Rowan McClarty with his CCE certificate.

WA State President Lisa Marr with speaker Alan Langford.

President’s Report 2017 is a celebratory year for the AICM. We welcome the 50th anniversary with much excitement.

50 Years illustrates strength, stability, determination and ongoing vision.

The WA AICM Credit Community has been part of this change and strength and we look forward to being part of its future.

The year began well here in Perth. Our council meetings have focused on planning events and activities for our members in 2017. We may not be the biggest member base but our members do appreciate the quality of events we host for them in this state.

We celebrated our second Barefoot Bowls Event in February with 50 eager participants. The night was a great success and we crowned new WA Credit Community Champions in Ferrier Hodgson. Capricorn Society were determined to defend their crown as premier bowlers but on the night were pipped by a few good bowls as the sun set. We look forward to next years’ event with much anticipation.

On a more formal note, we thank The West Leederville Sportsman Club for hosting us and Baker’s Delight Joondalup in conjunction with Austral for donating the evening’s BBQ requirements.

March allowed us to reflect on the possibility of change.

The 11th March saw the result of a much anticipated State Election. The mood of the electorate was made clear to the Barnett Government. Again, our members, wanting to get in on the ground floor made time for Alan Langford’s discussion on the economy assessing the wider result of the election. The 54

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Lisa Marr presents Troy Mulder with his CCE certificate.

newly elected Trump garnered a brief mention, however all ears where curious to how the McGowan Government plans to govern with a reduced GST income and no new taxes. This change needs to be viewed with caution.

We welcomed three new CCE’s to the ranks in WA. Raff Di Renzo, Rowan McClarty and Troy Mulder all passed the newly established “classroom setting” of the exam. As a Councillor and President, I highly recommend checking with national office on your point statuses and nominating for the next sitting in September.

As the middle of the year approaches, we look forward to finding our next Young Credit Professional. Are you the 2017 Winner and don’t know it yet? If you believe you have what it takes, we would like to meet you! Nominations are open – put yourself in the mix – make the call today.

– Lisa Marr WA Division State President

Around the states – WA On 24 Feb 2017 the WA Credit Community held our annual Barefoot Bowls competition at Leederville Bowling Club. It was a balmy Perth evening and the event was a huge success, with the team from Ferrier Hodgson being crowned 2017 Champions!

CLICK HERE for all the photos of this event.

Western Australia/NT AROUND THE STATES

Events Calendar

9th June 2017

Women in Credit Luncheon 14th July 2017

YCPA Dinner August 2017

Breakfast club Lisa Marr presents Jason Lewis of BGC with his 20 year pin.

September 2017

Golf Day

October 2017

Breakfast Club

11-13 October 2017

AICM 2017 National Conference Join us at the QT Canberra for the biggest credit and finance event of the year CANBERRA

December

Goodbye to 2017 Sundowner Lisa Marr presents Raff Di Renzo with his CCE certificate.

The Australian Institute of Credit Management welcomes our Partners for 2017.

National Partners

Divisional Partners

Barefoot bowls winners – Ferrier Hodgson team.

On 15 March 2017 the WA Credit Community held a breakfast at Matilda Bay restaurant. The guest speaker was Alan Langford, Chief Economist at Bankwest. He presented his view on the state of the WA economy, the wider Australian economy and the impact of Donald Trump, Brexit and the WA State election. As always it was an interesting and informative session.

Awards were presented to Lisa Marr for 10 year membership and Jason Louis for 20 year membership. Troy Mulder, Raff Di Renzo and Rowan McClarty received their certificates for becoming CCE’s.

Official Division Supporting Sponsors

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.

– Rowan McClarty

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AROUND THE STATES

New Members The Institute welcomes the following credit professionals who were recently admitted to membership in March and April.

New South Wales Trelene Alexandre Shane Ashton

Tristan Beasley Isabella Broomhall Nigel Carter Janine Coppeller Ha Minh Dao Suzie Fahd Bruce Gleeson

John Hall Nicole Herden Niall Hoolahan Chitra Jayamaha Fiyona Kidenya Reinhold Kreitmeier Carla Lerche Urszula Lusk Asher Macdonald Joanne Mannah Mick Matthews Susan Mccann Young Vicky McDonald Michael Ng Anna Nguyen Gregory Peck Janell Sercombe James Smith

Eddie Smith

Jenny Waite Sasha Webster

Dimension Data Australia Pty Ltd Australian Recoveries & Mercantile Agents Pty Ltd Dimension Data Dimension Data Recoveries & Reconstruction Sharp and Carter Caltex Australia Petroleum Pty Ltd Neopost Australia Pty Ltd Jones Partners Insolvency & Business Recovery Commercial Credit Services Pty Ltd Sharp and Carter Sharp and Carter Neopost Australia Pty Ltd News Corp Australia Neopost Australia Pty Ltd Neopost Australia Pty Ltd Veritas Recruitment Dimension Data Australia Pty Ltd Force Legal Dimension Data Australia Pty Ltd Neopost Australia Pty Ltd Neopost Australia Pty Ltd Temperzone Australia Pty Ltd Neopost Australia Pty Ltd Commercial Credit Services Australian Recoveries & Mercantile Agents Pty Ltd Australian Recoveries & Mercantile Agents Pty Ltd Dimension Data Australia Pty Ltd Dimension Data Australia Pty Ltd

International Chryshantini

Niles

Fletcher Building

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Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Boss Lawyers Commercial Credit Services Pty Ltd Nexxa Portfolio Management Landmark Operations Limited SRJ Walker Wayland Pty Ltd Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Pty Ltd STA Consulting Engineers Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management

South Australia Eddie Bastiani Jackie Fisher Cameron Henderson Abby Poyzer

Milton Graham Lawyers Milton Graham Lawyers Lynch Meyer Lawyers Credit Solutions Pty Ltd

Victoria

Queensland Brandon Beckingham Paul Blair Miles Blok Cameron Boon Kirra Bouton Steve Brooker Joshua Browne Matthew Buchanan Renee Coleman Susan Davies Clint Davis Nicholas Dry Kimberley Dubickas Laura Ducret David Elliott

Annette Fabian Blake Fry Jordan Gowdie Piero Gross Mark Harley Robyn Honeysett Joseph Iuliano Lydia Kent Maree Kent Wubishet Leckenby Hannah Lowing Mark Luxford Samuel McCabe Natural Meleisea Rosemary Mulligan Michael Orton Tayler Patton Abhi Phatak Nandesh Rasiklal Scott Reimers Nicole Rosenthal Gurpreet Singh Edward Sklavos Nathan Soo Kenneth Stewart Sean Toland Nicole Um Lauren Viera Samuel Vlahos Melanie Watt Glen Wingate

Nexxa Portfolio Management Nexxa Portfolio Management Nexxa Portfolio Management Pty Ltd Nexxa Portfolio Management Landmark Brismark Pty Ltd Nexxa Portfolio Management Nexxa Portfolio Management Willis Bros Installations (QLD) Pty Ltd 2SG Technology Group Nexxa Portfolio Management Pty Ltd Nexxa Portfolio Management Nexxa Portfolio Management Landmark Operations Ltd Nexxa Portfolio Management

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Tiarne Bennett Giuliana Bisogni Daniel Close Anthony Cullen Chris Jurotte Chris Kakos Kenneth Kent Rachel Paunovic Sarah-Jane Prentice Benjamin Robert Adam Schofield Darren Somers

Sharp & Carter Sharp & Carter Sharp and Carter Commercial Credit Services Pty Ltd Australian Pharmaceutical Industries Ltd Landmark Operations Ltd REA Group Landmark Landmark Operations Limited Austral Collections Sharp & Carter Commercial Credit Services

Western Australia Shelley Gregory

ASG Auto Finance

See you at AICM’s

2017

NATIONAL CONFERENCE 11 - 13 October 2017 QT Canberra, 1 London Circuit The 2017 National Conference will be held at the QT Hotel Canberra and will feature one of the most spectacular Presidents Dinners ever at Parliament House in the Great Hall

Visit aicm.com.au for details and registrations

AICM Marketplace Directory of services For information, options and pricing please contact Andrew Le Marchant on +61 2 8317 5052 or E: andrew@aicm.com.au COLLECTIONS AICM Divisional Partner

AMPAC Debt Recovery Level 5, 35 Clarence Street Sydney NSW 2000 Tel: 1300 426 722 Email: info@4ampac.com.au Web: www.4ampac.com.au Trust AMPAC, we guarantee to give you the right advice……

AMPAC provides a complete range of debt recovery and receivables management services to big business, government and thousands of SME’s nationally, so next time you are deciding how to deal with that difficult customer, pick up the phone and call us. We are ready to help you too.

DEBT COLLECTION

INFORMATION

AICM National Partner

AICM National Partner

Austral Payment Management Services

Equifax

Tel: 1300 422 665 Email: info@australmercantile.com.au Web: www.australmercantile.com.au

Tel: 13 83 32 Web: www.equifax.com.au

Austral provides complete credit management services and works closely with our clients to understand their business and provide the solutions they require. Our experienced team works hard to deliver a consistently good experience and are always looking for ways to improve processes to help ensure your business has a continuous cash flow. So while we work on helping your debtors stay in the black, you can focus on what you do best and grow your business with confidence.

Equifax powers the financial future of individuals and organisations around the world. Using the combined strength of unique trusted data, technology and innovative analytics, Equifax helps its customers make informed decisions.

Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North, Central and South America, Europe and more recently in the Asia Pacific region, with the acquisition of Veda, a data analytics company and the leading provider of credit information and analysis in Australia and New Zealand.

COLLECTION SYSTEMS AICM Divisional Partner

AICM Divisional Partner

Trade Bureaux Australia Kemps Credit Solutions OnGuard Tel: 1800 123 613 Web: www.onguard.com OnGuard’s Credit management solution will help you hit your collection targets – each and every month.

By working smarter and providing better visibility, OnGuard will help you reduce your DSOs. Why not give your staff a friendly solution that will make their life so much easier.

Contact us to show you how OnGuard has made life a whole lot easier for our customers.

CONSULTANCY

50 Grenfell Street Adelaide 5000 Tel: 08 8418 1450 Email: gcrowder@kemps.com.au Web: www.creditsolutions.net.au/kemps Kemps Credit Solutions. A debt collection partner you can trust. Working with some of the country’s leading providers of information management and data intelligence solutions.

Since 1965 Kemps Credit Solutions has set the benchmark for providing quality collection and recovery services to South Australian businesses and government.

Dun & Bradstreet

Tel: 03 9028 8278 Email: enquiries@edxppsr.com.au Web: www.edxppsr.com.au EDX is the market leader in PPSA consultancy and registration, with over 15 years’ experience in Australia and New Zealand. We have helped hundreds of Australian businesses adjust to the PPSA by providing no-nonsense practical advice, coupled with first class PPSR registration capability and registry management. Whether you have high volumes and need a software solution or simply wish to outsource, EDX has a solution to meet your needs.

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AICM Divisional Partner

BRI Ferrier Adelaide

Tel: 13 23 33 Web: www.dnb.com.au Established in 1841, Dun & Bradstreet is the world’s leading source of commercial information and insight. Backed by our extensive credit and commercial databases, we help Australian businesses to make informed sales, risk and debt management decisions, and consumers to access personal credit information. Dun & Bradstreet transforms data into complete and actionable business information. Quality data is the foundation for all of critical decisions, whether in sales & marketing, risk management, business growth, debt collection or consumer credit.

CREDIT MANAGEMENT IN AUSTRALIA • May 2017

Trade Bureaux Australia P/L provides secretarial and chairperson facilities for Industry Credit groups within Australia. Operating since March 1998 we are independent and cater for over 25% of the Australian Credit Bureaux market.

Our members work together to strengthen their credit knowledge and reduce their company’s investment in working capital and bad debts.

Contact Jeff Hurst to find out about forming or joining one of our industry groups.

INSOLVENCY

INFORMATION AICM National Partner

EDX

PO Box 473, South Morang VIC 3355 Tel: 03 9303 8900 Email: tba@bigpond.net.au Web: www.tba.net.au

Level 4, 12 Pirie Street Adelaide SA 5000 GPO Box 952, Adelaide SA 5001 Tel: 08 8233 9900 Fax: 08 8211 6644 Web: www.briferrier.com.au BRI Ferrier Adelaide provides recovery, insolvency, advisory and forensic accounting services to businesses throughout South Australia and beyond. We have a wealth of in-house technical expertise as well as the support of our specialist professionals from BRI Ferrier’s unrivalled national and international network.

AICM MARKETPLACE

AICM Marketplace Directory of services For information, options and pricing please contact Andrew Le Marchant on +61 2 8317 5052 or E: andrew@aicm.com.au INSOLVENCY

AICM Divisional Partner

AICM Divisional Partner

AICM Divisional Partner

Vincents

Ferrier Hodgson Level 28, 108 St George’s Terrace Perth WA 6000 Tel: 08 9214 1444 Email: perth@fh.com.au Web: www.fh.com.au As a leading independent financial advisory and restructuring provider, Ferrier Hodgson solves complex problems with commercial solutions.

AICM Divisional Partner

LEGAL

Level 34 Santos Place, 32 Turbot Street Brisbane QLD 4000 Tel: 1300 VINCENTS

(07) 3228 4000 Web: www.vincents.com.au We live in a world of increasing complexities; the need for true expert advice is now more evident than ever. Established for more than 25 years Vincents is an Australian firm of accounting experts and business advisers specialising in assurance & risk advisory, business advisory, corporate advisory, financial advisory, forensic services, and insolvency & reconstruction. Gain insight and take control with Vincents.

AICM Divisional Partner

Results Legal Level 4, 183 North Quay Brisbane QLD 4000 Tel: 1300 757 534 Web: www.resultslegal.com.au Results Legal is a national firm with a focus on promoting and protecting the rights of trade creditors. Our clients are some of Australia’s largest trade credit companies who rely on our assistance for legal recovery, dispute resolution, preference claim defence and PPSA rights. Results Legal are the obvious first choice for companies seeking a national solution to resolve commercial disputes and pursue swift, successful and cost effective legal recovery action.

RECRUITMENT AICM Divisional Partner

FTI Consulting Tel: 08 9321 8533 Web: www.fticonsulting.com FTI Consulting is an independent global business advisory firm dedicated to helping organisations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle – from proactive risk management to the ability to respond rapidly to unexpected events and dynamic environments.

Sharp & Carter

Worrells Suite 1103, Level 11, 147 Pirie Street Adelaide SA 5000 Tel: 08 8214 0500 Email: adelaide@worrells.net.au Web: www.worrells.com.au Worrells is dedicated to solvency management, insolvency administration and forensic investigation. Worrells have been providing high quality corporate and personal insolvency services for over 40 years. We pride ourselves on offering reliable and practical solutions to those burdened with debt. With 24 partners and over 100 staff in 26 locations across Australia we are resourced nationally but focussed locally.

TRADE CREDIT INSURANCE National Supporting Sponsor Cor Cordis Tel: 03 8320 5600 Email: insol@corcordis.com.au Web: www.corcordis.com.au Cor Cordis was established in 2006 as an independent advisory firm specialising in Corporate and Personal Insolvency. Our clients benefit from the ‘hands on approach’ of our Partners and their extensive experience in a range of industries along with their detailed knowledge of the law and with the support of our young and dynamic professional staff, we are able to manage any sized assignment, irrespective of complexity. The firm has evolved since its origination, including its service proposition.

We are now considered to be one of Australia’s largest leading advisory firms specialising in Turnaround, Restructuring and Insolvency services.

National Credit Insurance Brokers Tel: 1800 882 820 (freecall) Email: info@nci.com.au Web: www.nci.com.au National Credit Insurance Brokers (NCI) has established itself as the premier trade credit insurance broker in Australia, New Zealand and Singapore. Trade credit insurance is a highly specialised area of insurance and, with its 30 years of experience, National Credit Insurance Brokers has developed an unmatched depth of expertise in arranging the right protection at the best price for your particular trading needs.

AICM MARKETPLACE

Web: www.sharpandcarter.com.au For any assistance with Credit recruitment, please call Melbourne – Chris Belegrinos on 03 9616 2622 Email: cbelegrinos@sharpandcarter.com.au Sydney – Janine Coppeller on 02 8315 8804 Email: jcoppeller@sharpandcarter.com.au Sharp & Carter will tailor candidate sourcing strategies to suit your company’s needs, taking into account factors such as time frame, budget, level of role and availability of candidates in the market.

We are committed to achieving a successful outcome for every assignment on which we work.

AICM Marketplace – our new initiative Welcome to our new marketplace.

We’re proud of the AICM and we want to let all credit professionals know those businesses that support the AICM. Thank you to these companies for their continued support and please consider them first when you’re looking for assistance in your business. We’ll also include these sponsors on our website so you can be sure to find them easily.

For more information contact:

Andrew Le Marchant Direct: +61 2 8317 5052 Email: andrew@aicm.com.au Tel: 1300 560 996

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The Publication for Credit and Financial Professionals

IN AUSTRALIA

Level 3, Suite 303 1-9 Chandos Street St Leonards NSW 2065 PO Box 64 St Leonards NSW 1590 Tel: 1300 560 996 Fax: (02) 9906 5686 www.aicm.com.au