Credit Management in Australia - April 2021 by AICM

Volume 28, No. 3 April 2021

The Publication for Credit and Financial Professionals

IN AUSTRALIA

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2 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Contents

Volume 28, Number 3 – April 2021

Qld: The winning Barefoot Bowls team: Liam Barnes, Jess Blakemore, Maddison Graham and Samuel Gill.

Message From the President

Networking

AICM National Economic Breakfast series

Sponsored by TurksLegal

Pathways

WA/NT: Insolvency Seminar panellists: Matthew Donnelly, Carmen

AICM Education Foundation Vocational education and training and its relevance to the credit industry

Boothman and Martin Bigg.

12 13 14 14

Recent graduates Virtual classroom training calendar

Masterclass Credit Management in the Construction Industry – an overview

SA: Nick Cooper and Mike Hayes on the Insolvency Seminar panel.

Wayne Clark MICM, MAICD

AICM Risk Report 2021 Insolvency Global insolvencies - how we stack up - and what to expect next

By Andrew Spring MICM

Vic/Tas: Lou Caldararo, Elle Watts, Catrina Galanti, Gordon Jenkins,

New insolvency laws bring small business funding needs into focus

Nikki Dennis, Mary Petreski and Rebecca Roberts.

By Craig Michie

Consumer Credit

Open banking in Australia By Jarrid Ohanessian

Could outsourced customer re-engagement campaigns be a better option

NSW: NSW Division President Balveen Saini presents Eric Milne

By Andrew Smith MICM CCE

8 National Economic Breakfast series

12 AICM Education Foundation

with his 40 year service pin.

15 Wayne Clark MICM

Andrew Spring MICM

Craig Michie

35 Jarrid Ohanessian

38 Andrew Smith MICM CCE

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 3

ISSN 2207-6549

42 Ashley Clayton

52 Roger Mendelson

46 Clare Venema MICM

50 Donna Smith MICM CCE

CHIEF EXECUTIVE OFFICER Nick Pilavidis FICM CCE Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065 PO Box 64, St Leonards NSW 1590 Tel: (02) 8317 5085, Fax: (02) 9906 5686 Email: nick@aicm.com.au

Eddie Bastiani MICM

Ross Paull

Changing consumer behaviours will impact collections centres in 2021

By Ashley Clayton

Changes to mandatory comprehensive credit reporting – are they really beneficial to consumers?

By Clare Venema MICM

Credit Management The real value in knowing your customer

By Donna Smith MICM CCE

The impact of covid on credit and debt collection and tactics for the future

By Roger Mendelson

Payment Times Reporting Act 2020: Increasing the transparency of payment patterns

By Eddie Bastiani MICM

ASIC raises the stakes on complaints handling

By Ross Paull

Member Anniversaries

DIRECTORS Trevor Goodwin LICM CCE – Australian President Lou Caldararo LICM CCE – Victoria/Tasmania & Australian VP Rowan McClarty MICM CCE – Western Australia/Northern Territory Gail Crowder MICM – South Australia Peter Morgan MICM CCE – New South Wales Debbie Leo MICM – Consumer Decia Guttormsen MICM CCE – Queensland

PUBLISHER Nick Pilavidis FICM CCE | Email: nick@aicm.com.au CONTRIBUTING EDITORS NSW – Balveen Saini MICM CCE Qld – Stacey Woodward MICM SA – Clare Venema MICM WA/NT – Jeremy Coote MICM Vic/Tas – Michelle Carruthers MICM EDITOR/ADVERTISING Andrew Le Marchant LICM CCE Phone Direct 02 8317 5052 or Mob 0418 250 504 Email: andrew@aicm.com.au EDITING and PRODUCTION Anthea Vandertouw | Ferncliff Productions Tel: 0408 290 440 | Email: ferncliff1@bigpond.com THE EDITOR reserves the right to alter or omit any article or advertisement submitted and requires idemnity from the advertisers and contributors against damages or liabilities that may arise from material published. CREDIT MANAGEMENT IN AUSTRALIA is published by the Australian Institute of Credit Management, Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065. The views expressed in CREDIT MANAGEMENT IN AUSTRALIA are not necessarily those of Australian Institute of Credit Management, which does not expect or invite any person to act or rely on any statement, opinion or advice contained herein (whether in the form of an advertisement or editorial) and neither the Institute or any of its employees, agents or contributors shall be liable for any opinion contained herein. © The Australian Institute of Credit Management, 2021.

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From the President

Trevor Goodwin LICM CCE National President

elcome to the second edition of our

the job, work pressure, financial and employment

Credit Management magazine for

concerns and issues such as workplace bullying.

2021. The year is flying by and we are

Work-related mental health conditions have

into the last quarter of the financial year. The major news so far this year has been the

become a major concern in Australian workplaces and employers and employees need to safeguard

introduction of the vaccine and the agreement

their mental health and the welfare of their

reached with the New Zealand government to

colleagues.

re-open borders for travel. Also, economic growth

These conditions highlight the importance of

is exceeding expectations, buoyed by cashed up

what we do as a profession and the role of the

households and residential construction which

AICM. Continuing on from our focus to support

is encouraging, although there will still be many

you virtually in 2020 in 2021 we will build on this

challenges and uncertainty ahead.

by delivering even more access to the updates and

The end to JobKeeper comes at a time when the economy is still undergoing adjustments from

resources you need. 2021 has kicked off with the insolvency seminars

the pandemic and will likely see a number of

in NSW, SA, Qld and Vic with WA to come in April.

businesses that were viable in 2020 close due to

These seminars have been indepth discussions

significant shifts in our spending habits. Anticipated

of what we have learnt and what we can expect

rising unemployment rates and possible further

with attendees left armed with what they need to

government intervention such as the border closures

succeed.

and permanent changes to our behaviour such as

To compliment the Insolvency Seminar series

travel and working from home will have a bearing.

we’ve released our second review of the risks credit

The number of business insolvencies that are

professionals face in our 2021 Risk Report which

expected to increase this year and requests for

is designed as a go to document where all metrics

repayment plans and extension of payment terms

impacting our sector are encapsulated, explained

will keep credit professionals busy, notwithstanding

and with a summary of actions to manage these

there are industry sectors that are in a better

ongoing risks.

position than others. This year so far has seen a small increase in

Our divisions have already been busy with a calendar of events set for the year and we have seen

credit insurance claims received by insurers. It is

a variety of events held in each division with strong

expected the increase in claim numbers will increase

numbers attending these functions.

in the second quarter of 2021 and beyond following

The Institute is into its second year of a

the wind back of government support measures,

three-year strategy plan developed by the Board

and financiers and the ATO re-aligning their

with the assistance of external consultants. Your

priorities on unpaid dues. After the expected “wave”

Board and national office team will continue to

the anticipation is for claim numbers to normalise

implement the plan throughout 2021 and 2022

back to what credit insurers saw in 2019.

ensuring the relevance and importance of the

With so much occurring in the past 12

Institute in future years, while strengthening and

months, mental health as well as customer

engaging our membership base, providing quality

financial hardship, are issues for businesses in the

education programs and advocacy submissions to

uncertainly of 2021 caused by high demands of

relevant bodies. Having a current strategic plan is

6 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

From the President

aicm

crucial for us in getting things done and providing

councillor to find out what you need to do to sit

great outcomes for the Institute and members.

for the CCE.

Professional development is a major focus

In 2021 we will hold the Young Credit

and it is important to assist our members to be

Professional Awards which have been successfully

appropriately skilled and trained to perform their

held for many years attracting the best of our young

jobs and advance their careers. New training

credit professionals to undertake the challenge.

dates and courses have been released for your

Other major awards in 2021 will be Credit Team of

consideration. Please enrol yourself and or your

the Year and Student of the Year.

team members in these excellent courses. Affirming

A prestigious event on the AICM calendar

the importance of your professional development,

is Women in Credit which continues to go from

we are looking to move the education component of

strength to strength in numbers and quality of

the national magazine to the front of future editions

venues and speakers. This event is a “not to be

to focus on our learning component. Additionally, we are in the process of launching the Education Foundation, and for the next two years the Foundation will offer 8 Toolbox sets and 5 Workshop sets after which it will be in a position to fund scholarships for all courses offered by the AICM. Further details will be advised shortly on how to submit an application and the judging process. A further initiative this year to support our members and businesses will be the implementation of an AICM Job board for firms to lodge job advertisements and for AICM members to leverage. Communication and member engagement is important for all professional associations including the AICM. We recently conducted a members’ survey with excellent feedback being received from those members who responded to the survey.

missed for all members” in each of our divisions and has been programmed over the next two months. Many of our members, including myself, are looking forward to a return of the National Conference. The Board is working towards holding a “face to face” conference in October. Details will be advised shortly once we are confident the conference will proceed. As we run up to 30 June, I encourage members to “get your house in order”. This is an important period to undertake your major account reviews, build sound relationships and networks with your major customers, your sales team and other credit professionals. Ensure you are familiar with new reforms that have been introduced and undertake training to enhance your credit skills.

We continue to develop tools for members

In conclusion the Institute continues to go

such as the previously mentioned Risk Report and

from strength to strength supported by our loyal

our recently released Annual Report which are

and supportive members. Into the future there are

the beginnings of our intention to provide timely

challenges ahead for the economy and for business

condensed information for members, in addition to

which will keep credit professionals on their toes;

our magazines, newsletters and webinars.

but I am sure many of you will agree with me that

The 2021 CCE program commenced in March with another sitting to be held in September.

we wouldn’t want to live in any other country than Australia as we continue to navigate through 2021.

All eligible members are encouraged to consider gaining their CCE qualifications. So please check

Trevor Goodwin LICM CCE

in with the National office or your division CCE

National President

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 7

Networking

AICM National Economic Breakfast series Sponsored by TurksLegal AICM was excited to return to events in 2021 and to work with our National Partner TurksLegal to deliver a series of Economic Breakfasts across all divisions. TurksLegal Partner’s Andrew Forbes and Fiona Reynolds were delighted to introduce the guest speakers at the Brisbane and Sydney events respectively. These events were held in February and we asked both Andrew and Fiona to provide a brief summary of each event including some key takeaways so that other divisions can see what’s ahead for their events.

QLD

QLD Economic Breakfast Over 50 credit professionals attended the Brisbane AICM Economic breakfast held on 19 February 2021 at Pacific Hotel in Spring Hill. NAB’s Senior Financial Markets Manager, Justin Green, was the guest speaker. Justin prepared a detailed economic briefing in which his key messages were about the positive outlook NAB analysts hold for the Australian economy and how it has weathered the pandemic, with assistance from government stimulus. The post-COVID outlook for the Australian economy is brighter than some had feared. The ‘cliff’ that it was feared

8 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

we would fall off in March when JobKeeper was brought to an end is not expected to be significant. This is because of: z the steps taken to control the virus allowing businesses to open comparatively early; z substantial government stimulus; z very low interest rates; and z personal cash reserves, diverted from internal spending. The takeaway tip from the breakfast was a reminder to ask your boss for a pay-rise because the quickest way to stimulate the economy is to encourage spending. I was proud to give a historically and geographically relevant Acknowledgement of Country, reminding everyone that Spring Hill was an important meeting

Networking

NSW

place for indigenous tribes as Brisbane grew in the early to mid-1800’s. The Brisbane breakfast also celebrated AICM members who have recently become accredited with their CCE plus those who had recertified along with those members who have maintained their association for decades and attained membership anniversary milestones. It was lovely to acknowledge their efforts in person with plenty of ‘COVID-safe’ clapping. – Andrew Forbes MICM Partner

NSW Economic breakfast There was a fantastic turnout of 60 credit professionals to the NSW Economic breakfast held in Sydney on 25 February. Powered by a delicious hot breakfast provided by the event’s host, Rydges Sydney Central, everyone was excited and energised to be out of the home office and networking in person, many for the first time in over a year! The guest speaker was Mark Thirwell, Chief Economist at the Australian Institute of Company Directors. Mark is a highly experienced and respected economic analyst who has more than 25 years experience in tracking the economy. Mark presented a very interesting and engaging presentation on ‘Covid-nomics’. By drawing on statistical data from various industries,

he looked at the impact of the ‘Corona Virus Crisis’ or ‘CVC’ on the Australian economy in the short and long term. ‘CVC’ is a term Mark himself coined which he hopes will gain popularity and become part of our COVID-19 vocabulary. Mark’s expert insights and analysis enabled us to gain some useful insights into how the CVC will affect current and future economic policies; our work practice; our spending habits and our industry. The Sydney breakfast also acknowledged the accreditation of AICM members. It was a wonderful opportunity for the achievements of these members to be publicly acknowledged. – Fiona Reynolds MICM Partner

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 9

Networking

Vic/Tas

Vic/Tas Economic breakfast There was a definite buzz in the air at the Victorian Economic breakfast held on 17 April at the Jasper Hotel in Melbourne as everyone was thirsty for the opportunity to network in person with fellow credit professionals. Vic/Tas Division CCE Chair Mary Petreski, injected the room with her usual enthusiasm as the MC. I had the pleasure of introducing the guest speaker Dean Pearson, Head of Behavioural and Industry Economics at National Australia Bank. Dean has over 25 years’ experience analysing the economy and assessing the implications both in Australia and globally. The overall message in Dean’s very insightful economic update was that the economy is powering along and has recovered much better than anyone anticipated. The government stimulus packages had encouraged spending and this has been an important factor in the rapid economic recovery we are seeing.

Some of the key insights included: z industrial property investment had boomed, fueled by the upswing in online retail; z unemployment had fallen all around Australia, with WA experiencing the lowest unemployment rate in the country; z building approvals are up; z business conditions and confidence are at an all-time high; z spending, in particular on our homes, retail goods and at stores in our local areas is on the increase; and z certain sectors of the economy, such as tourism and entertainment, are under stress. Following the presentation Vic/Tas Division President Sherif Hussein presented certificates to acknowledge the recertification of those members who are Certified Credit Executives of the AICM and to other AICM members who had achieved significant milestones as members. Congratulations to the AICM committee for putting on this very enjoyable event. – Allan Kawalsky MICM Partner

The remaining breakfasts in the series are: Western Australia

18 May

Doubletree By Hilton Perth Northbridge

Click here to register for the Western Australia event. 10 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Unlock the potential in your credit career credit staff

Consider an AICM Qualification course If you aspire to achieve greater heights in your credit career or want to get the best from your credit staff, then a qualification course can help you achieve your targets. Offered nation wide, you can study in your own time (24/7), with support available. If you have industry experience or prior education, you may be eligible for Recognition of Prior Learning (RPL) credits to fast-track your qualification. If you’re an employer, you may qualify for a training grant. Talk to AICM today to discover your course options.

Diploma of Credit Management

Certificate IV in Credit Management

Certificate III in Mercantile Agents

Key credit issues such as personal & corporate insolvency, developing credit policies & compliance.

Issues relating to credit applications & securitisation, compliance, managing bad & doubtful debt & customer service.

All aspects of enforcing payment obligations & obligations of mercantile agent & debt collection activities.

Take the first step to a better career & talk to AICM today

Call 1300 560 996 or vist aicm.com.au

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Pathways

AICM Education Foundation The AICM Education Foundation which was launched at the conference in 2019 and is now in a position to start offering scholarships for Toolboxes and Workshops delivered online by the AICM. The foundation has been established to provide financial assistance for students wanting to develop their careers through further education. Not everyone is fortunate enough to be able to afford to study or obtain support from their employer and this is where the Education Foundation can assist. The Education Foundation will also bolster the position of the AICM as the primary learning, knowledge and information source for credit professionals and support the AICM’s objective of providing opportunities for growth throughout their careers. A Management Committee has been established to manage the day to day running of the foundation and they have been busy designing the application process for scholarships, creating the Foundation policies and charter, and putting strategies in place to ensure the Foundation can deliver on its vision. This is an exciting and innovative idea which has required time and effort by the committee sourcing assistance from some of the experts in the education industry with experience in managing scholarship grants. Over the next two years the foundation will offer 8 Toolbox sets and 5 Workshop sets each

12 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

year and aim to be in a position to fund scholarships for all courses offered by the AICM by the beginning of 2022. The process for the applications has been agreed upon. Soon there will be a window for applicants to submit their applications with successful applicants commencing to enrol from July 2021 onwards. Initially, all applicants will be screened by the committee, followed by a series of interviews by the judging panel. The panel will consist of a committee member, one AICM national office staff member and an independent person (not in the credit industry). This will be similar to the judging procedure for the Young Credit Professional of the Year and aligns with processes followed by other education scholarships. Initially the committee will be raising funds through raffles and auctions to be held at AICM events. As the momentum for the foundation grows we’ll seek direct donations from organisations and individuals who share the AICM’s passion in developing credit professionals and equipping them with the skills needed to have successful careers. Thank you to the management committee for all their time, effort and initiative in bringing all the moving pieces together. Please visit the Education Foundation page on the AICM website for more information and for details on how to apply for a scholarship.

Pathways aicm

Vocational education and training and its relevance to the credit industry Australia’s vocational education & training (VET) sector continues to deliver excellent results and outcomes for its students not only within the credit industry but the economy at large. Often there are debates about university deregulation and private vs public school funding, vocational education all too often is relegated to the back, struggling to gain the attention required for the public to understand VET’s unique abilities to train and educate. Further, the current overemphasis on academic and university pathways means VET pathways are often not given due consideration by those seeking to undertake further training. As such, public awareness and recognition of the crucial role that VET can play and is playing – in training the Australian workforce with the skills required to grasp future industry opportunities – is poor.

training in Australia. While it is widely acknowledged that getting a qualification will enhance your earning potential and employment prospects, the report indicated that VET graduates are paid even more than those who studied at university.

Benefits of undertaking a qualification in the VET sector

Employers and industry

When compared with employment outcomes for university graduates, VET continues to produce superior results, and has proven itself to be a more flexible, accessible and adaptable platform for educating and skilling Australians. Importantly, given the rising cost of formal education, VET is also a more cost-effective training option for both businesses and individuals to obtain a formal nationally recognised qualification. Ensuring individuals and employers get the highest return on investment in education and training. Understanding the return on investment (ROI) in education and training helps individuals, enterprises and governments to determine changes in the employability of workers following training or to provide a measure of productivity improvements within firms.

VET graduates secure employment opportunities and find work Statistics from the report outlined that studying with registered training organisations providers like AICM increase the chances of securing employment after completing their qualification. While only 67% of university students find work after graduating, nearly 80% of VET students secure employment. This is because AICM focus on providing practical skills that are required within the workplace and specialise in credit Industry focused units.

Employers and industry are integral to a quality VET system. Registered training organisations (RTOs) are responsible for systematically monitoring, evaluating and continually improving their training products with the help of industry and employers. This enables continuous improvements in the training being offered and benefits employers who have job ready candidates.

The decision is now up to you

VET graduates are paid more

The good news is that deciding to invest in your career and future is never a bad decision. If you are ready to study with AICM and obtain a nationally recognised qualification in 2021, contact us today for further information aicm@aicm.com.au we are here to help. AICM offers training courses which change according to the needs of the credit industry and with its high level of flexibility enables it to provide practical programs that will provide you with valuable knowledge and skills no matter at what stage you are with your career.

The “Perceptions are not reality” report from Skilling Australia debunks1 some of the most common misconceptions about vocational education and

FOOTNOTES: 1 Source – Skilling Australia report – perceptions are not reality

➤

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 13

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Pathways AICM recent graduates AICM would like to congratulate its recent graduates:

FNS40115 – Certificate IV in Credit Management: Renuka Joshi

Vic

Kemps Petersens Receivables

FNS30415 – Certificate III in Mercantile Agents: Ebony Watson

NSW

Association Investigation Services

Statement of Attainments: Jessica Burns

NSW

• BSBCNV506 – Establish and manage a trust account

Acrow Formwork & Scaffolding Pty Ltd

Melissa McPherson

VIC

• BSBCOM402 – Implement processes for the management of a breach in compliance requirements

Selection Steel Trading

Virtual classroom training calendar Date

Type

Topic/event name

Thursday 6 May 2021

Workshop

Understanding Personal Bankruptcy

Tuesday 11 May and Wednesday 12 May 2021

RTO – FNS51520 Diploma of Credit Management

FNSCRD504 – Manage the Credit Relationship

Tuesday 13 May 2021

Toolbox

Fundamentals of Credit

Wednesday 19 May and Thursday 20 May 2021

RTO – FNS40120 Certificate IV in Credit Management

FNSCRD402 – Establish and Maintain Appropriate Securities

Tuesday 25 May and Wednesday 26 May 2021

RTO – FNS51520 Diploma of Credit Management

BSBCNV506 – Establishing a trust account

Wednesday 9 June 2021

Toolbox

Collect with Confidence

Thursday 10 June 2021

Workshop

Understanding Financial Hardship

Tuesday 15 June and Wednesday 16 June 2021

RTO – FNS40120 Certificate IV in Credit Management

FNSCRD401 – Assess Credit Applications

Tuesday 22 June and Wednesday 23 June 2021

RTO – FNS51520 Diploma of Credit Management

FNSCRD511 – Respond to Personal Insolvency Situations

Wednesday 7 July and Thursday 8 July 2021

RTO – FNS40120 Certificate IV in Credit Management

FNSCRD404 – Utilise the Legal Process to Recover Outstanding Debt

Tuesday 13 July and Wednesday 14 July 2021

RTO – FNS51520 Diploma of Credit Management

FNSCRD515 – Respond to Corporate Insolvency Situations

Thursday 15 July 2021

Toolbox

Understanding Credit Risk

Wednesday 21 July and Thursday 22 July 2021

RTO – FNS40120 Certificate IV in Credit Management

FNSRSK411 – Apply risk management strategies to own work

Monday 26 July 2021

Workshop

Personal Property Security

Tuesday 10th August 2021

Workshop

Understanding Corporate Insolvency

14 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Masterclass

C Wayne Clark MICM, MAICD

onstruction is the third largest industry in Australia for the number of people it employs and its GDP (Gross Domestic Product) contribution. However, it is the second largest industry when it comes to corporate insolvencies, with an average of 1,552 per annum. Understanding the nature of the industry is extremely important for effective credit management.

Industry overview The Construction industry generates around $360 billion in revenue, producing approximately 9% of Australia’s GDP. It has a projected annual growth rate of 2.4% in the next five years. In 2019, over 1.15 million people were employed in construction (that’s 9.0% of all jobs in Australia). A further 118,800 jobs are projected to be added by May 2023. This means we

will witness a 10% rise in employment in construction. “The Australian construction industry is expected to rebound in 2021 and grow by 2.6% in real terms, having contracted by 6.6% in 2019, with an estimated fall of 4% in 2020”. Source: BUSINESS WIRE – “Construction in Australia - States and Key Trends and Opportunities to 2025” Of the 360,000 individual construction businesses in Australia, over 90% are small companies. Small businesses are the fuel that drives growth in the construction sector.

Industry profitability Competitiveness in the Australian building and construction industry creates a low profit environment for all participants, particularly for tier 1 builders offering essentially undifferentiated offerings. A number of years ago Melbourne University ➤

Insolvencies 7 Year Average 2013 to 2020 4,000 3,048

3,000

2,000

1,000

1,552 892 632 310

Accommodation & Food services

Construction

Manufacturing

Other (business & personal) services

Avg per Yr

Retail trade

409 Transport, postal & warehousing Source: ASIC

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 15

aicm

Credit Management in the Construction Industry - an overview

aicm

Masterclass Industry Sector Payment Patterns

BICB Outstanding Debt Above 60+ Days by Industry Sector 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

m Ti

l r s k n n b d rs rs ry gs ds ire ng od pp to ee Bl ile oc tio tio xe in ne um Doo Pr oo oﬁ St ec Su d tH la Bl Fi rT ca er oi o a G S e Pl n i u e J o t v r R & o & e s p o e & b te R k s& In No Co e Fl cr rd s& ca hi ic Fa pm ar ow to or s& er ui on oa W Br L's el l& o d k k w l e q b l C ' r e & a a & E in F / o iv l H er St M W el w & te W st us ca et re av la cl et rth tri r n c x i P p a c n r E b e E /G El Co Ca Ca nd Sa

Feb-19

and Deakin University conducted an analysis of the profitability of a sample of large commercial builders based in Victoria. The survey confirmed “that net profit margins for these companies are 2 and 3 percentage points of total revenues – wafer thin.” The table below shows profit margins in the construction industry at 2009/2010 (Source ABS). ANZSIC subdivision

Profit margin %

Businesses that made a loss %

Building Construction

6.2%

30.7%

Heavy & Civil Engineering Construction

7.6%

15.7%

Construction Services

13.7%

20.9%

Total Construction

9.7%

22.5%

Credit is king in the construction industry Everybody on a construction project is waiting for money from the top of the contracting chain, and the further down-the-chain a project participant is, the more opportunities there are to experience hiccups or abuses in the payment process. Money can slip through the cracks on construction projects in a variety of places, and, there are also many reasons why payments get delayed. Because everybody on the project is waiting for the parties above them to get paid before they are, any little inconvenience, delay, or dispute about any component of the work can impact payment for everyone on the project, whether or not that party was directly involved.

16 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Feb-20

Feb-21

Industry regulators or licencing bodies z Queensland Building and Construction Commission (QBCC) z NSW Fair Trading – Home Building Act 1989 and Home Building Regulations 2014. z Victorian Building Authority (VBA) z TAS Consumer, Building and Occupational Services z SA Consumer and Business Services z WA Department of Mines, Industry Regulation and Safety z NT Building Practitioners Board z ACT Government, ACT Construction Occupation (Licensing) Act 2004

The credit function The fundamental role of the credit manager is to provide governance of the organisation’s Credit Policy. So, it is extremely important that an organisation has a Credit Policy that clearly defines the parameters of their role. “Credit management is the process of granting credit, setting the terms on which it is granted, recovering

“Credit management is the process of granting credit, setting the terms on which it is granted, recovering this credit when it is due, and ensuring compliance with company credit policy, among other credit related functions.”

Masterclass

z Contractual risk: Penalties they may have to pay for not completing a job on time. z Project risk: Lack of proper project management, inadequate company policies or lack of application of such policies, miscalculation of time and resources required, and more. z Stakeholder risk: Problems of communication, misunderstanding on the deliverables or closeout of a building project, insufficiency of stakeholder funds. z Natural risks: Floods, earthquakes, pandemics, and other phenomena that damage construction sites or make access for work difficult or impossible. z Competition: Pressure to match price or delivery terms offered by a competitor, possibly putting profitability at risk or straining resources, loss of a project or opportunity to a competitor, and more.

this credit when it is due, and ensuring compliance with company credit policy, among other credit related functions. The goal within a company in controlling credit is to improve revenues and profit by facilitating sales and reducing financial risks.”

Understanding the risks The construction industry is heavily dependent on credit. Almost every construction industry participant supplies their work and/or materials without requiring payment prior to delivery. The value of the labour and/or materials supplied on credit can be substantial and the creditbased payment scheme extends all the way through the payment chain. Most companies both extend credit to customers and rely on credit from suppliers. It is quite common that the payment of a company’s own bills is delayed until payment is received from parties higher in the contracting chain. Construction’s creditheavy system presents challenges for Finance Managers and Credit Managers who supply to the construction industry. It is extremely important that Credit Managers be aware of the risks to which construction businesses are exposed. z Financial risk: Such as unmanaged growth, lack of sales, rising interest rates, overtrading, problems with the economy, and increases in oil and building supply prices. Chasing low margin sales is a recipe for failure.

Assessing risk Whether onboarding new customers or, reviewing existing customers, access to meaningful data is critical. This information can be sourced in a variety of ways. Credit Reporting Agencies and Industry Trade Bureaus providing online access to current and historical trading data, Court actions, ASIC data, Licencing Regulators and Trade References from other suppliers. These information sources should enable the credit team to make an informed decision to trade or not trade. ➤

Regional Payment Patterns

BICB Avg Debt % Outstanding Above 60+ Days by Region 20.00% 15.00% 10.00% 5.00% 0.00%

Gold t Coast as

d ol

Sunshine t Coast as

n Su

Darling Downs ns

lin

r Da

Central Qld ld lQ

w Do

17/18

tra en

North Qld ld

r No 18/19

Northern y Territory or

Brisbane & hOther er

rit

r Te

n 19/20 er

rth No

b ris

Victoria

Western t Australia us

ia or ct

20/21 YTD

er st

NSW SW

e W

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 17

aicm

Construction’s credit-heavy system presents challenges for Finance Managers and Credit Managers who supply to the construction industry. It is extremely important that Credit Managers be aware of the risks to which construction businesses are exposed.

aicm

Masterclass It is often difficult to obtain financial reports from customers but, if they can be secured, then it is important to understand what they mean. Generally, they are historical documents, that is, they reflect what has happened in the past. Things to consider when assessing risk z Do they have a good payment history? z How long have they been operating? z Do they have a current contractor/builder licence (if required)? z Have they had a contractor/builder licence cancelled or suspended? z Have they been involved in any court actions? z Have they been involved in failed businesses in the past? z What is the business structure, company, partnership, sole trader, trust? z In what industry sector are they operating? z Do the owners or directors own property? z Are the directors willing to supply Director Guarantees? z Are they willing to provide financial reports? (Note 1) z Do they meet the 5 c’s of credit test – Character, Capacity, Capital, Collateral, Conditions? Note 1: In Queensland QBCC imposes Net tangible asset requirements. NTA disclosure must be supported by audited financial statements. As far as I am aware QBCC is the only regulator that imposes minimum financial requirement for licencing.

Managing credit risk z Know your customer – regular review process z Balanced payment conditions, deal with barriers to getting paid z Foster co-operation between Credit and Sales (Vital) z Work on all ageing buckets z Resolve queries quickly z Implement a short and effective collection process z Secure ‘Director Guarantees’ whenever possible z PPSR Registration z Enforce Credit Limits z Obtain security i.e., bank guarantees, in certain circumstances z Minimise the Risk of a Preferential Payment Claim i.e., PPS registration, ensure repayment agreements are not paid in round numbers i.e., $2,000, but random amounts or by specific invoices.

they are historical documents, that is, they reflect what has happened in the past. Examining the Profit & Loss Statements will show if they are making a profit or loss and give a breakdown of income and expenses. The Balance Sheet will provide information on Assets and Liabilities and also their net equity position. It is important to understand that the largest asset for a building business is usually ‘work in progress’. This asset can quickly evaporate if the business is placed into external administration.

Measuring collection efficiency There are many opinions concerning methods for measuring the efficiency of collecting accounts receivable. Listed below are a few of the most common methods for calculating and measuring the effectiveness of your organization’s Accounts Receivables collections. DSO – the most common way to measure the effectiveness of the organization’s collection is with the DSO (Days Sales Outstanding). ‘Thumb Rule’ Approach – the popularity of the ‘thumb rule’ approach lies perhaps in its simplicity: the current and preceding months’ sales are deducted from a given debtors’ balance, and the number of days involved in each month are noted. Any residual of the debtors’ balance is then expressed in terms of days of the respective month’s sales. Summation of the days noted represents the number of days debtors take to pay their accounts. ADD – Average days delinquent. The average number of days the payment is made after the invoice due date. CEI – Collector Effective Index (CEI) is similar to DSO and is measuring the effectiveness of the individual collector. It is another alternative in evaluating your company’s efficiency in its operations. This KPI will show at each collector level, the amount of money that is collected in a certain period against the total receivables due for that same period.

Reviewing financial reports

Understanding the current and future trading economy

It is often difficult to obtain financial reports from customers but, if they can be secured, then it is important to understand what they mean. Generally,

It is vitally important for credit managers to be aware of the prevailing economic conditions as these will have an impact on the overall risk of doing business. The

18 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Masterclass z Simplified debt restructuring and liquidation processes for businesses that have under AUD $1 million in liabilities. z BICB’s current and historical payment trend data. z BICB’s monthly risk profile data.

*Wayne Clark MICM, MAICD Executive Director, Building Industry Credit Bureau Email: wayne@bicb.com.au T: 0402 244515

SOURCES: ABS – 21.3 CONSTRUCTION INDUSTRY(a), Selected performance measures BICB Article published 2 March 2021 www.bicb.com.au BICB Trading Data Statistics ASIC Series 1A Companies entering external administration - by industry Construction Industry Facts (Updated 2020) - Back to Basics DUBLIN--(BUSINESS WIRE)--The “Construction in Australia - States and Key Trends and Opportunities to 2025” report has been added to ResearchAndMarkets.com›s offering. The Ultimate Guide to Construction Risk Management Published Oct. 30, 2015 by Rachel Burger in Construction Management.

Insolvencies Construction Industry 2,500 2,000

1,930 1,647

1,511

y = 8.7879x + 1474.6

1,500 1,354

1,000

1,515

1,450 1,161

500 0

2015/2016

2016/2017

2017/2018

2018/2019

2019/2020

2020/2021 Forecast

2021/2022 Forecast

It is vitally important for credit managers to be aware of the prevailing economic conditions as these will have an impact on the overall risk of doing business. The prevailing sentiment amongst insolvency specialists is that insolvency and restructuring work across a range of industry sectors is going to ramp up in the first half of this year (2021). April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 19

aicm

prevailing sentiment amongst insolvency specialists is that insolvency and restructuring work across a range of industry sectors is going to ramp up in the first half of this year (2021). The following conditions support this sentiment: the cessation of Statutory relief for directors from liability for insolvent trading ceasing on December 31, 2020, together with the thresholds for issuing and enforcing statutory demands and the rolling back of stimulus measures. In general, we at BICB also hold to this view about the construction sector. Our forecast is for insolvencies to come in at around 1,161 for 2020/2021 and around 1,930 for 2021/2022. We also took the following factors into consideration when making these forecasts: z Historic insolvency numbers (5-year average) z The removal of the JobKeeper program from 28 March 2021. z Domestic building stimulus measures. z Current and historic Building approvals. z Supplier ability to meet increased demand. z Cash-flow issues due to construction delays. z Price increases due to supply and demand pressures causing cost blow-outs. z Likelihood of lenders taking a harder line on businesses that have underperformed in recent years.

AICM

Risk

REPORT

2021

When this report was first proposed in 2020 we expected to see a slow increase of insolvency activity that would be caused by structural change which by nature takes a while to unfold. We were not expecting the shock of the pandemic and the shift in our behaviour caused by the various necessary government interventions in our society. Some measures stimulated activity and created micro economies such as those businesses based in the suburbs that benefitted from their customers being available all day, others such as suppliers to offices have seen a drastic reduction in their sales and profit. As always we’re guided by the numbers and we are very pleased that the number of contributors to our report has increased and the effort they’ve put into preparing interpretations of the data is greatly appreciated. We’ve prepared the report to give readers the ability to glean a high level view from the first half and then dive into the detail when ready. Following is a summary of our key findings from our Risk Report. Click here for the full report.

CREDIT MANAGEMENT IN AUSTRALIA • April 2021

What YOU NEED TO KNOW The review of personal and corporate insolvency

would increase significantly in 2020, economic

reveals that the government’s responses to the

uncertainty was the number one concern for many

COVID-19 pandemic have resulted in a dramatic

credit professionals driven by global trends and

change in conditions which are largely contrary

the summer of bushfires but not yet impacted by

to what would be expected to occur with the level

COVID-19.

of disruption experienced. Once the pandemic gripped Australia in To summarise the statistics and commentary of

March 2020 and lockdown commenced, the

this report, we break the summary into what the

government’s action to implement temporary

corporate and personal insolvency appointments

protections and provide financial support via

reveal and what they mean for credit and

JobKeeper and other measures took immediate

insolvency risk into the future.

effect. Graph 1 (below) shows that insolvencies dropped by 41% in 2020 compared to 2019 and

Corporate insolvency

Graph 2 (next page) shows that the 1st quarter

Entering 2020 economic conditions and industry

was relatively in line with 2019 however the

expectations indicated insolvencies and credit risk

remaining 3 quarters saw 50% less insolvencies.

Graph 1: Companies entering an insolvency process 12,000 10,000 8,000 6,000 4,000 2,000 0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Appointments

7,277

7,737

7,521

9,113

9,437

9,601

10,481

10,632

10,821

8,794

10,164

8,505

7,811

8,044

8,324

4,943

Change

10%

-3%

21%

-19%

16%

-16%

-8%

-41%

Data sourced from Australian Securities and Investments Commission Series 1 Companies entering external administration and controller appointments Reproduced with permission. Note: Series 1 data reflects the number of companies in the period that have entered external administration or had controller appointed for the first time. Some companies may have several appointments which is captured by ASIC’s series 2 data.

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA

Graph 2: 2020 v 2019 quarterly comparison 2,500

2,000

1,500

1,000

500

n 2019 n 2020 Change

March

June

September

1,817

2,095

2,309

2,103

1,747

1,203

946

1,047

-4%

-43%

-59%

-50%

n 2019

December

n 2020

Data sourced from Australian Securities and Investments Commission Series 1 Companies entering external administration and controller appointments Reproduced with permission.

Graph 3: State by state comparison

For credit professionals, while there

1 January 2020 – 31 December 2020

was an initial reaction to requests for payment extensions and support, the government stimulus payments quickly resulted in an improvement of most organisations ledgers, with many members reporting their receivables are in their best shape in

28 | -28%

recent memory as they entered 2021. 931 | -42%

The decrease in corporate insolvency

404 | -47%

appointments is evident in every sector

169 | -50%

as seen in every state (Graph 3) and 1,772 | -40% 106 | -24% 1,519 | -37%

industry sector (Graph 4 in next page). The top 5 industries for insolvency appointments remains unchanged between 2019 and 2020 being:

14 | -71% Data sourced from Australian Securities and Investments Commission Series 1 Companies entering external administration and controller appointments Reproduced with permission.

1. Business and personal services 2. Construction 3. Accommodation 4. Retail trade 5. Transport, postal and warehousing.

CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Throughout 2020 and early 2021 speculation

Despite the urgency to have these new

that a tsunami of insolvencies is on the horizon

processes in place, until 31 March 2021 we had

dominated conversation and media. This was

just 5 debt restructuring processes commence

driven by the logical assumption that once

and 38 entities accessing the temporary

temporary insolvency protections ended on

restructuring relief.

31 December 2020 the approximately 4,000 entities that would normally have entered

OUTLOOK

insolvency would start to flow through with a further spike once JobKeeper payments end

Accommodation and retail trade are two

at the end of March 2021.

sectors where COVID-19 restrictions had This speculation led to the government

significant impact and therefore could be

implementing insolvency reforms commencing

expected to move up the order in 2021.

1 January 2021 being:

However, our report shows these industries

z Debt restructuring process for small business.

are actually paying better than last year while other sectors that experianced less

z Temporary restructuring relief.

significant impacts, such as construction,

z Simplified liquidations. (See here for more detail on these reforms)

have deteriorated.

Graph 4: Corporate insolvencies by industry Information, media & telecommunications Wholesale trade Electricity, gas, water & waste services Professional, scientiﬁc & technical services FIS – other ﬁnancial services Manufacturing Rental, hiring & real estate services Transport, postal & warehousing Retail trade Accommodation & food services Construction Other (business & personal) services 0

500

1000

1500

n 2020

2000

2500

3000

3500

n 2019

Data sourced from Australian Securities and Investments Commission Series 1A Companies entering external administration and controller appointments by industry. Reproduced with permission.

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA

Graph 5: Small business reform notices Actual 1 January 2021 – 31 March 2021 50 40 30 20 10 0 1/1/21

8/1/21

15/1/21 22/1/21 29/1/21

5/2/21

Restructuring Relief Notices

12/2/21 19/2/21 26/2/21

5/3/21

12/3/21 19/3/21 26/3/21

Restructuring Practioner appointed

All Notices

Data sourced from Australian Securities and Investments Commission Published Notices website. Reproduced with permission.

“While we expected a tsunami of insolvencies to have occurred at the end of October before stimulus and protection measures were extended, we now expect a more gradual dialling up of insolvencies to traditional levels over the next six months and then higher over the 12 months after that.” – John Winter, ARITA Further Graph 5 (above) shows while government expected activity to be in the 1,000s, actual activity has been in the 10s and it wasn’t until: z 11 January 2021 for the first temporary relief notice to be lodged z 14 February 2021 for the first appointment of a Restructuring Practitioner z 12 companies lodged notice on 31 March 2021

OUTLOOK An increase in insolvencies is expected in the April to June quarter as unviable businesses and zombie companies wind up following the end of JobKeeper payments. Given the positive economic indicators prevalent in early 2021, future quarters are

being the last day possible to access the

likely to see insolvencies at similar levels as

3 month relief period.

2019.

The absence of a spike in insolvencies does not come as a surprise to many AICM members due to the improved status of their ledgers and their willingness to support viable customers. A return to normal levels of insolvencies presents

CREDIT MANAGEMENT IN AUSTRALIA • April 2021

“More than four new businesses were established for every one that closed in a pandemic-led 2020” – Simon Bligh, illion

“In normal circumstances, personal insolvencies would be expected to increase within weeks of an economic shock. That is certainly what happened during the GFC. However, as will be explored below, circumstances were especially abnormal in 2020.” – Nick Jenkins, Equifax Australia a challenge to credit professionals as they balance

Personal insolvencies

competing priorities including:

The trends with personal insolvency have

z Supporting their business to generate sales.

generally matched corporate insolvency

z Managing an escalation in risk.

appointments. Since late March 2020 personal

z Working closely to support existing customers. As existing customers show signs of cashflow pressures, credit professionals will be calling on their experience, systems and data to understand which customers are:

insolvencies have declined to record low levels following the implementation of temporary protections, JobKeeper minimising impacts of businesses forced to close or alter operations and access to superannuation funds. As we entered COVID-19 personal insolvencies peaked at 1,015 in the fortnight ending 19 April 2020. Following this

z Experiencing short term issues but are

we saw continued decline until a record low in

engaging with them openly to demonstrate

the fortnight ending 10 January 2021, as seen in

their capacity to return to a viable operation.

Graph 6 (below).

z Not engaging with them but require further attention to create engagement and support

Following the end of the temporary protections on

through to normal trading.

31 December 2020, there has been some increase

z Unviable and should be encouraged to enter

in personal insolvencies in a similar fashion as in prior years however still at very low numbers.

an insolvency process.

Graph 6: Personal insolvencies 1 July 2019 to 7 March 2021

1400

Seasonal spike

1200 1000 800 600 400 200

Seasonal but lowest on record

1 0 0 21 19 19 20 19 20 20 20 19 20 20 019 20 20 19 20 20 9 20 02 02 02 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 r2 201 ul 2 ct b 2 Mar 2 Apr ov ec ov un ct ug ay ep an ec ep Jul ov ec 4 Jan 7 Ma e O J 4J ug N J D S A N O S F D M 1 2 D N A 4 9 6 1 3 1 1 2 9 8 4 3 1 1 9 o 26 17 11 27 29 to to o2 o6 to to to to to to o2 to o2 o2 to t to ul t r to to to nt gt ct ov eb ep 9 to un y to Jun ug ep b t Mar t ct Jul 1J Oc Ap ec 11 Ja ov Au Jan 2F 3S 9O 9J Fe 1 201 8N Ma 1S 27 De 6 D 6A 21 N 2 3 4 1 2 2 1 l 9 2 2 1 0 2 4 6 4 u 6 1 1 1 J 1 29

Data sourced from Australian Financial Security Authority Fortnightly bankruptcy and personal insolvency statistics Reproduced with permission.

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA

Graph 7: Business v non-business personal insolvencies 1 July 2019 to 7 March 2021 1400 1200 1000 800 600 400 200 0

9 0 9 0 0 0 21 21 19 19 20 20 20 20 20 20 20 2020 19 20 01 01 02 02 02 02 20 20 20 20 20 20 20 20 20 20 20 20 20 l2 p 2 Oct 2 ar v2 c 2 Jan b 2 Mar pr ov ec ov un ct ug ay an ec ep Ju o e e M J A N J D A N O S F D M 2 D N 4 3 1 4 3 2 6 14 19 9 7 9 26 22 o7 o6 17 o1 o 1 l to 9 to to to to to o2 o 2 n to o 2 n to t to to t to o2 u bt vt to pt o1 nt pr ug ep a b t Mar ct Ju ct un ug vt 1J Fe Oc Oc Ju a Se 9t No ay J J A S e e A e o A J 7 1 1 2 3 9 9 1 F 1 8 M 1 D 2 D 6 N 0 2 2 1 1 2 2 1 2 9 26 13 24 4 10 l2 16 14 16 Ju 29 ul 4J

1 l to

ug 1A

e 8S

Not in a business or company*

In a business or company*

Total

*You are in a business or company if you: – have traded as a sole trader, including as a contractor, sub-contractor or similar, or been involved in a partnership, and/or – been a director/secretary or held a management role in a company. Data sourced from Australian Financial Security Authority Fortnightly bankruptcy and personal insolvency statistics Reproduced with permission.

When looking at the number of business related

which aligns with the absence of a spike in

personal insolvencies (where the individual has

corporate insolvency, unemployment trends and

a connection with a business as a sole trader

may indicate that those missed by government

or owner), Graph 7 (above) shows that the

support payments have sought the relief of

proportion of business and non-business related

bankruptcy.

insolvencies has been relatively uniform with an average of 26.3% personal insolvencies being business related between 1 July 2019 and 7 March 2021. However, when we analyse the more recent periods in Graph 8 (next page) we see a slight change:

This pressure on individuals is further indicated by Graph 9 (next page) which shows relatively consistent drops in types of appointments with a proportional increase in debtors petitions in recent months.

z 12 months from 9 March 2020 to 7 March 2021 saw 25.2% business related appointments

The management of small business and consumer

z 6 months to 7 March 2021 saw 25.4% business related appointments

need to utilise their experience and best practice

z 3 months to 7 March 2021 saw 23.3% business related appointments

financial distress access the appropriate pathways,

debts will be an area credit professionals will processes to ensure individuals experiencing including self help via repayment arrangements, accessing financial hardship support or moving

While relatively small, these changes indicate more

to resolve insurmountable debts via a bankruptcy

pressure is being felt by those not in business

process.

CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Last 12 Months

last 3 months

last 6 montths

Graph 8: Business v non-business personal insolvencies Non-business Non-business Last 12 months 74.8%

Business

Last 6 months

25.2%

74.6%

25.4%

Non-bus

Business

Last 3 months 76.7%

23.3%

 Business  Non-business Data sourced from Australian Financial Security Authority Fortnightly bankruptcy and personal insolvency statistics Reproduced with permission.

Graph 9: Types of personal insolvency appointments 6 April 2020 to 21 February 2021 800 700 600 500 400 300 200 100 0

1 1 1 1 020 020 020 020 020 020 020 020 020 020 020 020 020 020 020 020 020 020 202 020 202 202 202 ril 2 May 2 May 2 May 2 une 2 une 2 July 2 July 2 ust 2 ust 2 ber 2 ber 2 ber 2 ber 2 ber 2 ber 2 ber 2 ber 2 ber 2 uary uary uary uary g g Ap o o r r J J n n m m m m m m m t t 2 1 u u 6 7 3 b b 9 a a 4 c c e e e e e e e 1 8 1 3 1 1 o v 2 c c O O o Fe Fe o2 3 A Sept Sept 9A ov ov 4J 0J to to No 3 De 7 De ril t 18 l to et y to y to o4 ly t ly to o2 1N o1 o 2 y to 7 to 21 5N Ap 4 Ma 8 Ma June June pri Jun 13 Ju st t t to 6 to 20 ber t ber to er to r to 1 r to 29 r to 1 r to 2 ber t ary t u r y J u r 9 a 20 6A 1 1 5 a 2 g 7 u u s r m e 1 e e b e o m 2 n n ru Au ugu mbe pte 5 Oct Octo vemb emb vemb emb Dece 11 Ja 25 Ja eb 10 A Se c v 8F 19 2 No 24 Septe 21 28 No 0 No 4 De 6 1 3 1 7

Debt agreements and personal insolvency agreements Debtor’s petition Sequestration order Total bankruptcies** Total personal insolvencies*** ** Total bankruptcies include debtor's petitions and sequestration orders. *** Total personal insolvencies includes bankruptcies, deceased estates, debt agreements and personal insolvency agreements. Deceased estates are not displayed individually. AFSA provides explanations of these different types of appointments; Sequestration order, Debt agreements, Personal insolvency agreements, and Debtors petition. Data sourced from Australian Financial Security Authority Fortnightly bankruptcy and personal insolvency statistics Reproduced with permission.

OUTLOOK The outlook for personal insolvency is equally as murky as corporate insolvencies. Brad Walters of Equifax thinks the withdrawal of government stimulus will mean “the results can only go one way. The withdrawal of that type of cash will start to uncover financially stressed consumers that will need help, or the inevitable will occur. The million-dollar question is how high and how quick”. Additionally, an expected increase in corporate insolvencies is likely to impact employment and increase stress for consumers. On the positive side, consumer confidence is at record highs and we are experiencing strong improvement in unemployment numbers.

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA

Tips FOR MANAGING RISK How to manage risk

Understand your customers

Want to reduce your risk exposure to customers

z Continued certainty means understanding your customer will be a key way to manage risk.

and suppliers? I’d recommend a laser focus, especially throughout the rest of 2021, on the

z Get to know your business clients by finding out:

following three things: 1) Due diligence reviews

c Who their customers are.

How do you review and onboard customers,

c What supply risk(s) they face from others.

suppliers and other third parties? Do you apply

c Whether they have increased operating

a fit-for-purpose approach based on the size and scale of your risk exposure?

costs that may impact their viability. c Whether they have trading restrictions risks. c Whether they are selling discretionary items.

2) Monitoring and surveillance Do you use commercial alerts, configured to

c Whether they are vulnerable to technology

disruption.

your needs, to apply the right triggers and monitor for early warning signs? 3) Strategic risk oversight How are you identifying potential phoenix operators, and how are you evaluating your indirect risk exposure to the credit risk contagion from your accounts’ counterparties? – Brad Walters, Equifax

– Andrew Spring MICM, Jirsch Sutherland

z Use every tool in a credit professionals arsenal including: c Understanding industry trends. c External data and analysing their exposures. c Thorough risk assessment. c Direct Relationships with customers. c Sales and organisational intelligence. c A network of credit professionals across

industries and sectors.

New reforms z Ensure you are familiar with the new reforms (see ARITA guide and other information here). z Key tips for assessing Debt Restructuring plans: c Consider the qualifications and experience

of the Restructuring Practitioner. c Apply a commercial lens and ask is this in

the best interests of our business. c Accessing information from your network in

the credit industry. c Use a similar approach as a Deed of

Company Arrangement proposal while being aware of the differences.

CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Outlook z While uncertainty remains high, the answers will be found by keeping focus on the fundamental skills of a credit professional, understanding your customer, understanding your industry and ensuring records and securities are accurate and up to date. With this in place and access to legal, insolvency and debt collection experts a solution will be found. z Credit professionals will need to work even closer with their sales teams to increase sales without increasing risk and ensuring efforts are not deployed in pursuit of unviable customers.

Insolvency

Global insolvencies

- how we stack up - and what to expect next By Andrew Spring MICM*

Andrew Spring MICM

In 2020, there was plenty of discussion about the looming global insolvency time bomb as a result of the pandemic, with predictions of an insolvency “tsunami” being touted on street ‘zoom’ corners and throughout mainstream media. However, with governments around the world scrambling to save companies battered by the pandemic and rolling out major support measures, those figures have been readjusted in many parts of the world.

The various business support measures implemented at all levels of government have resulted in the unlikely decrease in businesses entering external administration during 2020, highlighted in the recent AICM Risk Report 2021. However, locally, and around the world, zombie companies are coming to the surface as the measures come to an end. In its report 2021-2022: Vaccine Economics, trade credit insurer Euler Hermes states: “The broad-based extension of ‘temporary’ support ➤

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 29

Insolvency

How many insolvencies will the next two years bring? Projected increase in business insolvencies in 2021 and 2022 compared to 2019 (%) NORTH AMERICA INDEX USA BRAZIL UK CHINA FRANCE GERMANY GLOBAL INDEX SOUTH AFRICA JAPAN INDIA SOUTH KOREA AUSTRALIA NEW ZEALAND ASIA PACIFIC INDEX -10 %

10 %

NORTH AMERICA / GLOBAL / ASIA PACIFIC INDEX 2021 -10

Source: Euler Hermes

measures into 2021 is likely to keep insolvencies artificially lower for longer but their phasing out should start an increase in insolvencies as early as the second half of 2021. “The phasing out of support measures remains critical and uncertain. Any new extension in terms of timing or magnitude would lead to a modified outlook, with less insolvencies in the short term but more insolvencies in the long term due to the increased ‘zombification’ of companies, notably in the sectors most impacted by the crisis.”

20 %

30 %

40 %

50 %

NORTH AMERICA / GLOBAL / ASIA PACIFIC INDEX 2022 10

Australia’s handling of the health crisis has led to a largely re-opened economic marketplace. As such, it seems likely that any further government support will be targeted rather than all-encompassing. Therefore, there is a degree of confidence in the conditions that are relied upon in the forecasts. According to Euler Hermes’ Global Insolvency Index, Australia’s insolvencies are predicted to be 10 per cent higher in 2021 and 10 per cent higher in 2022 compared to 2019. That compares to a 41 per cent

60 %

2021 50

2022 60

www.jirschsutherland.com.au

decrease in 2020. Over the ditch, New Zealand is also predicted to see a 10 per cent increase in 2021 and 2022, after experiencing an 11 per cent decrease in insolvencies in 2019 and 16 per cent decrease in 2020. The Index also predicts that the Asia-Pacific region will outperform other regions of the world, with a 4 per cent increase in insolvencies in 2021 and 18 per cent next year compared to 2019. Based on the above graphic, a number of countries are predicted to experience, if not an insolvency

“Australia’s handling of the health crisis has led to a largely re-opened economic marketplace. As such, it seems likely that any further government support will be targeted rather than all-encompassing.” 30 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Insolvency

“In Australia, government support has cushioned the fall and put the country in a strong position compared with many other regions. But now that the stimulus “well” has dried up and the expenses still need to be paid, some businesses will have accumulated and potentially further losses that will result in them requiring the support of our insolvency regime. ” “tsunami”, then perhaps a “king tide”. However, anecdotally, we are hearing from our colleagues across the globe that much will depend on the attitude of each country’s governments to extend support measures to manage the fall out. We have seen that the UK government has extended its “furlough” support, which provides the equivalent of 80% wage support to employees that have been “stood down” due to the pandemic, until September 2021. In France, over half a trillion Euro in support measures have been announced, including continued forbearance measures relieving distressed companies of their obligation to file for insolvency. And in Germany, an impending election this year has been suggested as a further motivation for continued support from government. As for the USA and Brazil, the vaccination program and the continued removal of trading restrictions, in contrast to some of the European countries’ approaches, seem to coincide with a predicted accelerated requirement for insolvency appointments in these countries. Therefore, it may be that the insolvency levels predicted above, include a timing element, may scarily extend the financial burden for some economies past the 2022 timeframe explored above. Which country gets it right economically is anyone’s guess and will only be measurable with the benefit of hindsight – but I am not disappointed to be situated “down under” right now.

In Australia, government support has cushioned the fall and put the country in a strong position compared with many other regions. But now that the stimulus “well” has dried up and the expenses still need to be paid, some businesses will have accumulated and potentially further losses that will result in them requiring the support of our insolvency regime. At this point, it is important for all stakeholders, but particularly creditors to be aware that the insolvency framework in Australia is a safety net. When accessed and utilised correctly, at the first signs of distress it can protect the debtor, the employees, the customers and the creditors from unnecessary loss.

Recent observations – “around the grounds” Some recent observations from my colleagues around the country provide some insight into the moving risk landscape for creditors in a post-stimulus marketplace: From my West Australian colleagues, we are hearing that “There’s a lot of legacy ATO debt that will raise its head once the ATO initiates collection again.” The Queenslanders note that the ATO is still not winding up companies yet. “It remains the sleeping giant, there’s definitely been an uptick in enquiries since January, and particularly in the past few weeks. May will be a real ‘tell’ as to what lies ahead.” Victorian Partners believe an increase in insolvencies will come

in late May/June. “Following the extended lockdown in Melbourne, there are more people about and back in their offices, and more discussions about how businesses are faring is taking place”. Our Newcastle office has also noticed a small increase in enquiries, saying: “We are now seeing the smarter people who can see the writing on the wall. But from what I’m seeing, many still have their heads in the sand.” As for Sydney, we have noticed a change in communication from ‘We’ll wait and see’ to ‘We need to act’. The common theme is around deferred liabilities, particularly tax liabilities, and the increasing pressure to pay. Overall, the message continues to be “remain vigilant”. The world is experiencing a common event but is implementing a variety of wide ranging strategies to combat it. It is unlikely that anyone will be completely insulated from the impact, but some trading partners may show the signs of distress at different stages depending on government responses. As always, caution should be shown when considering the risk profiling for customers. But, positively, the forecasts do show that Australia’s “scarring” is unlikely to be as gruesome as some other nations.

*Andrew Spring MICM Partner, Jirsch Sutherland T: 1300 547 724 E: andrews@jirschsutherland.com.au

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Insolvency

New insolvency laws bring small business funding needs into focus By Craig Michie* With new insolvency laws in play in 2021 small businesses have broader options around restructuring – but they need the right funding in place as the new options may exacerbate pressure on their cashflow.

Craig Michie

Blair Pleash

When asked what was required for small business to rebound from the COVID-19 recession, one of the key factors named by Australia’s SME owners was insolvency law reform. In ScotPac’s late 2020 SME Growth Index research, small business leaders identified that permanent insolvency changes were required outside of the rushed and temporary safe harbour rulings put in place to handle the unique circumstances of the pandemic in 2020. The Federal Government delivered, with new insolvency laws coming into effect on January 1 2021. Aware that these changes would have an impact on many small businesses, ScotPac partnered with Blair Pleash, insolvency and restructuring partner at Hall Chadwick, to run information sessions for business owners and their advisors outlining the implications of the new laws.

32 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

What SME directors and their advisors need to know In 2020 temporary protections around insolvency safeguarded directors from personal liability during insolvent trading, with the law being hastily changed so that creditors had to be owed $20,000 (not $2,000) before they could make a statutory demand. Under these temporary rules debtors had a full six months, not 21 days, to comply with a statutory demand. Effectively what the government has done in the legislation in effect from January 1 2021 is to remove these temporary measures and replace them with a more permanent framework designed to assist the small business sector with COVID recovery. Under these new laws companies can formally restructure, with the option of small business restructuring for those companies that may not be able to afford the voluntary administration process.

Insolvency

The small business restructuring option is available for eligible businesses who have less than $1 million in liabilities, and who have their tax lodgements (although not necessarily payments) up to date and their employee entitlements paid up. These eligible businesses can access restructuring under a debtor in possession model – they, rather than an external party, are the ones who stay in control of the business. Under this model directors are entitled to incur debts in the ordinary course of business while a registered small business restructuring practitioner helps put together a proposal for creditors and assists and guides the directors behind the scenes. The aim is to reduce the cost of restructuring compared to external administration and to help those small businesses for whom cost considerations puts voluntary administration out of reach. Hall Chadwick’s Blair Pleash says for those small businesses who have less than $1 million in liabilities, the main attraction of this new model is that directors will be more likely to choose this option because the implication is that they can remain in control of the business. The other, perhaps less obvious, implication of the new system is that there is no equivalent protection of trade suppliers during the restructuring period. This increases the likelihood that suppliers may withdraw supply or put it as “cash on delivery” as opposed to offering credit to a business while it is restructuring. This could create very serious cashflow consequences for a small business looking to restructure. The Australian small business sector has been dealing with the staged withdrawal of government pandemic assistance since late 2020, culminating in late March 2021 with the end of the JobKeeper scheme so many SMEs have relied on to survive the past year. Lawmakers believe ending government assistance allows the market to adjust itself and that the new insolvency laws will see any business experiencing cashflow problems realising that they can access more permanent assistance measures rather than just close their doors and liquidate. In theory this is correct – as long as small business owners are prepared to take fast and early steps to secure their cashflow to handle the unintended consequences of the new restructuring measures.

How to secure cashflow while restructuring Directors should be looking to ensure financial accounts are up to date. This is the starting point to see where they are at after having relied on assistance such as JobKeeper. It’s also crucial to get ATO lodgements up to date, so that they are eligible to access this new restructuring mechanism if restructuring is required.

SMEs need to look at budgets and formulate a month, 3-month and 6-month forecast to get an accurate picture. Actions from this point really depend on how the business is tracking – if things are going well there is probably less need for external assistance, but the reality is that the recovery will be unpredictable and uncertainty around trade and border closures may remain for some time. Early consultation with a trusted strategic advisor, such as an accountant, bookkeeper, business consultant, finance broker or solicitor, could help a business plan for the worstcase scenario and for contingencies. By acting early and making sure they get expert advice, business owners can open up access to the broadest range of financing options and guidance around how to protect both the company and their own personal financial position as directors. Simply placing a business into administration and hoping for the best is not a great idea and is very likely to fail. Sufficient financial resources are needed to get through a period of administration, and access to the right finance offers the ability to restore profitability as well as to pay whatever proposal is put to creditors. It’s important for small business directors to be well versed in what funding options are useful in restructuring scenarios, because cashflow pressures are likely to increase due to the absence of creditor support under the new system. Look at the balance sheet to see what assets can be financed. If a business is selling B2B, they may be able to access finance via their receivables. Directors and advisors have to be conscious that it’s ➤

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 33

Insolvency

not just what’s on the books: some styles of funding offer mechanisms to free up liquidity in these assets, assisting with cashflow requirements to help a business get through restructure successfully. Try to work with a lender who makes a real effort to maximise the business’ leverage against these types of assets. In the November 2020 ScotPac SME Growth Index, small businesses flagged their intentions to keep trying new ways to fund their businesses. Nearly two thirds planned to reassess the way they fund their business, with almost a quarter planning to reassess their actual funding provider, and COVID made business owners more open to using multiple funders, increasingly non-bank lenders. One in 12 small businesses say they have already added non-bank funding facilities to deal with the impact of supply chain and revenue issues created by the shutdown. A further one in 8 plan to add non-bank funding to their future funding mix.

Funding that suits restructuring The reality is that a business has finite resources, so they might only get one chance to successfully restructure. Acting early gives more options with restructuring and refinancing. Look at the balance sheet, see what’s available from a security point of view and ensure that your chosen funder has a clear understanding of the business’ requirements. Any business owner who might need to restructure in 2021 but isn’t already working to secure the right funding might just have their head in the sand. JobKeeper relieved cashflow pressure for many businesses but when support measures are withdrawn it is prudent to act early to replace missing sources of cashflow. Small business leaders were spot on when they indicated in the November 2020 SME Growth Index that one of the top challenges they must overcome in 2021 was avoiding insolvency. Conditions were so challenging that at the time of the research (September and October 2020) one in three small businesses indicated the need to sell or close if conditions didn’t significantly improve. Credit managers would be aware of the need for small businesses not to get caught short as the protection of government stimulus tapers off. It’s important for business owners to take the time now to make sure they have the right finance in place.

*Craig Michie Group Executive, ScotPac E: michiec@scotpac.com.au T: 1300 209 417 ScotPac is Australia and New Zealand’s largest non-bank SME lender, and for more than 30 years has helped thousands of business owners with the working capital they need to succeed.

34 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Consumer Credit

Open banking in Australia So, what’s the big deal about the implementation of open banking in Australia… and how does it work? In this article I’ll explain how open banking will change our financial landscape – and what credit risk managers should be thinking about now. By Jarrid Ohanessian*

Jarrid Ohanessian

I’m often asked about the implementation of open banking in Australia – and how it all works. Open Banking is the first instance of what is called the Consumer Data Right (CDR). In time we will also have Energy and Telecommunications as CDRs – the idea is that these data sets are the consumer’s data and they can use it to their advantage to benefit themselves through, for example, cheaper services. Put simply, open banking is a significant shift in approach which will give consumers control over what they can do with their own data. It takes us beyond existing financial technologies and into a fully regulated environment where consumers have much more choice over a wide range of financial services and products. The rules that govern open banking have been put in place by the ACCC – and are currently being finetuned. The process of implementing open banking is well underway, and the ACCC has handed it over to The Treasury. Importantly, banking is the first industry where CDR will enable consumers to decide who can view and utilise their data, for how long, and for what purpose – and they can revoke this access at any time. This puts consumers firmly in control and creates a standardised customer experience, not only making it easy for

consumers to use, but inspiring trust in open banking itself. It’s a significant shift from the status quo today, where the banks have control. With the Consumer Data Right (CDR) now live, consumers can share their banking data with third party institutions such as banks, credit unions, fintechs, online lenders and money management apps. It’s a great way for them to share their data, giving them more control and encouraging widespread competition. There’s a roadmap in place for full implementation, with all banks slated to be sharing their data into the ecosystem by February 2022. All this data is great for consumers, but it is also great for providers of financial products because they can make cheaper, quicker, better decisions and create products tailored to the individual. This data will level the playing field between large banks with the expertise and scale to do very smart things and the fintechs with the agility and smarts … to do very smart things. Everyone will benefit from the resultant innovation. With a direct channel of access to your data, financial service providers will be able to supply faster, highly tailored advice. You’ll be able to safely link your data to more applications to receive advice, automate processes and ultimately make better decisions in a less timeconsuming way. ➤

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 35

Consumer Credit

Immediate usages include: — understanding spend habits, — budgeting, — determining affordability and understanding investment options, — switching services with less hassle, and — ability to enter arrangements to ‘set and forget’ about day to day banking tasks. Proposed developments will expand these use cases to even further simplify banking and payments. Here’s the important bit though – it’s not just good for consumers, it’s good for lenders too. Open banking means consumers can share their banking data at the tap of a button. It gives all lenders the same level of access to customer data – something that was previously very much in the domain of the big banks.

As a result of the UK’s 2018 Second Payment Services Directive (PSD2), hundreds of banks and fintechs have joined this new ecosystem, with more than 2.5 million consumers and businesses now using open banking products. With a strong and centralised regulatory framework and strict enforcement of technical and customer experience standards, the UK’s open banking system directly inspired the Australian ecosystem. While this is a step forward, the UK’s open banking system has been operational for three years now but it’s still very much a work in progress. To encourage higher participation and more data sharing and innovation in Australia, consumer education and trust will be the key to the successful implementation of open banking here.

Lessons from the UK

What should you do now?

To be completely successful, open banking requires full utilisation and cooperation from all players, and this was pioneered in a big way in the UK.

Accreditation is the door financial institutions need to go through in order to get into the open banking room. Gaining accreditation for

36 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

direct access to open banking data is currently a lengthy and expensive process, which includes meeting all of the obligations, completing a submission and a review process. Having the highest levels of information security to deal with all of this data securely is mandatory. Once accredited, you can then either build your own infrastructure, or partner with a third party. illion has been through the process ourselves – twice in fact – and it’s definitely something we’re keen to help our customers navigate. We’ve written before about the significant cost accreditation imposes on businesses – this puts at risk the benefits of CDR not being fully realised. Spending an average of $250,000 and many months to get accredited, especially at this early stage, can give organisations a first mover advantage, but many organisations will not have the resources to do this. illion’s Open Data Solutions and Credit Simple are now ADRs

Consumer Credit

– Accredited Data Recipients – a process that took us nearly 4 months from end-to-end and involves ongoing hosting and maintenance too. Why did we accredit twice? We stand for the consumer via Credit Simple and we help financial institutions via Open Data Solutions. The ACCC knows that this cost does present a barrier in the uptake of open banking, proposing a second tier of ADRs known as ‘Trusted advisors’, with a less involved accreditation process and a restricted level of data access, but this could still be a long way off. We’ll continue to advocate for all users of open banking data to have all the information that is needed for them to serve their customers.

Using an intermediary Although the rules and legislation are not yet clear for accreditation, it makes sense that once you are ready to consume open banking information, you should focus on growing your business, rather than building the technology that is required to access this information. As an option, consider partnering with an intermediary like illion Open Data Solutions – we can provide a full open banking solution and manage the process on your behalf. Because the user flow and customer dashboard are standardised, we’ve built a product that can be white labelled for your businesses with significantly less time and cost involved and no ongoing maintenance, but with rigorous security and technical support provided.

Where to from here? Get in touch with us and start your open banking journey. Whether you’re looking to gain full accreditation or partner with us for a white label solution, illion’s Open Data Solutions has the tools to support you. *Jarrid Ohanessian GM of Open Data Solutions illion E: Jarrid.ohanessian@illion.com.au

SIDEBAR: There are significant benefits for lenders that can be overlooked. Benefits of open banking include: 1. Speed. Access to customer data is in real time, shared directly with the customer’s consent, which means you can process applications more quickly and efficiently. 2. Personalisation. Ongoing access to live data feeds allow for enhanced services for consumers to choose to adopt. 3. Compliance. As data is more accurate and timelier, complying with responsible lending obligations can become much more straightforward. Let’s look briefly at each of these in a little more detail… 1. Faster, more efficient data sharing With customer data shared directly and in real time, open banking makes it faster for consumers to apply for banking products or switch institutions, and get approved – all it takes is a few clicks to share their data. This gives lenders the ability to process applications quickly and efficiently, significantly reducing the risk of losing any customers already in the pipeline. Lenders can be certain of these faster processing times and use them as a selling point, which can also aid in acquisition of new customers. 2. A more personalised experience Every day many of us interact with various forms of social media and generate plenitudes of data which constitutes our online persona. Have you ever asked for a copy of that data? Tech giants are obliged to provide it, but a 600-page pdf document is hardly useful. I want to be able to approach my favourite apparel stores with that data and be told what I might like to buy. The consumer data right not only gives individuals the right to their data but will ensure it is in a useful format. With that data, many of the friction points experienced throughout the customer lifecycle may be alleviated. Data aggregation services have already been adopted to provide: – Faster onboarding – Importing of bank profile details from an external source – Faster precision and less room for human error – Uniform decision making with greater transparency – Appreciable customer insight – Tailored recommendations. As data sharing increases visibility we draw closer to provision of better goods and services. 3. Meet your responsible lending obligations With more precise transactional data, it’s possible to make better decisions about the suitability of a loan for a particular customer. Open banking provides CDR information quickly and digitally. When combined with data enrichment capabilities, such as illion’s categorisation and affordability analytics, lenders can quickly identify spending behaviour on specific income and expense buckets and identify any red flags.

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 37

Consumer Credit

Could outsourced customer re-engagement campaigns be a better option By Andrew Smith MICM CCE*

Andrew Smith MICM CCE

It’s hard enough to handle unprecedented levels of debt without having to worry about the increased hardship and vulnerability many consumers and small businesses are experiencing due to the current pandemic. But Credit Managers of Essential service providers are finding themselves in an increasingly challenging situation. Precariously balancing commercial outcomes and targets, whilst striving for a good customer experience, and with referrals to outsourced debt collection suspended for many, is by no means easy! And as government support subsides, moratoriums end and outsourced collections activities resume in the second quarter of 2021, a tidal wave of hardship is expected into the next financial year.

The good news though is help is at hand in the form of innovative outsourced collections partners and it may be time for Credit Managers to rethink the traditional debt collection approach entirely. Customer re-engagement campaigns are a newly considered approach but executed with the right conversational skillsets, technology, communication strategies and experienced management they can get impressive results both from a customer experience point of view and in monetary terms. But more on that later. Firstly, let’s take a closer look at exactly how much debt levels have increased within essential services and why there is a need for a new approach when debt collection resumes.

“Customer re-engagement campaigns are a newly considered approach but executed with the right conversational skillsets, technology, communication strategies and experienced management they can get impressive results.”

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Consumer Credit

“Figures from the Australian Energy Regulator show that Household electricity 90-day debt grew by $15 million from the end of March through to October, a 14 per cent jump, with the average amount of debt owed up 17 per cent to more than $1,100.” Debt collection in the Covid environment The COVID-19 pandemic has contributed to higher bills for many with remote working conditions driving up Energy and Water use within the home. The industry estimates residential energy consumption has risen between 15 and 20 per cent due to the pandemic. Add to this ill health or lost work due to COVID-19, and many could be facing financial hardship. In response to the expected rise in hardship due to the COVID-19 crisis, the National Cabinet (the Heads of Commonwealth, State and Territory Governments) announced the following principles to apply to both

utility companies, telecommunications and council rates: z Offering flexible payment options to all households in financial distress z Not disconnecting or restricting supply to those in financial stress z Deferring debt recovery proceedings and credit default listings z Waiving late fees and interest charges on debt (*1)

environment. However, unsurprisingly perhaps, in the wake of these guidelines, many organisations have cut back on any contact that may be perceived as a ‘collections activity’, erring on the side of caution in a highly regulated and media sensitive environment. In some cases, they may not have engaged with customers since March. In the meantime, the debt remains and in most cases is accruing on a daily basis.

There is no doubt such moratoriums on disconnections, restrictions and debt recovery services have provided some much-needed breathing space for consumers struggling to negotiate the challenges of the COVID-19

Energy and water statistics on increased debt For Victorian waterboards, the Essential Services Commission has reported an increase of 5% increase in hardship and as many

➤

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 39

Consumer Credit

as 775 Victorians applying for Utility Relief Grants (URGS) each week on average. (*2) Figures from the Australian Energy Regulator show that Household electricity 90-day debt grew by $15 million from the end of March through to October, a 14 per cent jump, with the average amount of debt owed up 17 per cent to more than $1,100. It is a similar story for small business owners with the total amount of 90-day debt in the same period rising 45 per cent. That is an increase of $13 million to almost $42 million, and small businesses on average owed $2,690, up 40 per cent. Despite these increases in 90-day debt, there was a 15 per cent drop in customers on payment plans and a 7 per cent drop in hardship arrangements during March to October. (*3) Many customers it seems have deferred payment citing financial stress, but this isn’t necessarily the best thing for them as their debt is simply getting bigger. Many more vulnerable customers in hardship may not have been identified due to the lack of collection activity or contact. Others may be experiencing hardship for the first time and not familiar with the help available. Or organisations may simply be struggling with the increased volume of calls and unable to get specialised and skilled resources providing the right assistance to the people who need it. Customers need to be re-engaged so that: — debt can start to be reduced for both the individual and the organisation — customers experiencing hardship can be identified at an early stage to get the assistance they need — where possible customers can be set up on sustainable payment plans or placed into hardship programs to start chipping away at their debt — the right support and assistance

“Many customers it seems have deferred payment citing financial stress, but this isn’t necessarily the best thing for them as their debt is simply getting bigger.” can be offered to vulnerable customers whether that be flexible solutions or external support services — disconnections can start to take place again in certain situations to prevent spiralling debt.

The problem with standard outsourced debt collection procedures in the current environment Traditionally, Energy companies would refer only accounts after disconnection. In the current environment few accounts have been disconnected and the sheer volume of accounts that will require some sort of follow up or collection activity after March, may well be too high for many organisations to effectively manage inhouse. On the other hand, if they refer accounts through to a third party for usual debt collection activities there are several risks to consider. For instance, many current outsourced collection procedures rely on outlining the consequences of nonpayment to a customer with a clear escalation process eg. disconnection or restriction/referral to a debt collection agency/credit default listing/legal action/interest and added fees etc. Also, KPI’s and call quality frameworks can be heavily weighted towards monetary targets and compliance with little consideration of what a good quality collections conversation looks like. The result if this is applied in the current environment? Further disengagement with customers, higher levels of vulnerable customers not getting the assistance and support required, rise in complaints and a heightened risk of adverse media attention. In addition, collection

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staff handling increased volumes of challenging calls can easily experience burnout. But what is the alternative, as money still needs to be collected?

Customer re-engagement campaigns: An alternative approach Changing times require a change of response. Now is the time to look for an innovative outsourced collections provider that can handle a large volume of accounts sensitively, to effectively re-engage customers with clear well-defined outcomes in mind, such as: — payment of account from those that have capacity — set up of sustainable payment arrangements that are suited to individual circumstances — identification, assistance, and support of vulnerable customers — recommendation for entering hardship programs — management of hardship customers if required — recommended write offs — referrals for disconnection where appropriate — timely referral of any complaints to keep ombudsman cases down — successful completion of Utility Relief Grants

Key success factors for successful customer re-engagement Below are some factors for consideration that are critical to the success of any customer re-engagement campaigns:

1. Highly Skilled Operators – A campaign such as this requires highly skilled operators that are

Consumer Credit

trained in having intelligent and genuine collections conversations. They should be easily able to build trust and rapport with the customer and know how to apply empathy. Strong listening skills are essential along with knowing the right questions to ask respectfully to understand a customer’s financial situation. There will still need to be consequences for non-payment of debt where required but instead of outlining these to the customer as a fear tactic, a highly skilled operator would instead sell the benefits of payment eg. ‘By setting up this payment plan and keeping to it we can reduce the debt, protect the account from any further action, and relieve some of the stress for you.’

2. Strong focus on Hardship and Vulnerability – Staff employed to do these campaigns need to have a heightened awareness of hardship and vulnerability. Understanding red flags and triggers to better identify vulnerable customers and to ensure they get the right assistance and support. Some forward thinking outsourced providers will have specialist hardship divisions that can assist in ongoing management of hardship accounts.

3. Wide range of communication options – Any re-engagement campaigns should include a full range of communication options allowing the customer to choose their preferred way to engage regarding their account. Whether it be automated options such as interactive voice or text messaging, customer online portals and chat options, talking over the phone or

conversing via email. The latest in collection technologies such as rich media messaging allows for letters to be embedded in texts and interactive 2-way text communication provides easier ways for customers to communicate.

4. Relevant and effective content and messaging – It is essential that letters, emails and texts are tailored to engage customers in the current environment. Drawing on behavioural economics, psychology insights, and reviewing layout and design, can have huge impacts on the success of engagement and collection strategies.

5. Onshore operation – Ideally these campaigns are handled onshore as foreign accents and a lack of fluid English can easily irritate and/ or further disadvantage alreadyfrustrated and vulnerable customers.

6. Relevant Experience – When looking to outsource accounts prior to disconnection some organisations may want to look at a first party campaign rather than a third party calling on behalf of them. But whether first or third party, brand reputation is absolute key for Essential service providers. That’s why it is important to partner with an outsourced provider that has proven capability in delivering similar successful campaigns which can be demonstrated through case studies and testimonials.

7. Relationship Focused – Last but certainly not least underpinning all successful outsourced re-engagement campaigns is the ability of the outsourced provider to develop strong relationships with clients.

Each campaign will need tailoring to specific client requirements and a good relationship will ensure open communication, trust, flexibility, and the best outcomes for all. All in all, the challenges of the past year mean that a renewed approach to outsourced collections is needed for Essential Service providers. Sticking to outdated debt collection processes that rely on consequences and escalation in this environment could cost more money in the long run and take a big toll on brand reputation and the wellbeing of your customers. Conversely, a customer re-engagement campaign puts a positive slant on effective collections. Designed to assist the customer and sell the benefits of engaging and paying off their debt, it will return the best results both in terms of the overall customer experience, and commercially. Is it time to consider your new approach to collections?

*Andrew Smith MICM CCE is Founder and CEO of ARMA, providing customer focused collections. He can be contacted on 0403 228 211 or andrew@armagroup.com.au

REFERENCES: *1 G overnment responses to COVID-19 in the energy sector | energy.gov.au *2 Essential Services Commission Report in September 2020 More customers seeking support in paying water bills, 14 October 2020 | Essential Services Commission *3 AER extends COVID-19 energy customer protections | Australian Energy Regulator

“...a renewed approach to outsourced collections is needed ... Sticking to outdated debt collection processes that rely on consequences and escalation in this environment could cost more money in the long run and take a big toll on brand reputation and the wellbeing of your customers.” April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 41

Consumer Credit

Changing consumer behaviours will impact collections centres in 2021 By Ashley Clayton*

Ashley Clayton

There is no doubt that the COVID19 pandemic hit many consumers hard, with unemployment and reduced household income for some, and encouraging others to use unexpected savings on expenses such as commuting and entertainment to increase payments or pay off debt. Collections contact centres are also seeing an interesting shift in customer behaviours, from their choice of communication channels, to changes in time of day that they contact and want to be contacted. The current economic climate and the continuing impact of the pandemic has put a strain on businesses worldwide to consistently deliver on ever-changing customer expectations. Although customers were initially understanding about delays, many have begun to lose patience with brands that still have not figured out how to efficiently deal with the new reality. This was

especially evident with collection centres that did not have the right technologies in place or were otherwise ill-equipped to quickly pivot to an at-home service model and address spikes in call volumes when the pandemic began. To stay ahead of the curve and be successful going forward, companies must truly understand, and even anticipate, how changing consumer expectations and behaviours will impact collections in 2021 and beyond. Understanding the new types of vulnerable customers and managing their finances in a sensitive manner can be a challenge for collections organisations. Attracting and retaining experienced collections staff is key to excelling in the current environment.

Adapting customer contact strategies for the “new normal” Many businesses regard this inflection point as an opportunity to reconceive their entire customer experience. In

“To stay ahead of the curve and be successful going forward, companies must truly understand, and even anticipate, how changing consumer expectations and behaviours will impact collections in 2021 and beyond.”

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Consumer Credit

“The current economic climate and the continuing impact of the pandemic has put a strain on businesses worldwide to consistently deliver on ever-changing customer expectations.”

fact, according to a recent study by Corinium and Precisely, one in four Customer Experience (“CX”) leaders surveyed have totally reimagined their strategy and another 33% say they have made major changes. The study also cites changes in customer behaviours that should be considered when developing new CX strategies and approaches, including an increase in expectations for more seamless and integrated experiences and a rise in use of self-serve digital and automated tools. There does seem to be a consensus among CX and business leaders as to which enabling customer contact technologies companies should invest in now. Here is a recap of what those surveyed by Corinium had to say: z 50% have invested in IVR

z 47% accelerated migration to the cloud z 37% improved or launched selfservice options z 42% expanded or upgraded chatbot functionality z 44% created new digital alternatives to in-person interactions. How can you determine which customer behaviours should drive changes to your CX strategy? Beef up your customer listening efforts. More frequent surveys are one way. But be cautious about overwhelming your customers. A simple one or two question survey at the end of an interaction can provide a quick read on new preferences, and how a customer would rate a specific experience. Speech analytics can

automatically capture the feedback received on every interaction so that you can quickly define trends across your entire customer population. To address the accelerated customer demand for positive digital experiences, many organisations are also investing in AI-driven infrastructures, expanding their omnichannel capabilities, and automating every process that they can.

customer behaviour trends that are here to stay Consumer decision journeys and buying behaviours have changed over the past year, many of them forever. A majority of businesses, including collection teams, are still figuring out how to pivot to address the changes ➤

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Consumer Credit

that have already occurred, as well as prepare for those to come. What does all this mean for collection centres? Let’s look at the results of a recent industry survey conducted by Noble Systems. It outlines the top five customer behaviour trends for customer contacts that are here to stay.

more customers communicating through both voice and alternative channels: z Chat usage is up 26% z IVR self-service has increased by 29% z Email usage grew by 44% z Voice continues to accelerate with gains of 43%

Customers are more demanding and have higher expectations of agents. The survey indicates that a majority of respondents have noticed changes in customer behaviours over the past year, exhibiting higher expectations and less patience. They are more demanding on agent performance and want more details when it comes to their services. They also want higher quality interactions and faster turnaround. Multi-channel communication is growing According to the survey, almost threequarters of respondents already offer multi-channel communications to their customers. Of those that don’t, more than half are planning to add this capability.

Agents are not being fully utilised for multiple channels Customers continue to demand more personalised and faster, better, 24/7 service on the channel of their choice. Many prefer to find resolutions and answers using AI-enabled chatbots and virtual assistants. Gartner predicts that 70% of customer conversations will involve one or more emerging technologies by 2022. In some cases, contact centres have yet to integrate multiple channels into the customer journey. In others, the technology is there, but agents lack the needed skills to fully utilise it. According to the survey, 62% of respondents are using only the voice channel. Of those that are using multiple channels, 42% use voice and one other channel, primarily email.

Customer usage of multiple communication is accelerating Some collection centres have been slow to adopt and fully integrate channels beyond voice and email into their contact platforms. The pandemic and consumer demands forced the issue, and we are now seeing adoption at an accelerated rate. Survey participants observed

Predictive tools to better understand customer behaviours are not yet widely-used Only 36% of respondents indicate that they are currently using any tools to predict customer behaviours. But the general consensus by experts in the field is that predictive tools are rising to the top of the must-have list for contact centres.

“Some collection centres have been slow to adopt and fully integrate channels beyond voice and email into their contact platforms. The pandemic and consumer demands forced the issue, and we are now seeing adoption at an accelerated rate.” 44 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

What contact centres can do now to address shifting consumer behaviours Unprecedented times in 2020 have led to ongoing changes in consumer behaviour and a scramble by businesses, including collections organisations, to meet the shifting demands. In response, companies must renew their focus on delivering the best possible customer experience every time, and across all touchpoints. Here are the five key actions that contact centres can take now to deliver on the ever-shifting demands of consumers: Offer “anywhere” customer service and engagement Thanks to COVID, companies learned quickly that flexible cloud-based technology that supports on-site, remote and hybrid working models is fundamental to being able to deliver the best possible experience to customers from anywhere at any time. A cloud-based infrastructure allows companies to switch from an on-premise to remote workforce – or vice-versa – with little to no business interruption. It also allows businesses to quickly scale operations up and down. Provide seamless communication across multiple channels An omnichannel platform is key to supporting multiple communication channels to meet consumer expectations. They want to interact with companies anytime and anywhere. They want to use the channels of their choice. And they want the experience to be seamless from one channel to another. This means that every interaction must be an extension of the last. Today’s consumers quickly lose patience when they call in (or text or chat, etc.) to pay a bill or ask a question and companies don’t have the technologies in place to automatically identify them and,

Consumer Credit

in some cases, know why they are calling. Agents must have access to all pertinent customer data in one place from a variety of sources – CRM, external databases, speech analytics and other enterprise systems. Level up agent skills to ensure the best customer experience every time Ensuring a consistent and exceptional customer experience during every interaction is more important than ever. Shifting consumer needs and preferences can make it challenging for collections centres to train and coach agents. To help agents level-up their skills, many teams are turning to gamification for everything from new hire on-boarding and coaching to perpetual training and development.

Support Self-serve – the new “preferred” service Limited self-service options and the typical tiered approach to customer service are no longer hitting the mark. According to a recent article, 67% of customers prefer self-service, and with a continued increase in options and improvement and AI, this number is expected to go up. Let AI deliver on its promise Although Artificial Intelligence (AI) has been around for a while it has really come into its own this past year. It enables speech analytics to provide more and more precise insights on customers and processes. It also powers intelligent IVR, optimised and scalable workforce management, predictive analytics, self-service, and hyper automation. As AI continues

to evolve, it will help deliver more personalised and relevant experiences and re-shape how businesses and consumers communicate.

Conclusion In summary, the collections industry, like most industries, is facing a period of transition. Organisations that can adjust to the changing needs and continue to delight their customers are the ones that will stand the best chance of thriving. Adapting to changes will be the key to fostering brand loyalty, as well as to acquiring new customers and achieving business growth in the future. *Ashley Clayton Business Manager, Noble Systems Australia T: +61 3 9008 1700 E: aclayton@noblesystems.com www.noblesystems.com

“Ensuring a consistent and exceptional customer experience during every interaction is more important than ever. Shifting consumer needs and preferences can make it challenging for collections centres to train and coach agents.”

NCI, more than just trade credit insurance Leverage our information on more than 1 million businesses around Australia, and educate yours.

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 45

Consumer Credit

Changes to mandatory comprehensive credit reporting – are they really beneficial to consumers? By Clare Venema MICM*

Clare Venema MICM

First coming into effect on 1 July 2018, Mandatory Comprehensive Credit Reporting initially, simply required the big four banks to fully participate in credit reporting systems. The information held by credit reporting bodies in essence, allowed licensed credit providers to make more informed lending decisions through the provision of information including default judgments, repayment history information, and payment defaults. This remained as the status quo until recently, when the National Consumer Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019 passed in February of this year.

Two of the most significant changes set to occur under this Bill are in theory, supposed to be beneficial to consumers. Traditionally, under the provisions of the Privacy Act 1988, when a consumer enters into a hardship arrangement with one credit provider, this cannot be disclosed to another credit provider. However, under the proposed amendments, a new category of hardship information is going to be reported alongside repayment history information. According to a media release by the Attorney-General’s Department, the ultimate goal of this change is to provide greater transparency to credit providers, and also allows consumers to demonstrate their

“According to ... the Attorney-General’s Department, the ultimate goal of this change is to provide greater transparency to credit providers, and also allows consumers to demonstrate their credit worthiness...”

46 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Consumer Credit

“...when a consumer enters into a hardship arrangement with one credit provider, this cannot be disclosed to another credit provider. However, under the proposed amendments, a new category of hardship information is going to be reported alongside repayment history information.” credit worthiness by being able to adhere to these arrangements.1 Schedule 2 of the Bill has introduced amendments to the Privacy Act 1988, to permit the reporting of financial hardship information within the credit reporting system.2 Furthermore, under the former credit reporting laws, only licensed credit providers could report repayment history information, which excluded telecommunications and utilities providers. However, some have speculated that following the significant changes that are set to occur from the passing of the Bill, there may be an argument to allow telecommunications and utilities providers to report repayment history information in future, noting that according to the Explanatory Memorandum of the recent legislation, the definition of a credit provider includes any subscriber

who has held an account for more than 7 days.3 Prime Minister Scott Morrison has deemed these proposed amendments as a “game-changer” for both consumers and lenders. However, in practice, it is unknown whether the deck may be stacked in favour of lenders, rather than truly benefitting consumers.

1. A new category of hardship information Traditionally, the reporting of repayment history information would solely include information regarding credit accounts (such as credit cards, home loans and personal loans), and would reflect whether payments have been made on time, within the grace period (being 14 days), or whether any payments were overdue. Furthermore, under the National Credit Act 2005, if a consumer

considers that he or she will be unable to meet their obligations under their credit contract, the consumer may give their credit provider a hardship notice of their inability to meet the obligation and seek relief.4 It follows, that the credit provider may respond to the consumer’s request by not agreeing to provide relief or agreeing to permanently vary the contract. In practice, credit providers who refuse a hardship request may alternatively offer another form of relief such as a moratorium on repayments, waiver, forbearance or indulgence.5 In accordance with Schedule 2 of the passed Bill, new measures have been introduced to recognise an agreement to permanently vary the contract and other forms of agreement, as a financial hardship arrangement.6 Namely, a new rule has been ➤

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 47

Consumer Credit

established for reporting repayment history information in the month that a repayment has been affected by a financial hardship arrangement. The goal of this is to ensure that credit reporting is consistent and interpretable, and consumers in similar financial situations will have correspondingly similar information in their credit reports.7 It follows, that this new category of hardship information will be distinguished either by the fact that a monthly payment has been affected by a permanent variation to the terms of the consumer credit or an arrangement which provides temporary relief from, or deferral of, the individual’s obligations concerning the consumer credit.8 It has been reported that financial hardship information will attract the same protections as repayment history information, which can only be accessed in more limited circumstances than other forms of information about a consumer. Credit reporting bodies will be restricted from incorporating hardship into a consumer’s credit score and will only be able to retain financial hardship information for 12 months.9 In accordance with S. 72 of the National Credit Code, when an individual applies for financial hardship, this activates a protection where their repayment history should not be adversely reported. Accordingly, the inclusion of financial hardship information alongside repayment history information seems to potentially negate this protection. According to Anna Bligh, CEO of the Australian Banking Association, “more information is better for customers as it gives lenders a more comprehensive picture of a customer’s financial situation”.10 However, Karen Cox, CEO of the Financial Rights Legal Centre, has a less positive view on the amendments, stating that “Financial Rights is very concerned that people will shy away

“...when an individual applies for financial hardship, this activates a protection where their repayment history should not be adversely reported. Accordingly, the inclusion of financial hardship information alongside repayment history information seems to potentially negate this protection.” from seeking assistance from their lenders when (they) become aware of these changes”.11 Ms Cox further stated, that “(We have) spoken with countless people who would rather continue to struggle with unsustainable payments or look for dangerous quick-fix solutions such as payday loans or expensive refinancing, rather than risk having what they perceive as negative information listed on their credit reports.”12 It is unknown at this time, whether the mere existence of a hardship arrangement on a consumer’s credit file may negatively skew a lender’s view of the consumer’s ability to make repayments, irrespective of whether they have been able to adhere to the arrangement. As it stands, the allowance of financial hardship reporting alongside repayment history information seems in great effect, to benefit lenders to make a proper assessment of a consumer’s financial suitability for a credit product.

2. A potential Pandora’s Box In accordance with the former credit reporting laws, telecommunications and utilities providers were restricted to reporting payments defaults only. These would typically be reported when a debt has been incurred contrary to the terms of a credit contract. In accordance with ss 6Q and 21D of the Privacy Act 1988, a credit provider must give an individual 2 separate notices to

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advise of an impending default listing. Furthermore, the credit account must have been over 60 days in arrears, and the credit provider is required to have taken steps to recover the outstanding account before issuing the notices. In light of the Submissions to the Productivity Commission’s Inquiry on Data Availability and Use by the Australian Retail Credit Association in 2016, some have argued that following the significant changes regarding financial hardship that are set to occur, there is now room to consider other possibilities for changes to credit reporting. Namely, a potential for telecommunications and utilities providers to report repayment history information is open for re-consideration, particularly in light of the definition of a credit provider that has been provided in the Explanatory Memorandum. However, allowing these additional providers to report repayment history information may potentially create a Pandora’s Box scenario, as all consumers, not just those who are utilising credit products, may attract negative repayment history information, particularly in light of the financial struggles that many face from COVID-19.

And the winner is… According to the explanatory memorandum of the Bill, Australia’s credit reporting system is characterised by an information asymmetry, whereby a consumer has

Consumer Credit

more information about his or her credit risk than the credit provider, which can result in mis-pricing and mis-allocation of credit. It follows, that the Bill seeks to correct this information asymmetry, letting credit providers obtain a comprehensive view of a consumer’s financial situation, enabling a provider to better meet its responsible lending obligations.13 Furthermore, the Bill promises that consumers who possess a poor credit rating will also be able demonstrate their credit worthiness through future consistency and reliability. However, it should be noted that over 900,000 Australians took hardship deferrals throughout the COVID-19 crisis. As stated by Ms Cox, “their ability to get credit in the future could be severely affected, making recovery from a disaster even more difficult.”14

*Clare Venema MICM E: vene0010@outlook.com T: 0435 636 969

FOOTNOTES: 1 Mortgage Business, Mandatory Comprehensive Credit Reporting law passes, Annie Kane, 5 Feb 2021, https:// www.mortgagebusiness.com.au/breakingnews/15358-mandatory-comprehensivecredit-reporting-law-passes 2 Explanatory Memorandum, NATIONAL CONSUMER CREDIT PROTECTION AMENDMENT (MANDATORY CREDIT REPORTING AND OTHER MEASURES) BILL 2019 3 Ibid 4 Ibid 5 Ibid 6 Ibid 7 Ibid 8 Ibid 9 Ibid 10 Australian Broker, Updated credit reporting laws to help or harm consumers?, Madison Utley, 8 Feb 2021, https://www.brokernews.com.au/news/ breaking-news/updated-credit-reportinglaws-to-help-or-harm-consumers-275348. aspx 11 Ibid

12 Ibid 13 Explanatory Memorandum, NATIONAL CONSUMER CREDIT PROTECTION AMENDMENT (MANDATORY CREDIT REPORTING AND OTHER MEASURES) BILL 2019 14 Australian Broker, Updated credit reporting laws to help or harm consumers?, Madison Utley, 8 Feb 2021, https://www.brokernews. com.au/news/breaking-news/updatedcredit-reporting-laws-to-help-or-harmconsumers-275348.aspx REFERENCES: Mortgage Business, Mandatory Comprehensive Credit Reporting law passes, Annie Kane, 5 Feb 2021, https:// www.mortgagebusiness.com.au/breakingnews/15358-mandatory-comprehensivecredit-reporting-law-passes Explanatory Memorandum, NATIONAL CONSUMER CREDIT PROTECTION AMENDMENT (MANDATORY CREDIT REPORTING AND OTHER MEASURES) BILL 2019 Australian Broker, Updated credit reporting laws to help or harm consumers?, Madison Utley, 8 Feb 2021, https://www.brokernews.com.au/ news/breaking-news/updated-credit-reportinglaws-to-help-or-harm-consumers-275348.aspx

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April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 49

Credit Management

The real value in knowing your customer By Donna Smith MICM CCE*

Donna Smith MICM CCE

In debt recovery, we are dealing with bad debtors who have already been through your collections gambit. It can safely be assumed that either they have no intention of paying or they don’t have the capacity to pay. Lack of capacity is one thing, but debtors who have no intention of paying often start their business relationship with you with that in mind, which is why best practice Know Your Customer (“KYC”) routine is essential. Often, in my business, we find that some of our clients exercise limited KYC practices, because they don’t fully understand legal entities and the implications when it comes to the pointy end, i.e. legal action. The credit industry, as a whole, seems to be fixated on Australian Business Numbers (“ABNs”), when ABNs are not truly business identifiers (from a legal standpoint); they are in fact tax identifiers. ABNs came into play 1 July 2000, when the Australian Government introduced them, so that the Australian Tax Office (“ATO”) could easily identify businesses collecting and paying Goods and Services Tax (“GST”). Not to say that ABNs can’t be business identifiers, but they don’t help us when dealing with trusts. Trusts are not legal entities and cannot be sued in a court of law. So, if you haven’t applied good KYC routine and you don’t know who the beneficiary of the trust is, you can be dead in the water.

50 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

I will give you an example of the type of situation that can arise when poor KYC routine is applied. The names have been changed, for this example, to preserve privacy, but the underlying principals are the same. Let us say that the customer of my client was a café, the café was called “The Blue Wren” and the owner’s name was Sally Smith. Before supplying, my client performed an ABN search and obtained some general contact information, but they did not do enough in the way of KYC routine. For the purpose of this example let us say the ABN is 35 806 539 419 (not the real ABN, this ABN belongs to “THE A B & C SERVICE TRUST”). The ABN of my client’s debtor was similarly a Trust (see image). My client did not do any checks, other than the ABN, because they had no understanding of legal entities, ABN’s, trusts and how they work. He noted the name of the owner and the ABN, and he checked that the ABN was valid, but failed to observe that it belonged to a trust. My client thought it was safe to do the work, because it was a café; the building was there, he knew exactly where The Blue Wren was. He thought it was safe to proceed with the work; he thought there was no risk. So, he proceeded to manufacture and install a specialty food storage and display case. Sally Smith said hers had broken down and she needed to replace it. Our client

Credit Management

of the trust are specified there. You should keep a copy of the Trust Deed with their account or credit application. Let us look at another Trust example:

The Trustee for the Smith Family Trust

took a 25% deposit; he thought this was a good qualifier, meaning that the customer was genuine. However, when it came to final payment, the remaining 75% (the bulk of the account) my client could not get hold of Sally Smith. He drove past the café intending to drop in and see Sally, only to find the shop closed with a “For Sale” sign and a “Sold” sticker on the front window. My client got played. Sally Smith sold the business right along with the brand new display case, clearly orchestrating a way to get a cheap new display case, perhaps to get a better price for her business. She got exactly what she wanted and she got away with it. Because, when it came to collecting, the ABN belonged to a Trust, Sally’s mobile was disconnected, my client didn’t get any other contact information, and with a name like Sally Smith and no home address, there was no chance of being able to locate her. And what use was the ABN? Absolutely no use at all. When dealing with a trust, you need to be aware, that if you don’t find out who the Trustee of the trust is, before you start the business relationship, the only people who will know who the Trustee is, are the debtor, the debtor’s accountant and the Tax Office. Good luck on trying to get that information after the business relationship has soured.

So, what do you do if your customer supplies an ABN that belongs to a trust? Basic KYC routine, when setting up any credit account, is asking your customer “what entity owns the ABN?” i.e. is it a person, group of people or a company? The Oxford English Dictionary defines a Legal Entity as “An individual, company, or organisation that has legal rights and obligations”. For us in credit, a legal entity is the company, organisation or person(s) you have an agreement with, to supply goods and/or services. Getting this information right is vital for the purpose of credit checking, and it becomes even more important in the unfortunate event of your customer defaulting on your credit terms, and you have to resort to debt collection and/or legal action. It is important at this time for you to note that both people (individuals and partnerships) and corporations can be trustees of trusts. A Trust should never be set up solely as your customer name. This is because a Trust has no legal standing, i.e. you cannot take legal action against a trust. Your customer must be an individual as trustee for (“ATF”) the trust, or a partnership ATF the trust or a company ATF the trust. You get this information from your customer, by asking them, before you supply, for a copy of the Trust Deed, the trustees

Who is your customer? Is it… 1. Bill Smith as trustee for the Smith Family Trust; or 2. Bill and Mary Smith as trustee for the Smith Family Trust; or 3. BK & MA Smith Pty Ltd as trustee for the Smith Family Trust? If you are going just on the ABN and haven’t asked for a copy of the Trust Deed, if the customer defaults, how are you going to determine who to pursue? I encounter this problem quite often in my debt collection business, even with companies with wellestablished credit departments, and I am often amazed at the confusion over ABNs and dealing with trusts. Detailed customer information is a powerful tool when it comes to the debt collection process, and it is far easier to get detailed, quality information, before you supply, because the customer wants something from you. Checking the validity of that data is the next vital step in the KYC process, because the data is only useful if it is accurate. If you haven’t reviewed your business’s KYC routines and credit application process in a while, it might be a good time for a review. *Donna Smith MICM CCE Managing Director Reliance Recoveries T: (03) 8517 0444 F: (03) 8625 0044 E: admin@relrec.com.au

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 51

Credit Management

The impact of covid on credit and debt collection and tactics for the future By Roger Mendelson*

Roger Mendelson

How did covid-19 impact on credit and collections? I will approach this looking at the situation from Victoria because it suffered the most severe COVID-19 economic restrictions. However, the underlying principles apply to all states. Every credit manager will have had painful experience of the impact of the pandemic. In essence, businesses changed their tack with their debtors and adopted easy-as-you-go processes. The aim was to avoid any adverse publicity or upsetting customers. For debt collection agencies and debt buyers, the instructions from clients and vendors was to go easy. In many cases, the instructions were to cease recovery activity for a significant period. From the point of view of debt collection agencies, less business was being done, less invoices were being issued, thus there was less overdue debt. The reactions of the Commonwealth Government were to effectively bring company liquidation and bankruptcy activity to a halt. In relation to bankruptcy, the threshold for issuing a Bankruptcy Notice was increased to $20,000 and the

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response period after service of the Notice was increased from 21 days to 6 months. For company debtors, the threshold for Statutory Demands was lifted from $2,000 to $20,000 and the response time was changed from 21 days to 6 months. Thus, the two most serious tools available in the debt collection armory were put to sleep until December 31, 2020. The ATO and other government agencies effectively ceased debt collection activity at the serious end and as at the date of writing of this article, had not recommenced. The Commonwealth Government introduced what has become known as the Debtor in Possession model. This was well intentioned, and the aim was to avoid companies with debts of less than $1million dollars from being wound up and to encourage a restructure. However, the legislation was quite deficient and the impact will be negligible. There is very little evidence of any restructuring taking place under this model. There was no restriction on legal actions but generally a hold was placed on legal actions by most creditors.

Credit Management

“With JobKeeper and JobSeeker coming to an end on 31st March means that there is an economic cliff being approached, which has been well discussed in the media.” The March 31 cliff The combined effect of bankruptcy and statutory demand rules reverting has meant that it is now possible to carry out these two processes. However, it takes time to wind up to them and there is very little creditor liquidation activity going on at present. With JobKeeper and JobSeeker coming to an end on 31st March means that there is an economic cliff being approached, which has been well discussed in the media. As normal wind-up activity ceased for effectively 8 months, many insolvent companies which would have otherwise been wound up are continuing to trade and this has led to the term “zombie companies” (ie companies which are walking dead). A positive trend which emerged during COVID-19 was that creditors adopted a much softer approach to collections. For Credit Managers, this has invariably proven to be a positive experience. For debt collection agencies and debt buyers, it has been a requirement of clients and vendors and has been shown to be positive. My expectation is that this trend will continue and that offering

instalments will be a much more integral part of the debt collection process.

2021 and onwards There comes a time when there is a need to ramp up pressure. The fact is that most consumers have retained their jobs, many who were on JobSeeker received higher amounts than they would have under the old system and interest rates are low, house prices have been increasing across Australia, credit card debt has declined, and households are more cashed up now than they have been for some years. There will certainly be greater contact required between the creditor and the customer, than pre-COVID-19. A key issue for Credit Managers is to take active steps to avoid granting credit to zombie companies. Apart from the usual searches, the most effective step to take is to not grant credit without obtaining directors guarantees. Legal action is now ramping up again and the reality is that hard core debtors will have learnt from the past 12 months that it is possible to avoid paying debts by using certain evasive tactics. In such situations,

if the customer is confirmed to be in employment, is evasive and not prepared to enter into a sensible instalment arrangement, thought needs to be given to issuing legal proceedings. In particular, states where garnishee is an effective enforcement tool, such as New South Wales, Tasmania and Victoria, this may be the only way to get debts paid which would otherwise need to be written off. When setting up instalments, care needs to be taken to ensure that the arrangement is properly documented, there are adequate default provisions and in certain cases, particularly where the debt relates to ownership of a house, thought should be given to inserting a right to lodge a caveat in the event of there being default. In the post-COVID-19 world, Credit Managers will need to be less bureaucratic and more finely-tuned to the situation of creditors than before.

*Roger Mendelson CEO of Prushka Fast Debt Recovery Pty Ltd; and Principal of Mendelsons National Debt Collection Lawyers Pty Ltd T: 1800 641 617 www.prushka.com.au

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 53

Credit Management

Payment Times Reporting Act 2020: Increasing the transparency of payment patterns By Eddie Bastiani MICM*

Payment Times Reporting Act 2020 (Cth) (Act) On 1 January 2021, the Payment Times Reporting Act 2020 (Cth) (Act) came into effect introducing a new Payment Times Reporting Scheme. The Act requires large businesses and large government enterprises with an annual total income greater than $100m to lodge on a publicly available register (known as the Payment Times Reports Register) their payment terms and practices in respect of small businesses which supply to them. The report, which must be submitted bi-annually, must include various pieces of information, including standard payment periods in relation to the shortest and longest standard payment periods, and the proportion of small business invoices that were paid during various time frames. If the Regulator is satisfied that a large business has failed to comply with the Act, the Regulator

Eddie Bastiani MICM

may publish the identity of the large business, or details of its noncompliance on the register (as well as issue the large business with a civil penalty).

What is the purpose of the Act? The purpose of the Act is to enhance payment outcomes for small businesses by promoting transparency around large business payment practices.1 By making such data available to the public, the Federal Government anticipates that small businesses will be better positioned to make informed decisions about their prospective customers, and that more transparency on payment practices and performance will cause a cultural change to enhance payment times2. Moreover, it may be expected that the data available on the Register will inform the public as to payment practices by large businesses which may ultimately help consumers decide which large businesses to buy from.3

“The Act requires large businesses and large government enterprises with an annual total income greater than $100m to lodge on a publicly available register ... their payment terms and practices in respect of small businesses which supply to them.”

54 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Credit Management

of your invoices. This may improve payment times that are experienced with these reporting entities.

Australian GDP 2018-19

What this means for you if you are a credit professional in a large business?

33% 45% 22%

 Small Business

 Medium Business

 Large Business

If you are part of a large business, you should firstly ascertain whether your business is a ‘reporting entity’ for the purposes of the Act and if so, ensure that processes are being put in to place to ensure compliance with the Act. This will include making sure that your business can extract and disclose the relevant data by the required deadlines. You may also access the SBI to ascertain the small businesses which you need to report on.

Conclusion In December 2020, the Small Business Counts statistical report (Report) was issued by the Australian Small Business and Family Enterprise Ombudsman. This Report highlights a variety of interesting statistics, including: z Small businesses contributed nearly $418b towards Australia GDP in 2018-19 which equates to approximately a third of Australia’s total economy z Small businesses employ over 4.7 million people in Australia (41% of the Australian workforce) thereby making small businesses Australia’s largest employer. Interestingly, the Report also states that small businesses in Australia experience a smaller survival rate in comparison to medium and large businesses. This is no surprise given that various studies and surveys have indicated that longer payment times expose small businesses to a greater risk of insolvency.4 This is an issue that has long plagued the Australian economy, with a ripple effect being felt by entities that deal with small businesses that experience such issues, especially during difficult

times, as many small businesses have faced in 2020. Furthermore, long payment times are known to place stress on the cashflow of small businesses as they are required to fund the time between making payment for the costs of producing the goods and services they supply and being paid for this work,5 and further restrict them in hiring more employees, investing, and otherwise growing.6 Arguably, a greater level of support to small businesses could help drive the Australian economy in the right direction, potentially reduce unemployment rates and ensure that small businesses continue to thrive.

What this means for you if you are a credit professional in a small business? If you are part of a business that carries on an enterprise in Australia and has an annual turnover of less than $10m, consideration should be given to registering the business as a ‘small business’ using the online Small Business Identification Tool (SBI). This will have the effect of notifying large businesses that they will need to report on the payment timeframes

As the first payment report is not due to be lodged until 30 September this year, it remains to be seen whether publishing details of the reporting entities that have poor payment practices, will sufficiently incentivise them to improve their practices.

*Eddie Bastiani MICM Senior Associate Oakbridge Lawyers Pty Ltd Direct: (08) 7078 1839 M: 0452 114 551

FOOTNOTES: 1 Explanatory Memorandum – Payment Times Reporting Bill 2020 & Payment Times Reporting (Consequential Amendments) Bill 2020. 2 Explanatory Memorandum – Payment Times Reporting Bill 2020 & Payment Times Reporting (Consequential Amendments) Bill 2020. 3 https://www.industry.gov.au/regulationsand-standards/payment-times-reportingscheme 4 Payment Times Reporting Scheme – Regulatory Impact Statement (OBPR ID: 24466), 4 May 2020. 5 Payment Times Reporting Scheme – Regulatory Impact Statement (OBPR ID: 24466), 4 May 2020. 6 Explanatory Memorandum – Payment Times Reporting Bill 2020 & Payment Times Reporting (Consequential Amendments) Bill 2020.

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 55

Credit Management

ASIC raises the stakes on complaints handling By Ross Paull*

When I first read ASIC’s new Regulatory Guidance (RG 271) on how Australian Financial Services (AFS) firms must prepare to run their Internal Dispute Resolution (IDR) processes, a 1980’s cult horror classic sprung to mind and my first thought was that this could be “A Nightmare On Compliance Street”. The metaphor is do not fall asleep or things could get messy. In this case, the “blades” will be the enforceable paragraphs that freely pepper this RG, along with a raft of more stringent standards. Best practice has been dialled up quite a few notches. Issued on 31 July 2020, RG comes into effect on 5 October this year. The decent transition period hints at what lies ahead. “Firms will need to undertake internal capacity building…” (.25)

Small firms will have to comply without the resources of the big guys. As I write this, it’s almost April, so the day when the force of law and possible civil penalties comes into effect, looms large. In drawing it up, ASIC has done the poker equivalent of raising the stakes. The pressure is now on the other players – AFS Firms1- to respond. Let’s begin with what’s happened to the definition of complaint. It’s now an “expression of dissatisfaction”. Pretty broad, right? It then goes on to say that a response could be implicitly expected.2 In other words, the complaint doesn’t have to be in writing to trigger a firm’s obligation to deal with a matter according to the new requirements. Firms must take a proactive approach to identifying complaints.

Key Highlights  Enforceable Regulatory Guidance (RG). ASIC has given a new RG the force of law.  Tighter compliance obligations. The new guidance significantly tightens standards for how AFS firms and Fintech companies must run their IDR processes.  A customer-centric approach. It requires a more proactive and enabling approach to dealing with complaints.  Civil penalty consequences. Failure to comply with the enforceable standards could result in civil penalties. Ross Paull

56 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Credit Management

“Leading complaints management practices can help improve customer service, strengthen underlying compliance controls and avoid the growing potential for regulatory fines or damage to an institution’s reputation” – DELOITTE CRS This enabling piece bears out in the new standard, quote: “Firms should encourage complaints and make it easy for people to voice their concerns by developing an IDR system that is readily accessible and easy to use” (.131) Then there’s the requirement for the process to be unbiased: “Financial firms should manage complaints objectively and without actual or perceived bias” (.167) Oh, and the process must be free of charge to the complainant even though it’s open season.3 Hmmm, I was unhappy with the slow response from the teller who served me the other day and I left the branch frowning. This will almost guarantee an increase in the number of complaints and the concomitant resources to manage. ASIC guessed this might be the case and they’ve addressed this with more enforceable paragraphs: “The IDR process must be resourced so that it operates fairly, effectively and efficiently” (.142)

“…includes resourcing the IDR function to deal with intermittent spikes in complaint volumes” (.143)

ASIC’s ‘3 Rs’: Resourcing, Recording and Reporting ASIC anticipates more complaints, but AFS Firms must carry the can. Not only that, but the onus is also on them to track the melee with an enforceable requirement to record: “Firms must have an effective system for recording information about complaints. The system must enable firms to keep track of the progress of each complaint” (.179)

about complaints data regularly to senior management and the firm’s board (or equivalent)” (.183) How do you enable complaints and, with an abundance of caution, proactively read a customer’s mind that a response may be implicitly required in a very timely way? “Timeliness is central to effective complaint management and is a key performance measure of a firm’s IDR process” (.49) “…must provide an IDR response to a complainant no later than 30 calendar days after receiving the complaint” (.56)

Harnessing Technology It seems to be about trying to strike a balance between ASIC’s desire for a more consumer-centric approach and a firm’s capacity to deal with what may seem to be minor grievances – at the source. ASIC has also elevated responsibility for a firm’s adherence and oversight to the highest levels, the CEO (or equivalent) and Board (.128 and .143). As well as recording, there’s the reporting: “Firms must provide reports

What if a firm could simply refer their customers to a portal, an automated “clearinghouse”, so they could conveniently engage under their own steam, and firms could efficiently handle any volume via a single location? Note that complaints and disputes are used interchangeably throughout RG 271, yet complaints are different because of the inequality between parties. A complaints officer handling many cases is not as emotionally invested in resolution as the

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 57

Credit Management

customer. This requires careful design considerations. Now comes the good news. Outsourcing to external providers is permitted, especially if it ensures accessibility (.47), and leveraging the power of technology and data analytics is a best practice standard (.17(g)). To this end, Guided Resolution has purpose-built a tech platform, ‘Guided Compliance’ www.guidedcompliance.com.au/AFSL to help prevent unforced errors in complaints handling so there is no need to be afraid of RG 271. We can take the pain out of compliance by providing the immediate internal capacity to handle complaints using ADR4 best practices. As well as avoiding regulatory fines, there are many sound reasons to comply.

Being Compliant The compliance function is not just about topics like anti-money laundering and internal policing. It’s much more than that. Compliance is a firm’s ticket to play and stay in the game. In the absence of compliance, firms invite reputational damage.

“Changing the way an institution manages customer complaints requires real action. A considerable first step is realizing that satisfying customers and satisfying regulators are not two mutually exclusive propositions.” – DELOITTE 5

Customers are unlikely to work with you if you lack trust in the marketplace. But if you are trusted, customers will give you the benefit of the doubt. Tighter regulation is also an opportunity to test new ways of thinking and create adequate set-ups. Studying win-win negotiation principles was for me transformational because it brought to light all the rookie errors that I’d made in the past. I suspect that RG 271 will bring on similar “ah-ha” moments as AFS firms prepare for it: z Mindset. We are shifting the perspective away from viewing complaints as being negative. We instead consider it as ‘feedback’ (a good thing, right?) as well as an opportunity to garner data to identify trends and potentially drive positive change. z Early. The earlier the intake and the quality of the intake capabilities, the better. To get in before things become entrenched and to detect and mitigate the legal (i.e., regulatory action) and reputation risks. z Response. Moving from the typical ad-hoc response patterns to a more proactive complaints management approach will help fuel a core part of the Customer Experience (CX). z Value. Recognise the ‘goldmine’ that complaints data can represent by appreciating its value, assigning a business value to it, and developing a robust body of complaint data. Compliance is so much more than obeying the rules. It’s a currency of exchange between a firm and its customers. Trust reserves are built over time and can grow if there’s a positive feedback loop: z Repeated interactions; z Honest and fair communications; and z Follow-through on commitments.

58 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

The last two steps require the adoption of reliable rules around the communication exchange. ASIC has simply up-scaled its expectations on what this looks like concerning complaints. It requires high-quality intake capabilities and accessible CX that meets the needs of today’s digital culture: z Self-guided z Self-paced z Available 24/7 z Easy to use z Unassuming Guided Compliance embeds all the bells and whistles with no lock-in contracts. Firms can comply with RG 271 at a fraction of the cost of ramping up with physical infrastructure. And other businesses can use the platform to follow industry best practices. We’d love to be your technology partner to help navigate the new compliance obligations and we’re happy to give you a few months to test out the platform and see how it fits your needs, ‘on the house’.

*Ross Paull CEO, Guided Resolution E: ross@guidedresolution.com T: +61 2 8051 3228 www.guided-compliance.com.au/AFSL

FOOTNOTES: 1 These include all AFSL holders with retail customers, unlicensed issuers of financial product (retail), all credit providers, lessors and their service providers (brokers) and all FinTech companies. 2 RG 271.27 – expression of dissatisfaction in relation to products, services, staff, or the handling of a complaint. 3 RG 271.141 4 Alternative Dispute Resolution 5 ‘The power of complaints – Unlocking the value of customer dissatisfaction’ Deloitte Center for Regulatory Strategies (2015)

Member anniversaries Bruce

Gatgens

MICM

NSW

50 years

Gregory

Brookes

LICM

QLD

Retired

50 years

Paul

Cooney

LICM

VIC

CollectAu Pty Ltd

45 years

Eric

Milne

LICM CCE

NSW

Master Builders Association of NSW

40 years

Faye

Whiffin

FICM

QLD

Sabukat Pty Ltd

40 years

Paul

Williams

MICM

NSW

Coregas Pty Ltd

35 years

Adrian

Stewart

MICM CCE

Australian Clutch Services Pty Ltd

35 years

Paul

Westo

MICM

Toro Australia Pty Ltd

35 years

Ismail

Gani

MICM

NSW

Consult Corp Pty Ltd

30 years

Michael

Hardy

MICM

QLD

Sally

Speet

MICM

NSW

MM Electrical

25 years

Trevor

Goodwin

LICM CCE

National Credit Insurance (Brokers) Pty Ltd

25 years

Colman

Moloney

MICM

VIC

Davies Moloney

25 years

David

English

MICM

Bunnings Group Limited

25 years

Jeremy

Oliphant

MICM

Pioneer Water Tanks Pty Ltd

25 years

Lynette

Harris

MICM

NSW

Interface Aust Pty Ltd

20 years

Decia

Guttormsen

MICM CCE

QLD

University of Queensland

20 years

Fiona

Pendergast

MICM

QLD

Bulk Fuel Australia Pty Ltd

20 years

Leigh

Jackson

MICM

QLD

Gold Coast City Council

20 years

Christine

Wilson

MICM CCE

VIC

Reece Pty Ltd

20 years

Belinda

Killian

MICM CCE

NSW

Maxi-Tankers Pty Ltd

15 years

Mark

Streeter

MICM

NSW

StreeterLaw

15 years

Shiraz

Irani

MICM

NSW

Hyundai Motor Company Australia

15 years

Dale

Hannan

MICM CCE

QLD

National Collection Services

15 years

Sarah

Columbus

MICM

Southcott Pty Ltd

15 years

Sam

Elamirdache MICM

VIC

Nutrien Ag Solutions Limited

15 years

Sandra

Ippolito

MICM

VIC

Barro Group Pty Ltd

15 years

Vaughan

Dixon

MICM

VIC

Comprehensive Credit Decisions

15 years

Cindy

Williams

MICM

NSW

Hume Plasterboard Pty Ltd

10 years

Cynthia

Thomas

MICM

NSW

Auscare Collect Pty Ltd

10 years

Henry

Espinel

MICM

NSW

DB Schenker

10 years

Kate

Sewell

MICM

NSW

Volcom Australia Pty Ltd

10 years

Rachel

Burford

MICM

NSW

Electrolux Home Products Pty Ltd

10 years

Rebekah

Forshaw

MICM

NSW

MTU Detroit Diesel Australia Pty Ltd

10 years

Nicole

Storm

MICM

QLD

Integria Healthcare

10 years

Deborah

Ryan

MICM

VIC

Oji Australia

10 years

Ann

Dixon

MICM

Klinger Limited

10 years

Michael

Hope

MICM

Overseas

Fletcher Building

5 years

Anita

Dominello

MICM

NSW

LG Electronics Australia Pty Ltd

5 years

Christopher

Broad

MICM

NSW

TPG Telecom

5 years

Ruth

Thomason

MICM

NSW

TPG Telecom

5 years

Steven

Lamb

MICM

NSW

Brickworks Limited

5 years

Daniel

Mackintosh

MICM

National Credit Insurance (Brokers) Pty Ltd

5 years

Kirsty

Wright

MICM

Credit Solutions Pty Ltd

5 years

Yee Kwan

Chau

MICM

National Credit Insurance (Brokers) Pty Ltd

5 years

Jeanine

Purdie

MICM

VIC

Business Credit Solutions Pty Ltd

5 years

Lawrance

Chen

MICM

VIC

Cummins South Pacific Pty Ltd

5 years

Margaret

Herold

MICM

VIC

Cummins South Pacific Pty Ltd

5 years

Margeaux

Prinsloo

MICM

VIC

Cummins South Pacific Pty Ltd

5 years

Maxine

Vallance

MICM

VIC

Ambulance Victoria

5 years

30 years

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 59

DIVISION REPORT

We recognise those members who achieved membership anniversaries between January and March 2021. Congratulations to these members on achieving such important milestones.

DIVISION REPORT

Queensland

The winning Barefoot Bowls team: Liam Barnes, Jess Blakemore, Maddison Graham and Samuel Gill.

We had a cracking good time at the Barefoot Bowls as evidenced by the Optimum Recoveries team.

Allyce McAnally (Randstad), Alida Chan (Oakbridge Lawyers), Nathan McQuade (NCI), Zandalee May McKenzie (Oakbridge Lawyers) and Maria Schandl (Stoddart Group).

Fantastic turnout for Barefoot Bowls @ the Boo.

Presidents Report

was our barefoot bowls and soon after the insolvency seminar. All three were well attended and feedback was positive. If you have not managed to make it to any of the networking events, I highly encourage you to do so, and if you have any suggestions for the type of events you would like to see, please reach out to any of our councilors – details on the AICM website, or via the Qld council Facebook or LinkedIn groups. I would also like to welcome Melissa Jarvin to the Queensland council. Melissa joins us from Results Legal and has a genuine enthusiasm to connect with members and be an ambassador for the AICM. I also would like to acknowledge the entire council who stepped up to help plan and make themselves available for 3 events in 2 months! Great job team and I look forward to the upcoming events (see calendar on website). Again, if anyone is interested in taking part in any of the events we host, please don’t hesitate to reach out. We can always use an extra pair of hands or a different perspective. Last of all, I wanted to thank our state sponsors – Results and Vincent’s. They invest a lot into being an

Hello fellow Queensland members! I was quite surprised when my reminder for the next report popped up, I was wondering where did the time go? The last report was just prior to the holidays and all up, things were looking up. Since then, we have seen reporting season come and go, jobless figures, etc. all validating the sentiment and painting a positive picture overall. While some sectors continue to struggle, as a whole its fairly positive, all we can hope for is a continuation of the good news. I would like to blame an increase in activity to the shortage of time, but I need to remind myself it’s all about working smarter and not harder. I hope it continues as the world scrambles to get back to where we were at the end of 2019. As far as an update on AICM business, we have had 3 very successful networking events and it is honestly good to see you all and catch up. Many of you I had not seen in over a year! Its been good catching up and sharing all we have learned in the last 12 months. The events we had started with an economic breakfast where we had a presentation from Justine Green from NAB, next 60 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Queensland

Carly Rae-Orth (Fisher & Paykel) with Scott Gasson (Heritage Bank).

Nick Pilavidis (AICM), Steven Staatz (Vincents) and Gavin Dudley (Scotpac).

Dale Hannan and Melissa Einam (National Collection Services).

active part of what happens in QLD on a day to day basis. Our National sponsors also have been a big help with sourcing speakers and supporting our events, we really appreciate the assistance. Thanks to Equifax, TurksLegal, illion, and Jirsch Sutherland. Its all your help that makes this what it is and I look forward to working more with you all in the future. To cap things off, keep an eye out for upcoming events, if you haven’t, please have a read of the year in review report that was sent out last month, it really does a good job of giving an overview of all we have been up to and where the board and organisation are going. Take care everyone and look forward to seeing you all in a face to face setting of some sort.

With over 37 members in attendance it was a great event. It was a great opportunity to kick back, relax and catch up with friends and colleagues after such a long time away from the networking scene. Shoot your shot came out on top winning 1st place (Maddison Graham, Samuel Gill, Jess Blakemore and Liam Barnes) with Where’s the pins coming in at a close second (Paul Chen, Paul Van Barneveld, Stacey Woodward, Ravina Krishna and Alan Blair) Some creative team name mentions include ‘Illegal Phoenixes’, ‘Bowl me the money’ and ‘No boo hoo’. We can’t wait to see everyone again at our next social event in May.

– Roger Masamvu MICM CCE Queensland Division President

Insolvency seminar Friday 19th March 2021

Bowls event On Friday 12th March we had our first networking night of the year, Burgers & Bowls at The Boo in Newstead.

The event kicked off with individual tables being asked to collaborate with their group to discuss what they had experienced and what they predicted. This really brought the group together and set the scene for the day. It was April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 61

DIVISION REPORT

Michelle Jackson (Fletcher Building), Judith Hishon, Cattleya Mills and Louise Nixon (all from TurksLegal).

DIVISION REPORT

Queensland

Insolvency Seminar panellists: Judith Hishon (TurksLegal), Matthew Joiner (Cor Cordis), Jo Fitch (Tradelink) and Ian Dorey (K&L Gates).

reaffirmed and got an opportunity to speak to other professionals from credit controllers through to lawyers and insolvency practitioners. It was without doubt a success and the feedback was positive. – Michelle Kirkby MICM

The Australian Institute of Credit Management welcomes our Partners for 2021 DHL at the Insolvency Seminar: Yvonne Silanesu, Sarah Batzloff, Jon Lillis and Forrest Johnson.

National Partners

Trusted Insights. Responsible Decisions.

Divisional Partners

Chris Baskerville (Jirsch Sutherland), Matthew Joiner (Cor Cordis) and Wayne Clark (BCIB). Official Division Supporting Sponsors

also an opportunity for members to share what they wanted from the day. The top request was to hear from a variety of experts to gain their insights. They were not disappointed. The afternoon was filled with individual’s talking about their area of expertise and group panel discussions on numerous insights and experience. An absolute stellar line up of industry experts who shared their knowledge in a meaningful way. Many people walked away learning something new, had their thoughts 62 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

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.

Western Australia/Northern Territory

Simon Backhouse (Zipform Group), Rob Webster (AMPAC) and Cheri Bowater (Summit Rural).

WA Division Director Rowan McClarty chairs one of the insolvency panels.

Presidents Report It has been a relatively quiet few months in the West, with no member events being held thus far to speak of, however the WA Divisional Council has been hard at work planning for the remainder of the year and we are eagerly looking forward to holding our first live member event in April with the always engaging and informative National Insolvency Seminar on the 22 April. This will closely be followed by our annual WA Economic Update Breakfast in May, where we will be able to introduce Aiden Depiazzi, Senior Economist at Deloitte Access Economics as our key note speaker. The hugely popular Women In Credit luncheon will follow in June, again held at the Doubletree in Northbridge and then the Young Credit Professional (YCP) of the Year awards, our Premier event to be held at Crown Perth on

Ann Dixon receives her 10 year anniversary pin from AICM CEO Nick Pilavidis.

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 63

DIVISION REPORT

Insolvency Seminar panellists: Matthew Donnelly (Deloitte), Carmen Boothman (HWL Ebsworth Lawyers) and Martin Bigg (Capricorn Society).

DIVISION REPORT

Western Australia/Northern Territory

Second panel session: Michelle Shackles (BRI Ferrier), Raffaele Di Renzo (Nova Legal), Nick Pilavidis (AICM) with Chair of session Greg Prout (WA Insolvency Solutions).

Greg Prout (WA Insolvency Solutions), Shaun Boyle, Michelle Shackles (both BRI Ferrier) and Adrian Saggers (ASIC).

Rikki Schulze, Prinolla Moodley (both Bunnings), Nimisha Lad (Westrac), Brenda Woodger (Credit Solutions) and Ann Dixon (Klinger).

Friday 16 July 2021. And just on the YCP Awards, I urge all our WA members to look to their teams and networks and encourage our up and coming young credit talent to nominate for this years award. The process itself is a hugely enriching and rewarding experience, and involvement will widen their networks 64 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

and give them visibility and status on both a State and National stage, and can open up a plethora of opportunity in terms of career advancement. So please get on board and support the AICM and its Young Credit Professionals – they are the future of the industry. Lastly, I wanted to share a note of appreciation for

Western Australia/Northern Territory

outgoing Councillor, Martin Bigg who has sadly resigned from WA Council. Many thanks Martin, your knowledge sharing, efforts and input to Council and the Professional Development/CCE portfolio are hugely appreciated. We hope that we can again welcome you back on Council again someday. I look forward to seeing as many of our members as possible at our forthcoming events.

Insolvency Seminar host and WA Division President Troy Mulder receives his 15 year anniversary pin from AICM CEO Nick Pilavidis.

The Australian Institute of Credit Management welcomes our Partners for 2021 National Partners

– Troy Mulder MICM CCE Division President Trusted Insights. Responsible Decisions.

National Insolvency Seminar 2021 An intimate group of Credit and Insolvency professionals gathered at the beautiful Doubletree by Hilton Hotel in Perth’s entertainment district of Northbridge on 22 April for the Western Australian sessions of the 2021 National Insolvency Seminar. The day began with a delicious light lunch, following with MC Troy Mulder, WA Divisional President welcoming guests and leading the Welcome to Country. Privileged to be joined by several predominant and distinguished speakers, including our AICM CEO Nick Pilavidis, guests were treated to a very insightful and informative program that addressed the Insolvency Reforms and developments in bankruptcy, impacts of reforms, risk outlooks, and the challenges facing credit professionals and we navigate an economy both during and post-COVID impacts. A successful and enjoyable day was rounded out with delegates remaining post seminar to enjoy some light refreshments and canapes into the early evening as the nightlife of Northbridge came alive. Thanks to all our delegates for attending, and special thanks to our speakers Carmen Boothman, Nick Pilavidis, Rowan McClarty, Matthew Donnelly, Martin Bigg, Greg Prout, Raffaeele Di Renzo and Michelle Shackles for their time, sage advice and insights.

Divisional Partners

Official Division Supporting Sponsors

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 65

DIVISION REPORT

Martin Bigg receives his 5 year anniversary pin from AICM CEO Nick Pilavidis.

DIVISION REPORT

South Australia

Trevor Goodwin proudly receives his 25 year service pin from past National President James Neate.

25 year member Rob Naudi receives his service pin from National President Trevor Goodwin.

Presidents report What a wonderful start to 2021! The SA Division has been busy, having already held a number of events and planning a number of others. The year commenced with an informative and topical breakfast session – the tools for 2021! We firstly heard from Cameron Henderson of Oakbridge Lawyers, who provided insights about 2021 from a credit perspective including the impacts of legislative changes and Covid. Jo Marshall of Culturise, who is well known to the AICM community, then gave an energising presentation about the key elements of mental health in the workplace, including how we can support positive mental health, recognising the signs and supporting ourselves and each other in times of distress. I know that all attendees were able to take something positive away from the breakfast session and hopefully they were able to share with their broader workplaces. The third annual AICM National Insolvency Seminar was then held in March at Mayfair Hotel. Our MC James Neate (former National and Division President) kept attendees entertained between the content that had been carefully planned by Nick Pilavidis and his team (who worked tirelessly to make this event a success – thank you). We were grateful to have a number of senior credit, insolvency and legal professionals involved during the afternoon and we thank all of those people for their ongoing support of the AICM. So, what’s next for the SA Division? We will be holding our Economic Breakfast on 21 April 2021 at the beautiful Lion Hotel in North Adelaide. Mr Martin Haese, the Chief Executive Officer of Business SA, will present on evolving economic trends locally, nationally and internationally, which shall provide insights you can apply to guide your credit function in 2021. We thank Martin for agreeing to speak as I am certainly interested to hear his views about our economy and what the remainder of 2021 might have in store for us. Then, on 14 May 2021, we look forward to our annual Women in Credit Luncheon, proudly supporting Endometriosis Australia. This year, the event is being held 66 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

5 year service pin recipient Rebecca Young with Trevor Goodwin.

at the newly opened Crowne Plaza Adelaide – the views of the eastern part of the city will be beautiful. I am proud to be involved in this event and I am sure that, like in all previous years, our members and their teams will support this important cause and this wonderful event. I look forward to writing to you after these two fantastic events with the next issue of our magazine. Until then, I thank our Division Sponsors (SV Partners, Lane Communications & Credit Solutions) for their ongoing support and I hope everyone has enjoyed a busy start to the year as we now look to the end of the 2020/2021 financial year (can’t believe I am writing that)! – Alice Carter MICM CCE SA Division President

Recognition of a life member Lindsay Chuck The SA Division Council has been extremely blessed to benefit from the experience and dedication of Lindsay Chuck, who has been a member of the AICM since September 1983, and has served on the Council since 1996. Lindsay started his career in credit at Adelaide Brighton Cement. The

Lindsay Chuck.

South Australia

Credit Supervisor gave two weeks’ notice, and Lindsay was approached by the Chief Accountant and asked if he would consider the position. Up to that point, Lindsay had worked in the accounting area in a variety of roles, including wages, stores, accounts payable, general ledger, relieving paymaster and relieving Assistant Account. After 13 years as Credit Supervisor, Lindsay moved to the position of Credit Manager at BBC Hardware. After 5 years and the takeover of BBC Hardware by Wesfarmers, Lindsay joined Origin Energy and Wipro for 9 years where he held roles in the LPG business unit. During the period 1996 to 2014 Lindsay was a Councillor for 13 years in the following portfolios: Professional Development, Employment, CCE, and Publication. In addition to serving as a Councillor, Lindsay assisted the Council as minute taker from March 2015 to February 2021. A key highlight of Lindsay’s experience as a member of the AICM was receiving life membership on 16th July 2013. The night was also particularly memorable for Lindsay, as he also received the SA Division, Laurie Ellis Award for service to the SA Division. Lindsay has some sound advice for young credit professionals, being to take advantage of what the AICM membership offers and furthermore, to make the most of the training and professional development opportunities and develop a network of people in the industry. In his spare time, Lindsay enjoys picking up his grandchildren from school, along with exercise and Tai Chi. Furthermore, Lindsay is the Secretary of two committees in a retirement village, and secretary of a computer club, when he’s not jetting off on holiday to Europe and Bali. Lindsay’s plans for the future is to go on holiday again when the time is right, along with regular exercise and continuing his involvement in the various committees. Lindsay is now taking time to concentrate on his other commitments, and the SA Division Council would like to take this opportunity to thank Lindsay so much for his service, and it has really been a privilege having him as part of the team.

SA Insolvency Seminar On 16 March 2021, members of the SA Division met at the Mayfair Hotel for their second in-person event of the year. The event kicked off with James Neate from Lynch Meyer Lawyers as the MC, who delivered, as always, lively and entertaining commentary throughout. Mike Hayes from Piper Alderman followed, and provided a detailed and thought-provoking discussion on the topic of “Insolvency Reforms and Developments in Bankruptcy”. Mike gave particularly sound advice with respect to the temporary relief measures that were put into place from January 2021 – 31 March 2021, warning that “time is of the essence, so if you are going to do anything, do it quickly”. This was followed by a presentation by Nick Pilavidis, the AICM’S CEO and recipient of the Young Credit Professional of the Year award in 2005. Nick provided a valuable, national perspective of the insolvency risk outlook. Nick gave some interesting statistics on corporate insolvency, noting that when the insolvency protections had been introduced by the Government in late March/early April 2020, cases of corporate insolvency dropped by 38%. Nick also discussed the early warning signs of corporate insolvency, which are more important than ever to heed when the protections are taken away. The afternoon was then filled with lively panel discussions, the first being chaired by Matt Ormsby from SV Partners, who quizzed Mike Hayes from Piper Alderman, and Nick Cooper from Oracle Insolvency Services, about their thoughts regarding “How the insolvency reforms may impact you”. The second panel discussion was led by Nick Pilavidis, who invited a lively discussion with James Neate, Amanda Campbell from NCI, and Rob Naudi from Rodgers Reidy on the topic of “Tackling credit professional’s insolvency challenges”. The SA Division then made use of the opportunity April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 67

DIVISION REPORT

Nick Cooper (Oracle IS) and Mike Hayes (Piper Alderman) on the Insolvency Seminar panel.

National President Trevor Goodwin with our presenters Cameron Henderson (Oakbridge Lawyers), Jo Marshall (Cultuise) and new councillors Brianna Harris and Travis Olsen.

DIVISION REPORT

South Australia

Sandy Christpoulos (Motion), Ann Wilkins (FMG Engineering) and Lisa Anderson (Coopers Brewery).

Gemma McGrice and Nikki Swalling (both NCI) and Natasha Cocks (Atradius).

of having an in-person catch up to celebrate the longterm membership of Nick Cooper, Rob Naudi, Rebecca Young from Oracle Insolvency Services, and Lisa Anderson from Cooper’s Brewery. The event closed with drink and nibbles, where everyone enjoyed catching up, and discussing the thought-provoking topics of the day.

The SA Division Council is very excited to have Travis aboard, and believe that he will be a great asset and provide invaluable industry experience.

The Australian Institute of Credit Management welcomes our Partners for 2021

Recognition of a new council member National Partners Travis Olsen The SA Division Council is delighted to welcome Travis Olsen to join Brianna Harris as a Councillor of Professional Development. Travis brings a wealth of experience to the Council, having 14 years of experience in both personal and corporate insolvency, Travis Olsen. and being a Registered Liquidator at SV Partners. Travis was attracted to the role of Councillor of Professional Development, as he is passionate about further education and as a Registered Liquidator, Travis is often involved in the “worst case scenario” for the credit industry. This assists Travis in identifying areas that may be of concern for credit professionals, and it is gratifying for Travis to be able to provide professional development sessions that enable credit professionals to increase their professional knowledge. The best part of being a member of the AICM for Travis has been attending the various professional development and networking functions. Travis likes to get outdoors in his free time, enjoying playing basketball, playing (trying anyway) golf, spending time in the garden and outdoor adventures with his family. 68 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Trusted Insights. Responsible Decisions.

Divisional Partners

Official Division Supporting Sponsors

Victoria/Tasmania

Presidents report As we entered 2021, we knew that this year would be challenging, and we weren’t sure if our face-to-face events were happening. Surprisingly, we have had two events in the first quarter of the year and our insolvency seminar later on March 21. Thank you to our sponsors and members who have or will be attending these events. I thought I’d share our goals and commitment to each of our members and sponsors for the Victorian and Tasmanian division. We have a diverse and gender equal council. We all work for large organisations across commercial and consumer spaces and bring a lot of experience and knowledge to make the right decisions for all our members. Our commitment to our members is to provide the best event and networking nights by keeping you all updated with the changes we face daily in the world of covid. We also aim to deliver updates with current changes to legislation and share our experiences as credit professionals. We want to grow our membership this year in Vic/Tas Division by 20% and commit to connecting with all our new members. WINC – Women In Credit event, we would like to make this year bigger and better than prior years, and celebrate our success in both our professional and personal lives. The opportunity for our guest speaker to inspire us to become better individuals while juggling our many roles. The number of men who come along and support us in our professional careers is one thing I have seen grow over the last five years. YCPA – Young credit professional Award, we are looking at making this a black-tie event to celebrate our younger credit professionals’ success in our industries and organisations. Last year we had the honour of Vic/ Tas taking out the YCPA at Nationals, with Rebecca Roberts at Sensis. Thank you once again to all our members, sponsors, and councillors who make all our events successful and memorable. We look forward to seeing you all soon. – Sherif Hussein MICM CCE President Vic/Tas Division

Set the tone breakfast - Fantastic turnout for our first face to face event in 12 months!

Credit professionals welcome return of face to face events Breakfast Session – set the tone for 2021 Friday 12th of February

Our first event for the year was to “set the tone” for 2021 and it did exactly that. The room in Docklands was full of motivated people ready to reflect on 2020 and start anew. Our three guest speakers, Ellie Watts from Pride in Diversity, Gordon Jenkins a visibility coach and Nikki Dennis from SalesCRED helped us set goals, empower our teams and been more inclusive. In particular, Ellie spoke about race, looking and feeling different, and taught us to be more aware and conscience of our levels of empathy. Ellie talked through each of these topics while using her life story of wanting to be called “I” or by her “name” rather than her perceived gender. I found this incredibly difficult as I was writing this article in third person, but the point is that I was aware of this as I was writing this article thanks to Ellie. This is an area that I will work on. Gordon spoke to us about how he thought the world was eating him alive and defined the word “busy”. He helped us find time in our days, and we all know we need more time! Two simple, yet effective “calls to action” that I took away from his talk was getting someone else to April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 69

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Lou Caldararo (Vic/Tas Division Director), Elle Watts (Pride in Diversity), Catrina Galanti (Vic/Tas Vice President), Gordon Jenkins, Nikki Dennis (SalesCRED), Mary Petreski and Rebecca Roberts (both Vic/Tas Councillors).

DIVISION REPORT

Victoria/Tasmania

Lou Caldararo (Vic/Tas Director), Catrina Galanti (Vic/Tas Vice President) and Vaios Kortikis (Middencorp Electric).

Samantha Pendrey, Rebecca Roberts, Bella Pangilinan (all Sensis) with John Torounoglou (illion).

Catrina Galanti receives her 5 year pin from Lou Caldararo.

Timothy Holden receives his 5 year pin from Lou Caldararo.

buy my coffee which can save you up to 30 minutes a day or by doing one on one catch ups while walking and therefore I’m getting at least 1 an hour of exercise a day. We had talked so much that Nikki only had 8 minutes to speak. Nikki being so adaptive and concise outlined the risk of credit, and how to find it in the collections team. She also took us through how to improve processes for a better outcome for employees and customers. A huge thank you to our council members for hosting and organising this event, as well as our amazing speakers and sponsor.

coped during lockdown. We had a great mix of credit managers, lawyers, accountants and professionals and it was great to see a lot of new faces. The teams kicked off through the golf course and the ultimate winning team was mine, that consisted of myself, Catrina Galanti from NCI and Vaios Kortikis from Middy’s. Go Team! Thanks again to our sponsor Jeff Hurst from Trade Bureaux Association.

– Mary Petreski MICM CCE

Holey Moley golf – social event Thursday 4th of March

What a great place to host our first social event of the year – Holey Moley is Australia’s most unique mini golf venue, bar none. With 27 themed holes, tucked away in one of Melbourne’s famous laneways it almost felt like the good old days before COVID happened. We started with a few drinks while we all caught up with each other and learned how to interact face to face again. The common theme of the night was how nice it was to see people’s actual faces and learning about how differently everyone 70 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

– Lou Caldararo LICM CCE

Insolvency Seminar After a difficult 2020 and a tumultuous start to 2021 where many members were forced to work remotely in less than ideal conditions, our recent face to face events have been met with great welcome by members. This was exactly the case when over 50 attendees gathered together at the recent Insolvency Seminar. Certainly the topic was on point with the number of insolvencies expected to increase significantly off the back of the various COVID protections and reprieves put in place to help businesses weather the worst of the COVID downturn coming to an end. Members were treated to an array of excellent speakers such as Michael Lhuede a seasoned insolvency

Victoria/Tasmania

Jeff Hoenig receives his 15 year pin from Lou Caldararo.

lawyer and member of ARITA who discussed some of the mechanics of the new Small Business Restructuring (SBR) regime but importantly took members through some of the more worrying aspects of the new regime. The important take away for members is to tread warily when presented with a customer who has entered a SBR. The two panel sessions were well received with the panelists drawn from a mixture of experienced Credit Professionals, Mary Petreski, Lilian Bougiouklis and Carole McTavish, insolvency practitioners, Robyn Erskine, Timothy Holden and Andrew Mattison, and insolvency lawyers Michael Lhuede and Allan Kawalsky. The combined message was clearly expect the foreseeable future to be bumpy and stick to those credit fundamentals – know your customer and keep them close. AICM CEO Nick Pilavidis presented the AICM’s Insolvency Risk Report – a must read for every AICM member and now available on the AICM website. Key points were that while many members had found their ledgers had generally improved compared to previous years, we should all expect to see a spike of insolvencies amongst those customers who are now coming off government support and may have businesses that are not viable. Clearly as providers of credit we support customers where we can however it cannot be expected that support be given if the customer cannot show they are viable. The afternoon ran like clockwork thanks to the excellent MC skills of Catrina Galanti. It finished off with the presentation of membership badges to: z Claire Allison 10 years z Catrina Galanti 5 years z Jeff Hoenig 15 years z Timothy Holden 5 years z Jeffrey Hurst 45 years z Kim Radok 30 years in celebration of their important membership milestones. We gathered together for a drink and a long overdue catchup with colleagues, friends, and new acquaintances. The afternoon summed up some of the most

important benefits of being an AICM member – the ability of receiving valuable information that helps us in our daily work and the enjoyment of the fellowship of other credit professionals.

Member in Spotlight – 16 years of membership Rodney Lamb MICM Orora Limited, Working Capital Lead (Includes credit, AR, AP & Masterdata)

Rodney has been a member of the AICM for over 16 years. He started his finance career as a credit officer at Progress Printers and Distributors (now called PMP Limited) in 1990 and this Rodney Lamb MICM ignited his passion for credit and interacting with customers and salespeople. To date, Rodney relies on the AICM for updates on legislation changes, guidance, training and education and especially COVID credit related updates. Some highlights of his expansive and well-rounded 31-year career include: z Credit Officer in the radio division at Motorola z Managing the franchise division at Kleins z He ran his own debt collection and credit consultancy business z Head of credit and AR at Newell Brands z Accounts receivable lead at Orora where he had to set up an entire new credit department His biggest achievement to date, and where I saw Rodney’s eyes truly light up, was when he rolled out SAP to the APAC region for Newell Brands (Rubbermaid). He enjoyed working with the IT team overseeing this rollout across Asia Pacific. The US team were implementing it and Rodney was the local project team. He went to China eight times to train staff there in the system and understand their local requirements. Rodney’s hobbies include spending time with his April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 71

DIVISION REPORT

Claire Allison receives her 10 year pin from Lou Caldararo.

DIVISION REPORT

Victoria/Tasmania

Kim Radok receives his 30 year pin from Lou Caldararo.

Jeff Hurst receives his 45 year pin from Lou Caldararo.

daughter and stepdaughter when they are in town, gardening, marathon running and travelling to places like Croatia, Spain and Greece.

to know her customers in-depth. On a more personal note, Rebecca is an avid reader, loves gardening and is quite the green thumb. She is just about to plant a huge vegetable garden in her new home.

– Michelle Carruthers MICM

Member in Spotlight – Diploma of Credit Management Rebecca Lee MICM McCain Foods, Assistant Manager, Accounts Receivable

Rebecca is a formidable woman and makes the most of every opportunity! During COVID lockdown she not only moved house, home schooled her son Kadyn and began major renovations on her 1970’s house, Rebecca Lee MICM but thought she should future proof her career and started her diploma in Credit Management through the AICM. Her mentor Margaret said to her “Rebecca you don’t know what you don’t know”. She did her research and due diligence before choosing the AICM as the study provider and found that the AICM overall units covered topics that she was interested in, it was cost effective, and that the benefits going through the AICM gave her access to incredibly supportive trainers, the conference, seminars and the magazine for information. Rebecca doesn’t do things by halves, she is working full time, studying full time and is up to her 4th unit, which has taken her 9 months. She uses the time it would normally take to drive to work as her study time. She loves learning through study and reading policy, and doing the course has “reinforced why I do what I do and the policies around bankruptcy” and she absolutely loves it. Rebecca worked in Melbourne as an Office Manager and debt collector before relocating to Ballarat and taking up a role with IBM and then McCain. She has been at McCain for over 7.5 years and enjoys getting 72 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

The Australian Institute of Credit Management welcomes our Partners for 2021 National Partners

Trusted Insights. Responsible Decisions.

Divisional Partners

CREDIT MANAGEMENT SOFTWARE

Official Division Supporting Sponsors

New South Wales

NSW Division President Balveen Saini presents Glenn Harris with his 25 year service pin.

Grant Morris (National Credit Manager) and Sev Indrele (NSW Credit Manager) with items they purchased at the WINC auction which proceeds also went to Beyond Blue in addition to their in-house raffle.

Presidents report On behalf of the NSW Council, a warm welcome to AICM’s distinguished members, CCE’s partners and sponsors for 2021. We are well and truly into what is shaping up to be a great year for our members here in NSW. For the first few months of 2021 the NSW Council have been working hard behind the scenes to ensure our members are engaged, energised and excited about the year to come. All of this is with thanks to our National and Divisional Partners for their continued support in New and recertifying CCE’s: James Smith (ARMA), Michael Murray (Electrolux), Grant Morris (Chair NSW CCE committee), Mark Logue (AMPAC) and Andrew Le Marchant (AICM). ensuring that quality events, membership engagement and education is paramount to the AICM. With that said, calling out to all potential Young Credit Professional I take this opportunity to offer a warm welcome and candidates. We hosted a Young Credit Professional Information and Networking evening at Archie Brothers congratulations to the newest Divisional Partner of AICM, Creditorwatch. Cirque Electriq Alexandria on 1 April 2021. In addition to the Divisional Partners of the AICM, this event is being In an effort of ensuring that there is more consistency and uniformity with engagement and education nationally, supported by ARMA and Creditorwatch. NSW were the first state to roll out the National Insolvency The National Office are also advertising a series of Seminar. In collaboration with ARITA and a committee of webinars over the coming months. The webinars are credit, legal and insolvency professionals, on 11 March 2021, designed for you, the members, to ensure there are opportunities available, and at your disposal to advance AICM hosted the NSW seminar, with a record attendance from delegates. It was a high quality, educational and your education and professional development. insightful afternoon with members. We look forward to seeing you all over the coming I am sure by now that you may have heard from the months. NSW CCE chair, Grant Morris. Grant has been reaching – Balveen Saini MICM CCE NSW President out to members who are eligible to sit the CCE exam, or to those who need to re-certify. So if you are unsure as to whether you fall into this category, please reach out Not all hero’s wear capes to Grant or one of the NSW councilors to discuss (their Southern Steel Group was proud to assist the NSW contact details can be found here). 2020 Women in Credit (WINC) event by running a raffle We are getting ahead of the game this year, and in support of women in credit. The raffle raised $1,000 April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 73

DIVISION REPORT

NSW Division President Balveen Saini presents Eric Milne with his 40 year service pin.

DIVISION REPORT

New South Wales

Bruce Bills (Metcash), Phillip Baldwin (PB Credit) and Ellen Sinclair (Cosyn Software).

Eric Milne (Master Builders NSW), Prakash Singh (Budget Repair), Fabian Sommariva (Allegis Group), Mark Logue (AMPAC), David Hunt (Fuji Film) and Daniela Fraumeni (Master Builders NSW).

Natalie Ledlin (Ledlin Lawyers), Simon Culotta (CRM Credit Advisory), Gary Poslinsky (EDX), David Jovanov (ARMA) and Gregg Odlum (Hypotheque).

Mark Thirlwell (AICD and Speaker), Eric Maisonhaute (Esker), Fiona Reynolds (TurksLegal), Christphe Dumonet (Esker) and Nick Pilavidis (AICM).

Jessica Marie Dusevic and Michael Finch (both Roston Carlyle Lawyers), Peter Moore (Jirsch Sutherland), Ruby Montilla and Tony Wright (both Deloitte).

Geri Cremin (ARCA), Heather Spring (Stuart Alexander), Andrew Spring (Jirsch Sutherland), Nicholas Sussman and Shaun Swinton (both Finstro).

which was donated to WINC’s nominated charity – Beyond Blue. Mental health is taken seriously at Southern Steel Group where they are currently rolling out training in this area – “Managing for Team Wellbeing”; across Southern Steel Group’s 21 businesses. Congratulations to WINC for selecting this charity to support in 2020. We believe Women in Credit is a great initiative and at Southern Steel Group we are proud to say women make up 85% of our Credit Team and 77% of the Credit Management Team.

Economic breakfast

74 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

On 25 February 2021, sponsored by TurksLegal, a National Partner of the AICM and the National Economic Breakfast Sponsor, the AICM hosted the 2021 Economic Breakfast in NSW. Mark Thirwell, Chief Economist at the Australian Institute of Company Directors, never disappoints with his engaging delivery of all things from an economic viewpoint from a national and international perspective. Mark’s knowledge and grasp of this huge subject, coupled with his finger on the pulse appetite for all

New South Wales

Theresa Brown (NSW Division Vice President) with Chalisa Parekowhai (Australian Finance Industry Association).

Kristen Farmer (Mills Oakley), Bruce Gleeson (Jones Partners) and Sue Day (Manassen Foods) take part in a panel at the Insolvency Seminar.

Daniel Turk receives his 5 year membership certificate from NSW President Balveen Saini.

relevant current events and with his almost frighteningly accurate forecasting of where we are heading always makes for compelling attendance!

Insolvency seminar On 11 March 2021, the AICM, in collaboration with the Australian Restructuring Insolvency & Turnaround Association (ARITA), hosted the 2021 National Insolvency Seminar. AICM and ARITA developed a national committee of credit, legal and insolvency professionals who discussed, deliberated and debated on the current issues affecting industry professionals. The sessions were focused on insolvency reforms and developments in bankruptcy and liquidation in Australia, which later lead into an interactive discussion on tackling emerging challenges for credit professionals. It was a thoroughly enjoyable afternoon and a great opportunity for members, CCE’s, partners and sponsors to all be in a room catching up again with colleagues from the industry. However at the same time, attendees received extremely insightful reports into the many changes coming through in the insolvency industry which are affecting all credit professionals on a daily basis.

Tanya Nightingale receieves her 10 year membership certificate from NSW President Balveen Saini.

A big thank you to all the presenters, panelists, speakers and moderators who ensured that their contributions were delivered in a concise and articulate manner. They were: z Balveen Saini MICM CCE – Associate, BBW Lawyers and NSW AICM President; z Kirsten Farmer MICM – Partner, Mills Oakley; z Nick Pilavidis FICM CCE – CEO, AICM; z Theresa Brown MICM CCE – Associate Director Credit & Fraud Risk Operations, Optus; z Bruce Gleeson MICM – Firm Principal, Jones Partners; z Sue Day MICM CCE – National Credit Manager, Manassen Foods Australia; z Andrew Spring MICM – Partner, Jirsch Sutherland; z Daniel Turk MICM – Practice Head – Commercial, TurksLegal; z Mark Logue MICM CCE – Debt Collection Specialist & Joint Managing Director, AMPAC Debt Recovery; and z Michael Murray MICM CCE – National Credit Manager AU/NZ at Electrolux Home Products.

Sponsor in the spotlight NSW division is excited to welcome industry stalwart Creditorwatch as a partner. While many credit April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 75

DIVISION REPORT

Insolvency Seminar, panel presenters: Mark Logue (AMPAC), Daniel Turk (TurksLegal), Michael Murray (Electrolux) and Andrew Spring (Jirsch Sutherland).

DIVISION REPORT

New South Wales

Vivian Quinn (Biz Partner Hub), Glenn Harris (GH Credit Management) and Alex Clark (Aravanis).

Monique Hardy (InfoTrack), Stephanie Cheisi (Coates Hire) and Vasily Schehegolev (Bravure).

The Australian Institute of Credit Management welcomes our Partners for 2021 National Partners

Trusted Insights. Responsible Decisions.

Grant Morris (southern Steel), Beth Gray (Pizza Hut), Mark Logue (AMPAC), Nigel Fraser (Hardware & General) and Phillip Baldwin (PB Credit).

professionals know and understand CreditorWatch’s products we always recommend refreshing your understanding of what’s on offer and we’ve reached out to CreditorWatch’s NSW Sales Manager Rob Willoughby to hear a little about him and to give you some ideas of questions to ask when you speak with him at an upcoming event.

Divisional Partners

CREDIT MANAGEMENT SOFTWARE

Rob Willoughby.

Official Division Supporting Sponsors

Rob, you’ve recently started with CreditorWatch after 3.5 years at LinkedIn, that’s exciting, how long have you been working at Creditorwatch? I joined last November and accepted the role of NSW State Manager. What are you passions aside from work? I’ve really embraced Mountain-biking which has come with a move to the lower Blue Mountains. At the same time I’ve newly adopted Penrith Panthers as my main footy team. Rob’s keen to meet with all members and understand their credit reporting needs so please make him welcome when you see him. 76 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

New members

New South Wales

Victoria Glenda Andaya

Study Loans Australia Pty Ltd

Harnoor Bhandari

Transurban

Joseph Bonvino

Nutrien Ag Solutions

Karen Brazier

Spicers

Joshua Calleja

Transurban

Jessica Garcia

Mills Oakley

Rachael Gibbs

Mills Oakley

Patricia Gonzales

Study Loans Australia Pty Ltd

Richard Hicks

AKD Timber Trading Pty Ltd

Marija Jurisic

Metcash Supermarkets

David Lawes

National Mercantile Pty Ltd

Queensland

Henri Le Maire

National Mercantile Pty Ltd

Kasun Madava

Transurban

Leona Adams

Results Legal

Marcelino Mapalad

Study Loans Australia Pty Ltd

Sneha Brahmbhatt

Chevron Australia Downstream Pty Ltd

Perry Mathiopoulos

Australian Pharmaceutical Industries

Lauren Byrnes

Professional Collection Services

Shane Moloney

Moula

Melissa Einam

National Collection Services Pty Ltd

Mhel Morco

Study Loans Australia Pty Ltd

Hannah George

Results Legal

Caroline Pang

Study Loans

Kathie Goransson

Brisbane City Council

Iain Pepper

Study Loans Australia Pty Ltd

Olivia Hadok-Quadrio

National Collection Services

Kiara Perera

Transurban

Megan Hooper

Heritage Bank

Cristina Rivas

Study Loans Australia Pty Ltd

Preet Sanghera

Transurban

Michael Farlow

QBE

Kirsten Farmer

Mills Oakley

Manisha Gopal

Ecolab

Gemma Martin

Hobson Engineering Co Pty Ltd

Sarah Mitchell

Coates Hire Operations Pty Ltd

Sanjay Regmi

Coates Hire

Stacy Ridge

Smeg Australia

Namrata Soni

QBE Insurance

Shoban Thavachelvam

illion

Raymond Kaaya Samantha Lawrie

BDO Australia

Belinda Smith

National Mercantile Pty Ltd

Graham Lentell

Hastings Deering (Aust.) Ltd

Michael Smyth

Transurban Limited

Chris McKelvie

National Mercantile Pty Ltd

Gagan Sokhey

Nutrien Ag Solutions Limited

Nicole Neal

Results Legal

Linyu Song

Adecco Australia Pty Ltd

Komal Singh

Tradelink

Melinda Steur

Transurban

Brian Teo

Rodgers Reidy QLD

Richard Vien

Study Loans Australia Pty Ltd

Stewart Wilkinson

National Collection Services Pty Ltd

Li Sarn Yap

Adecco Group Australia

South Australia

Western Australia

Christine Digap

Adecco Australia Pty Ltd

David Baker

Freo Group Pty Ltd

Brigid Grimwood

Pernod Ricard Winemakers

Mirella Rodgers

Freo Group Pty Ltd

Robyn Harris

Financial Counselling Australia

Tracey Woods

Pernod Ricard Winemakers Pty Ltd

International

Michael Habegger

Tasmania David Beeson

JR Simplot Company

Tasmanian Collection Service

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 77

DIVISION REPORT

The Institute welcomes the following credit professionals who were recently admitted to membership.

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

COLLECTION SYSTEMS

INFORMATION

AICM Divisional Partner

CREDIT MANAGEMENT SOFTWARE

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.

COLLECTION SYSTEMS

CreditorWatch

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.

GPO Box 276 Sydney NSW 2001 Tel: 1300 501 312 Web: www.creditorwatch.com.au CreditorWatch is a leading commercial credit reporting bureau used by over 50,000 businesses across Australia. CreditorWatch offers a variety of products including customer monitoring/alerts, credit reporting, an indepth trade program and online credit applications to assist with customer onboarding and decisioning. Contact us today for more information or to organise a FREE TRIAL of any of products.

CONSULTANCY

AICM National Partner

AICM Divisional Partner

Esker Australia Pty Ltd Suite 1502, Level 15, 227 Elizabeth Street, Sydney NSW 2000 Tel: 02 8596 5126 Email: info@esker.com.au Web: www.esker.com.au Cash is the heartbeat of your business, so give your AR department the tool they deserve! Esker’s AR solution help companies reduce costs for invoice delivery, accelerate their cash collection process and automate the reconciliation of payments. Contact us to easily achieve your cash collection goals, tackle root causes of payment delays and reduce collection disputes while improving customer relationships.

Credit Solutions

Equifax

Unit 1/245 Fullarton Road Eastwood SA 5063 Tel: 08 8418 1450 Email: gcrowder@creditsolutions.net.au Web: www.creditsolutions.net.au

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

Credit Solutions, a division of the Credit Clear Group. 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 Credit Solutions has set the benchmark for providing quality collection and recovery services to South Australian businesses and government.

Equifax is a global information solutions company, providing data and insights that help organisations and individuals make more informed decisions. As a leading provider of credit information and analysis in Australia and New Zealand, Equifax serves key markets in risk management, marketing services and HR solutions. Drawing from trusted sources to compile and process data, Equifax helps its customers see things and make connections that others can’t.

AICM National Partner

DISTRIBUTION & PRINTING AICM Divisional Partner

AICM 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

Trusted Insights. Responsible Decisions.

illion Tel: 13 23 33 Web: www.illion.com.au

Lane Communications Tel: 08 8179 9900 Web: www.laneprint.com.au Lane are widely regarded as one of the largest and most technologically advanced print production and distribution companies in Australia. We are an industry leader in digital and offset print, point of sale signs, complex embellishments and print finishing, storage, kitting and mailing. With innovation at our core, our services extend beyond transactional mail and promotional print production to include SMS, bulk email communications, and electronic billing solutions. Lane are your partner in print and multi-channel communications.

78 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

Dun & Bradstreet has changed. We are now illion. Bringing data, analytics and insights to life is at the heart of what we do, and we will continue to break new ground in the product development and innovation space. Our commercial and consumer databases enable Australian businesses and consumers to make informed decisions, based on real time data drawn from an extensive range of sources. We remain a reliable and trusted partner to a wide range of global organisations, who use our solutions for credit reporting, risk management, sales and marketing and receivables management.

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

BRI Ferrier Unit 3, 99-101 Francis Street Northbridge WA 6003 Tel: 08 6316 2600 Fax: 08 9227 8008 Email: info@brifwa.com.au Web: www.briferrier.com.au BRI Ferrier is a national affiliation of insolvency accounting firms with offices across Australia as well as the United Kingdom and New Zealand. BRI Ferrier prides itself on being experts in business recovery, insolvency, forensic accounting, and advisory. All BRI Ferrier offices offer extensive experience across several industries, laying the foundation of our outside the box reputation. At BRI Ferrier, we focus on providing transparent solutions to financial challenges to help financially distressed businesses and individuals recover, change, and renew.

LEGAL

INSOLVENCY AICM Divisional Partner

Oakbridge Lawyers Pty Ltd

SV Partners Level 8, 68 St George’s Terrace, Perth WA 6000 GPO Box 2527, Perth WA 6001 Tel: 08 6277 0026 Fax: 07 3229 7285 Email: perth@svp.com.au SV Partners is a specialist accounting and advisory firm with 17 offices across Australia. Our expert accountants have the skills and experience to provide tailored insolvency, turnaround and advisory services. We partner with professionals and their clients, providing expert advice with a human touch.

AICM Divisional Partner

Tel: 1300 265 753 Web: www.jirschsutherland.com.au/ insolvencyintelligence/ Email: intelligence@jirschsutherland.com.au Insolvency Intelligence: a specialist provider of insolvency and turnaround advice and services for credit managers. Backed by national firm Jirsch Sutherland, our friendly team is just a phone call or email away, providing members with practical, strategic advice about corporate and personal insolvency. Free initial consultation; networking opportunities; training and presentations; knowledge database access. Contact us now to find out how we could assist you.

Tel: 1300 154 597 Email: contact@oakbridgelawyers.com.au Contact: Nikita Klar Web: www.oakbridgelawyers.com.au Oakbridge Lawyers is a national specialist credit litigation firm. Our friendly and experienced team understands that recovery action must be prompt, cost-effective and strategic, and we consistently achieve exceptional outcomes for our clients. Oakbridge acts for a broad range of creditors (from ASX listed entities to SMEs and everyone in between) in all major industries. Oakbridge Lawyers are also experts in the PPSA, privacy law and insolvency law.

AICM Divisional Partner

Results Legal

Vincents Insolvency Intelligence for Credit Managers

National Supporting Sponsor

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 and risk advisory, business advisory, corporate advisory, financial advisory, forensic services, and insolvency and reconstruction. Gain insight and take control with Vincents.

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.

AICM National Partner LEGAL

AICM Divisional Partner

TurksLegal SV Partners Level 4, 12 Pirie Street Adelaide SA 5000 Tel: 08 7077 2444 Email: adelaide@svp.com.au SV Partners is a specialist accounting and advisory firm with 17 offices across Australia. Our expert accountants have the skills and experience to provide tailored insolvency, turnaround and advisory services. We partner with professionals and their clients, providing expert advice with a human touch.

Tel: 02 8257 5700 Web: www.turkslegal.com.au Contact: Daniel Turk

Nova Legal Level 2, 50 Kings Park Road West Perth 6005 Tel: 08 9466 3177 Web: www.novalegal.com.au Nova Legal can assist with the recovery of problem debtors (large and small). Founding director Raffaele Di Renzo acts for creditors, debtors, directors, credit managers and insolvency practitioners in relation to solvency issues and dispute resolution.

AICM MARKETPLACE

TurksLegal is a specialist commercial law firm with 33 Partners and over 160 staff across our Sydney, Melbourne and Brisbane offices. We are proud to look after the interests of trade creditor suppliers and financial institutions in: l Portfolio debt recovery using our market-leading, real-time client interface, ‘TurksFocus’ l Resolution of complex debt disputes l PPSA recovery l Defence of unfair preference claims l Supply documentation and guarantees.

April 2021 • CREDIT MANAGEMENT IN AUSTRALIA 79

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 TECHNOLOGY

TRADE CREDIT INSURANCE

National Supporting Sponsor

Trade Credit Risk Pty Ltd CreditSoft Solutions Tel: 1300 720 164 Email: info@creditsoft.com.au Web: creditsoft.com.au CreditSoft specialises in providing credit managers with innovative products that will save your business significant operating costs and allow you to manage your time and resources more efficiently. We offer contact, tracing, payment, reporting and analytic solutions that redefine the way credit departments operate. Our goal is to ensure you achieve the best possible return on your investment.

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, Singapore and Malaysia. Trade credit insurance is a highly specialised area of insurance and with its 35 years of experience, NCI has developed an unmatched depth of expertise in arranging the right protection at the best price for your particular trading needs.

Tel: 03 9842 0986 Email: Siobhan@tradecreditrisk.com.au or Sharon@tradecreditrisk.com.au Web: www.tradecreditrisk.com.au Trade Credit Risk (TCR) is a Boutique Specialist Broker for Trade Credit Insurance. TCR has a very experienced team to provide personal service on all aspects of credit management. We provide the following services: l Insurance against bad debts for domestic and export ledgers l Credit Checks l 24/7 Monitoring of debtors for adverse information l Credit Limit Opinions

LET’S GIVE CREDIT TO YOUNG CREDIT PROFESSIONALS

DO YOU KNOW A TALENTED YOUNG CREDIT PROFESSIONAL WHO DESERVES RECOGNITION? The Young Credit Professional of the Year Award (YCPA) program is the largest and most prestigious Youth Credit Award program in Australia and provides a great opportunity for young Credit Professionals to gain recognition both for themselves and their employer.

The YCPA applications are now open!

By entering the YCPA program and discussing your career achievements and ambitions you will gain both valuable insight to the potential for your future advancement and support from young Credit Professionals like yourself and from experienced Credit Practitioners who are interested in assisting young Credit Professionals to achieve their potential.

CLICK HERE

80 CREDIT MANAGEMENT IN AUSTRALIA • April 2021

For registration information

AICM MARKETPLACE

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

Credit Management in Australia - April 2021

Articles inside

New insolvency laws bring small business funding needs into focus

Insolvency

Consumer Credit

AICM National Economic Breakfast series

Vocational education and training and its relevance to the credit industry

Masterclass

Message From the President

Pathways