Volume ,82 No 4 July 120
The Publication for Credit and Financial Professionals
IN AUSTRALIA
The future of credit is here...
Daniel Alley MICM (VIC/TAS)
Chris Armour MICM (NSW)
Olivia Berger (NSW)
Zarah Butcher MICM (VIC/TAS)
Annie Chau (NSW)
Natasha Clarkson MICM (VIC/TAS)
Scarlett D’Agnone (WA)
Vaibhav Gupta (WA)
Michael Harris (SA)
Alex Hawtin MICM (VIC/TAS)
Cameron Henderson MICM (SA)
Celerina Jung (NSW)
Zandalee McKenzie MICM (QLD)
Andrew Nagle MICM (NSW)
Brigid Nichols (VIC/TAS)
Annie-May Paties (QLD)
Stephanie Ross MICM CCE (NSW)
Madison Ryan MICM (QLD)
John Torounoglou MICM (VIC/TAS)
Clare Venema MICM CCE (SA)
turn to page 8 to learn more about our 2021 Young Credit Professionals
Our 2021 supporters National partners
Trusted Insights. Responsible Decisions.
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Divisional supporting sponsors
2 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Contents Volume 28, Number 4 – July 2021
Message from the President
6
8
YCPA State finalists
Pathways Ensure that the training budgets spend for this financial year has a positive impact
13
Recent graduates
15 15
Training calendar
Consumer Credit New score accelerates rollout of open banking
16
By Barrett Hasseldine
18
Irresponsible lending or borrower beware
16
8 YCP finalists
18 Clare Venema
Barrett Hasseldine
22 Eric Maisonhaute
By Clare Venema
Credit Management 5 Strategies for achieving a best-in-class credit and collections process
22
By Eric Maisonhaute
Business owners are conserving cash, turning to non-bank lenders and planning to restructure
26
26 Jon Sutton
32 Adrian Floate
By Jon Sutton
Future-proof your business with digital tools and integrated payments
32
By Adrian Floate
Good governance – what is all the fuss about?
36
By Jody Wright
The place for legal action and enforcement in the Post-COVID-19 world
38
36 Jody Wright
38 Roger Mendelson
By Roger Mendelson
The importance of credit management/accounts receivable in your marketing program
40
By Kim Radok
From crisis to opportunity: the future of B2B trade and credit management By Mark Hoppe
45
40 Kim Radok
45 Mark Hoppe
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA
3
Contents ISSN 2207-6549
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 Julie McNamara MICM CCE – Queensland
47 Emma Mos
50
50
James Devonish
Alida Chan
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 PUBLISHER Nick Pilavidis FICM CCE | Email: nick@aicm.com.au
54 Alan Izra
58 Georgina Wu
CONTRIBUTING EDITORS NSW – Balveen Saini MICM CCE Qld – Stacey Woodward MICM SA – Clare Venema MICM CCE 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
60 Mark Wenn
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.
JOIN US ON LINKEDIN
60 Phoebe Pitt
Insolvency Shining a spotlight on Australia’s bankruptcy laws
Full Federal Court smokes the peak indebtedness rule in Gunns decision!
EDITORIAL CONTRIBUTIONS SHOULD BE SENT TO: The Editor, Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065 or email: aicm@aicm.com.au
A Review of the Key Issues of winding up a Corporate Trustee for the benefit of creditors
54
By Alan Izra
Legal
58
By Georgina Wu
Hedging your bets. How to ensure your statutory demand has been properly served
60
By Mark Wenn and Phoebe Pitt
Member Anniversaries 4 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
50
By James Devonish and Alida Chan
Caveats revisited – how can they assist a creditor in recovering debts?
Click Here
47
By Emma Mos
64
Volume 28, Number 4 – July 2021
67
Contents
72
SA: Women in Credit Luncheon: Claire Muecke (SV Partners), Chloe Parker (HWL Ebsworth), Rebecca Coates and Hannah King (both SV Partners).
76
Qld: Mev Mahony (Qld Division Councillor) with members receiving length of membership certificates: Talitha Bere (5 years), Carly Rae-Orth (10 Years), Simon Culotta (25 years) and Maria Teodosio (10 years).
80
WA/NT: Life member and past national president Frank Vredenbregt receives his CCE recertification from WA Councillor Raff Di Renzo.
Vic/Tas: Sherif Hussein (Vic/Tas Division President) with Tony Mackwell (Victorian Managed Insurance Authority), Carole McTavish (Australia Post) and Mary Petreski (Vic/Tas Division Councillor).
Division Reports
New Members
67 72 76 80 88 94
Credit Marketplace
96
South Australia Queensland Western Australia/Northern Territory Victoria/Tasmania New South Wales
88 NSW: Emma Berry, Caroline Smith, Annie Esposito and Arman Vejdani (all CreditorWatch).
For advertising opportunities in Credit Management In Australia Contact: Andrew Le Marchant Ph: 1300 560 996 E: andrew@aicm.com.au
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 5
aicm
From the President
Trevor Goodwin LICM CCE National President
I
write to you at a time when we continue
is constantly evolving, requiring us to be
to work in an ongoing COVID-19
adaptable and able to adjust in the way we
environment and vaccinations are well
undertake our roles. Work from home has
in progress throughout Australian.
become a normal work environment for many
It is an important period and a time to take
people particularly with employees in States
stock of what we as an Institute has learnt
effected most by Coronavirus.
from the pandemic and the important work and opportunities that lie ahead of us. Business will continue to play an
The AICM understands the relevance and importance of education and has increased our offerings to members across
important role in maintaining a sound
a number of forms of study. This continues
economy and credit management will
to be an important role of the Institute
be front and centre in ensuring your
and we have recently advertised, and
organisations risk profile is strong with the
received nominations, from students for
protection of accounts receivable assets,
the first scholarship award of our Education
while finding innovative ways to do business.
Foundation scheme. It is important we
Over the past 15 months, the AICM, like
offer a meaningful pathway for our younger
many other organisations, has undergone
members looking to cement a long term
some significant changes. We have needed to
career in Credit.
adapt and change the way we have worked,
COVID-19 has seen legislators focus
bringing in new innovations and adopting
much needed attention to areas of economic
new technologies to develop and improve the
and business progression. We have seen an
way we operate and provide services for our
acceleration of reforms such as the changes
members.
to the insolvency laws with the introduction
To ensure we continue to grow our
of small business restructuring practitioners
membership and increase our offerings,
and a streamlining in the winding up of a
the AICM has reviewed the staffing, roles
business process. The AICM has written a
and structure within our National Office
number of submissions on behalf of our
while looking to redevelop and modernise
membership and will continue to advocate
our website to provide the best service
across a broard range of issues that affect
to members, supported by hard working
our members and their profession.
volunteers in each divisional Council. Education remains a critical aspect to the
It is pleasing to inform you that our membership base has continued to maintain
performance of your duties and maintaining
its good numbers in all divisions and
your professional status. The past 15 months
emphasises the engagement we have with
has seen an increased expansion of digital
our members and their understanding of
delivery in education and how we conduct
the important role the institute plays in their
meetings. We now live in a digital world that
career and education.
6 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
From the President
aicm
The second half of our calendar year which is always our busiest period will see us hold our YCP interviews and Awards nights,
volunteering their time as it is very rewarding and can assist with career development. The Board is half-way through its 3-year
our National Conference which we will hold
strategic plan and we are pleased in what has
at the Sofitel Hotel in Brisbane in October,
been achieved so far during this COVID‑19
and the end of year Pinnacles Awards
time. At the August Board meeting we will
evening. These are all important events in
review where the strategic plan is at and will
our calendar. A number of WINC luncheons
make adjustments and additions to best suit
are still to be held in States where they have
the current position of the Institute and how
been postponed due to COVID-19 lockdowns.
we intend operations to continue evolving
The WINC events which have been held have
to best assist our members and provide
been highly successful with record numbers
worthwhile engagement.
of attendees, and through sponsor raffles
The Board and dedicated National
have raised considerable donations for
Office team are committed to ensuring our
charity which is a celebration of the generous
members are equipped to support their
nature of WINC attendees.
clients, employees, and themselves in dealing
The YCP Award this year is being
in all credit matters, while recognising issues
sponsored by Australian Recoveries
such as financial hardship and mental health.
& Mercantile Agents (ARMA) and
We continue to review the way we deliver
CreditorWatch. It is pleasing to advise we
our professional development and have
have received a record number of YCP
broadened our range, giving our members
candidates which shows the importance of
more variety and making it more convenient
this award to “under 30” credit professionals who are showing great interest in building their career. This is also the time of the year we prepare for the Credit Team of the Year Award, and a number of teams have already nominated and are busily preparing their presentations and building strong rapport between team members. The divisional Councillors work on a volunteer basis and the State Councils are currently holding their Annual General Meetings and election of Council members.
for you to educate and network. We also continued to advocate to further the interests of our members and the credit profession. In closing, I take this opportunity to remind members the AICM is Australia’s leading professional membership body for commercial and consumer credit professionals, and the only credit industryspecific Registered Training Organisation in the country. We are the voice of the credit management profession to which all our members should be proud to be a part of.
This is a great time for financial members
– Trevor Goodwin LICM CCE
to consider joining their local Council and
National President
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 7
Young Credit Professional of the Year
QUEENSLAND
FINALISTS
Zandalee McKenzie MICM
Annie-May Paties
Associate, Oakbridge Lawyers
Senior Account Manager, Atradius
Madison Ryan MICM Credit Controller, Dynamic Supplies
To view more information on these Awards please
click here
8 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
PROUDLY SPONSORED BY
FINALISTS
Michael Harris
Business Improvement Consultant, Credit Clear Limited
Cameron Henderson MICM Associate, Oakbridge Lawyers
Clare Venema MICM CCE
Young Credit Professional of the Year
SOUTH AUSTRALIA
Credit Compliance Officer, Restore My Credit
To view more information on these Awards please
PROUDLY SPONSORED BY
click here
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 9
Young Credit Professional of the Year
VICTORIA/TASMANIA
FINALISTS
Daniel Alley MICM Senior Credit Risk Analyst, Reece Group
Alex Hawtin MICM
Legal Recoveries and Reporting Officer, Middy’s Electrical
Zarah Butcher MICM Finance Officer, Mecwacare
Brigid Nichols
Accounts Receivable Clerk, Woolworths Group
To view more information on these Awards please
click here
10 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Natasha Clarkson MICM Credit Officer, DuluxGroup
John Torounoglou MICM National Account Director, illion
PROUDLY SPONSORED BY
FINALISTS
Scarlett D’Agnone Credit Officer, WesTrac
Vaibhav Gupta Accountant, Metroll
To view more information on these Awards please
Young Credit Professional of the Year
WESTERN AUSTRALIA/ NORTHERN TERRITORY
PROUDLY SPONSORED BY
click here
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 11
Young Credit Professional of the Year
NEW SOUTH WALES
FINALISTS
Chris Armour MICM
Olivia Berger
Annie Chau
Arrangements Manager, Shield Mercantile
Supplier Relationships Manager, CBA
Accounts Receivable Team Leader, MMPlastics
Celerina Jung
Andrew Nagle MICM
Stephanie Ross (Patane) MICM CCE
Credit Assessment Manager, Athena Home Loans
Credit Administration Team Leader, Rexel
To view more information on these Awards please
click here
12 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Credit Officer, Pro-Pac Group Pty Ltd
PROUDLY SPONSORED BY
Pathways aicm
Ensure that the training budgets spend for this financial year has a positive impact Education and further training is an extremely important part of employees development, especially if there is a particular skill gap that individuals within an organisation could undertake training on. If you have a certain time of the year where you schedule in training, you may be looking at what sorts of training would be most beneficial.
Identify the skills: Now is the perfect time to sit down and really think about the skills your employees need to have. This may be very different for each member of your team, depending on what their job role entails. People who work behind the scenes will certainly have a different skills-set requirement to those who are customer facing. It is very important to consider individuals specific needs, based on their role within the organisation. Make sure that you draw up a skills list that you expect individuals to have. You may want to sit down with their direct line manager to make sure that you are gathering an accurate representation of the type of training they may need. Taking time to write out what you want from employees, will make it easy to see if your employees
are living up to your expectations, or whether there is a gap that requires addressing. Gaps in knowledge could be because legislation has changed or there is a change in an internal policy within your organisation.
Ask around: One way to see if your employees are performing is to gather feedback from internal and external stakeholders that they interact with on a daily basis. This can be a wealth of knowledge in relation to obtaining clarity on any knowledge gaps. If your employees are in a customer facing role, it is imperative to offer your customers the ability to provide feedback on the service they receive. This will mean you can identify what your employees are doing well, and gaps that require addressing. This form of feedback is sometimes difficult to obtain, as there is no way of making a customer provide feedback, so you may not gather enough data to make an informed decision. Another way to obtain feedback is by directly asking employees. Many organisations get employees to fill out an anonymous 360-degree feedback form. A 360-degree feedback is a method and a tool that provides each employee the opportunity to receive
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 13
aicm
Pathways “If you want to see how your employees are doing with things like interacting with customers, and dealing with customer enquiries over the phone, role plays may be the best way to get a general idea.” performance feedback from their managers, peers and reporting employees and also external customers. It also provides an opportunity for managers and individuals to understand how their effectiveness as an employee is viewed by others. This form is designed to evaluate an employee’s performance from all sides. In order to get a clear picture of how your employees are getting on in the workplace you could ask them to fill out one themselves, as well as asking their manager, or anyone who is managed by that employee, and people who work directly with the employee. This will enable you to see how they work in all different aspects of their role, as they could be excellent at managing their own employees, however, perhaps not as good at working with people outside their immediate team. Create questions in the questionnaire which apply to the sorts of skills you expect your employees to have, and then you can see which areas they are falling short on. Questions are typically answered in the form of a numbered scale, so you can easily compare the answers from many different sources, and see which areas they may need work in. Finally, ask the employees directly! Some people may be very aware that there is a gap in their knowledge that is affecting their work life and are very keen to obtain further training to address the issue. If many of your employees has similar answers, you can be sure that booking a training course around that gap would be a very wise decision. This may not work for all skills required in your workplace, however, if you have a particular skill that you can easily test, it may be the best way to see how your employees are performing. There are several ways in which to do this.
Observation: If you want to see how your employees are doing with things like interacting with customers, and dealing with customer enquiries over the phone, role plays may be the best way to get a general idea. While your employees may be on their best behaviour if they
14 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
know they are being assessed, it will still provide you with a good indication if they are asking all the right questions, or if they know how to deal with certain problems in the correct way.
Practical: This is similar to role play and a great way to see if employees can carry out the tasks you expect them to be able to do in the workplace. Whether it is filling in a document a certain way or the stages of identifying a customer problem with a payment issue, it is important that your employees know how you expect them to do their job, and a practical test enables you to see where they require additional training.
Questioning: This is a good way to test your employees on their knowledge of your company’s procedures, on how to undertake tasks. This will allow you to quickly and clearly identify where gaps in their knowledge are evident. It could be a question on how they would deal with a new customer, or how they deal with a customer complaint, so you can identify if there are any pieces of the company procedures that they feel are unclear, or they do not understand. Now you should have a better idea of where the knowledge gaps lie within your employees, which means you can go ahead and start booking the relevant training to get everyone on the same page, so to speak. Taking the time to recognise skill gaps is an excellent exercise, as it means you are providing relevant training for your employees, and not just what you assume they need as sometimes personalities can cloud judgement. This should also help your employees recognise that they are valued and that you are keen to train them on the things that will make their lives easier, and improve their workday, and that you are not just providing training for the sake of it. For the best results, make sure your repeat this type of exercise regularly, so if you do identify any skill gaps, you can address them before they become a critical issue.
What it means for you? It is important to start thinking about what skills will be required in the future within your role and within the credit industry. As part of the research process it is worth collecting as much information on current and emerging roles via industry and government reports, social media platforms such as LinkedIn, thought leader periodicals, job search sites such as Seek or via education and professional associations such as AICM to gain an understanding of what your future and future training requirements may look like.
Pathways aicm
AICM recent graduates AICM would like to congratulate its recent graduates:
FNS51515 – Diploma of credit management Raymond Miles
NSW
N/A
Kathi Purkis
NSW
N/A
Tracy Stewart
VIC
Gippsland Water
FNS40115– Certificate IV in Credit Management: Talitha Bere
QLD
Shell Energy Australia
Ratinesh Lal
NSW
Mesh and Bar
FNS30415– Certificate III in Mercantile Agents: Fiona Burfield
QLD
Finance One
Statement of Attainments: Jessica Burns
NSW
FNSCRD511 – Respond to personal insolvency situations
Acrow Formwork & Scaffolding Pty Ltd
Stacy Ridge
NSW
FNSCRD401 – Assess credit applications
Smeg Australia
Virtual classroom training calendar Date
Type
Topic/event name
Tuesday 24 and Wednesday 25 August 2021
RTO – Certificate IV
FNSCRD401 Assess credit applications
Tuesday 14 September 2021
Workshop
Understanding Financial Hardship
Wednesday 15 and Thursday 16 September 2021
RTO – Diploma – Elective unit And Cert IV – Elective unit
FNSCRD503 – Promote understanding and the effective use of consumer credit
Tuesday 21 September 2021
Toolbox
Collect with confidence
Wednesday 22 and Thursday 23 September 2021
RTO – Certificate IV
BSBCUS403 Implement customer service standards
Wednesday 6 and Thursday 7 October 2021
RTO – Certificate IV and Diploma
FNSORG411 and FNSINC411 Legal compliance
Tuesday 19 October 2021
Toolbox
Understanding credit risk
Wednesday 20 and Thursday 21 October
RTO – Diploma
BSBCUS501 Manage quality customer service
Tuesday 9 November 2021
Workshop
Understanding Personal Bankruptcy
Wednesday 10 and Thursday 11 November 2021
RTO – Certificate IV
FNSCUS402 Resolve disputes
Tuesday 16 November 2021
Workshop
Personal property securities
Wednesday 17 and Thursday 18 November 2021
RTO – Diploma
FNSCRD515 Respond to corporate insolvency situations
Wednesday 24 and Thursday 25 November 2021
RTO – Certificate IV
FNSRSK411 Apply risk management strategies to own work
Tuesday 7 December 2021
Toolbox
Wednesday 8 and Thursday 9 December 2021
RTO – Diploma
Fundamentals of credit July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 15
BSBRSK501 Manage risk
Consumer Credit
New score accelerates risk-based management By Barrett Hasseldine*
Our team of data scientists at illion have unlocked new insights into consumers’ credit risk behaviour, based on key trends from income and expense transactions that have traditionally been hidden. In a post-COVID-19 world, this is the game changer that the market has been looking for – a more sharply focused lens which gives decision makers a clearer picture than they have had before. There are upsides for consumers as well as credit providers, with the key insights needed to unlock more tailored lending terms and conditions and a broader range of
products through enhanced credit underwriting and more suitable loan pricing. This is good for financial institutions who can price more efficiently, lend more responsibly and do so at lower cost, and it is good for consumers who will have an expanded choice and get the products that are right for them, quickly. It’s one of those rare innovations where everybody wins. Our modelling also shows that for personal loans, lenders can increase their portfolio profits by 20%1, considerably reduce risk, and have happier customers.
Profit per Credit Application from each Risk Assessment Scenario
Profit per Application
Barrett Hasseldine
16 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Consumer Credit
“In a post-COVID-19 world, this is the game changer that the market has been looking for – a more sharply focused lens which gives decision makers a clearer picture than they have had before.” Banks and credit providers hold a raft of data that shows both the financial state and spending behaviour of their customers. What the score does is mine this data and make sense out of it in a straightforward manner. While this data offers the capability to understand spending behaviour, most credit providers
have made limited use of it for this purpose. For example, it has rarely been used to understand a consumer’s propensity to modify consumption habits in-line with their economic wellbeing. Furthermore, by their nature, smaller banks have traditionally had limited access to transaction information, as they have generally
held a secondary relationship with the consumer. This has disadvantaged them when competing with Tier 1 banking institutions for prime borrowers. Developing Transaction Scores requires both a technical understanding of banking data structures as well as a deep knowledge of spending and broader consumption behaviour. *Barrett Hasseldine Head of Modelling illion E: barrett.hasseldine@illion.com.au
FOOTNOTES: 1 Over the use of traditional credit risk data alone.
Our modelling team need more than just pretty faces The team coded and analysed more than 1,000 business-interpretable transaction data features, then used a combination of traditional modelling and Machine Learning techniques to develop our illion Transaction Risk Score.
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 17
Consumer Credit
Irresponsible lending or borrower beware? By Clare Venema MICM CCE*
Clare Venema MICM CCE
The National Consumer Credit Protection Act 2009 (Act) has been in force for more than 10 years, and introduced principles that aim to ensure that lenders do not provide unsuitable loans to consumers.1 However, the Government is now saying that the responsible lending obligations have been implemented in a way that is no longer fit for purpose, and risk slowing down Australia’s economic recovery.2 In short, the Government has proposed that the responsible lending obligations under the Act will be scrapped. The simplification of the credit process has been largely supported by the finance and property industries in the aim of reducing the red-tape in the loan writing process and easing up the flow of credit.3 Treasurer Josh Frydenberg has openly offered his support in favour of the changes, particularly in light of the country’s economic fallout from COVID-19, stating, “It’s now more important than ever that our economic recovery is not held back by unnecessary barriers to the flow of credit to households and business”.4
The current obligations Responsible lending laws were introduced in 2009 following the Global Financial Crisis.5 Under the current laws, lenders are required to verify the borrower’s financial status and provide that information back to the borrower, and further, provide the borrower with a quote setting out the maximum they may be required to pay back.6 In essence, lenders are discouraged from encouraging borrowers to borrow money that they cannot afford, and if a borrower is deemed unsuitable for a particular loan or credit amount, the lender cannot give it to them.7
The potential impact on consumers Under the new system, lenders would still be required to take reasonable steps to check whether a borrower has the capacity to pay a loan, however following the changes, the obligations on the lender will be proportionate with the risk.8 As a result, credit providers will be able to simplify their credit assessment
“The simplification of the credit process has been largely supported by the finance and property industries in the aim of reducing the red-tape in the loan writing process and easing up the flow of credit.3”
18 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Consumer Credit
process and extend credit in a more timely and efficient manner.9 Early media releases regarding the changes have coined the phrase “borrower beware”, meaning that borrowers will be made more accountable for providing accurate information to inform lending decisions, replacing the current practice of “lender beware”.10 It is noted, that there has been some push-back to these proposed changes. Namely, more than 33,000 individuals, charities, unions, consumer groups and financial counsellors have signed a CHOICE open letter opposing the reforms.11 Furthermore, Senator Pauline Hanson has recently indicated that she would be opposing the repeals when it is voted on in the Senate, being one of the few crossbenchers who could sway the legislation.12
“Early media releases regarding the changes have coined the phrase “borrower beware”, meaning that borrowers will be made more accountable for providing accurate information to inform lending decisions, replacing the current practice of “lender beware”.” Furthermore, Monash University Economist Dr John Vaz has expressed his concern with putting the responsibility on borrowers, namely, that scrapping the existing laws could lead to predatory lending.13 Dr Vaz went on to say that “There’s no protection for those people that [lack] financial literacy or need a loan out of desperation…that allows for predatory lending to come into play, in other words, lending to people knowing they’re unlikely to pay back.”14
However, the Senate Committee have reasoned that the regulatory changes will not undermine consumer protections and that the principle of responsible lending is deeply embedded in Australia’s broader regulatory framework, which credit providers must still operate within and comply with.15 Namely, since the introduction of responsible lending obligations, the Government has introduced a number of significant changes in ➤
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 19
Consumer Credit
“...the Government has also introduced protection to consumers from potentially predatory practices of debt management firms by introducing licensing obligations, and therefore, ensuring that such firms meet the ongoing obligations imposed on credit licenses.” other areas of the law that have already strengthened consumer protection in the credit system,16 such as: — Providing the Australian Securities and Investments Commission (ASIC) with a product intervention power that allows ASIC to ban, or amend, a credit product where that product has resulted, or is likely to result, in significant consumer detriment;17 — Introducing a design and distribution obligation which will require product issuers to identify and distribute their products to appropriate consumers to reduce the risk of consumers acquiring or being mis-sold products that do not meet their needs;18 — Introducing a best interests duty for mortgage brokers which will ensure mortgage brokers act in the best interests of consumers when providing credit assistance;19 — More than doubling the maximum corporate and financial sector civil and criminal penalties under the Credit Act;20 — Enhancing protections for credit card customers by banning unsolicited offers of credit limit increases, simplifying how interest is calculated and requiring online options be available for
consumers to cancel cards or reduce their limits;21 and — Establishing the Australian Financial Complaints Authority (AFCA), therefore increasing access for borrowers to external dispute resolution.22 It follows, that consumers more broadly, will continue to have access to protections via existing frameworks. Furthermore, the Australian Prudential Regulation Authority (APRA) has updated its standards for Authorised Deposit-Taking Institutions (ADI) to ensure that lenders have appropriate standards for managing risks.23 Namely, APRA’s standards set out requirements for credit risk management that ADI’s are expected to meet, which include expectations of proper lending practices.24 Furthermore, the Government has also introduced protection to consumers from potentially predatory practices of debt management firms by introducing licensing obligations, and therefore, ensuring that such firms meet the ongoing obligations imposed on credit licenses.25 It follows, that firms that do not comply with the requirements of the transitional arrangements and continue to provide debt management services from 1 July 2021 will likely be engaging in credit activities while unlicensed, which has
20 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
been added as an offence under s. 29 of the National Consumer Protection Act 2009.26
Conclusion The Consumer Action Law Centre’s Chief Executive, Gerald Brody, has warned that “Even if the big banks don’t change their practices immediately, there will be other lenders in the marketplace that will. They will see this as an opportunity to grab market share and reduce their standards so as to provide people more credit than they can afford”.27 However, there is something to be said for borrower responsibility, with the changes aiming to address the excessive risk aversion that has progressively entered the system, restricting the flow of credit through addressing the “one size fits all” approach to lending.28 As it stands, it will be fascinating to see whether the pre-existing means of consumer protection in the credit system will be enough, or whether, as said by banking expert Peter Marshall, “It’s all very well to say, ‘people should take responsibility for their own financial decisions’, but for the everyday person who might not be as educated around these financial questions, these changes open them up to a lot of risk.29
Consumer Credit
*Clare Venema MICM CCE E: vene0010@outlook.com T: 0435 636 969 FOOTNOTES: 1 Sarah Simpkins, Treasurer stays firm on responsible lending repeal, The Adviser, 24 May 2021, https://www.theadviser.com.au/ breaking-news/41596-treasurer-stays-firmon-responsible-lending-repeal 2 Ibid 3 Ibid 4 Ibid 5 Olivia Gee, How are responsible lending laws changing in 2021?, Mozo, 18 March 2021, https://mozo.com.au/home-loans/ articles/how-are-responsible-lendinglaws-changing 6 Ibid 7 Kathryn Lewis, Explainer: How a move to scrap responsible lending laws could impact you, The Canberra Times, 26 April 2021, https://www.canberratimes. com.au/story/7221873/lending-lawsmight-be-changing-heres-what-thatmeans-for-you/#:~:text=What%20 are%20responsible%20lending%20 obligations,t%20afford%20to%20 pay%20back. 8 Consumer Credit Reforms Factsheet, https://ministers.treasury.gov.au/sites/
ministers.treasury.gov.au/files/2020-09/ Consumer-credit-reforms-fact-sheet.pdf 9 Ibid 10 Royce Kurmelvos, Borrower beware: how responsible lending changes could put more vulnerable Australians in debt, The Guardian, 21 March 2021, https://www.theguardian.com/australianews/2021/mar/21/borrower-beware-howresponsible-lending-changes-could-putmore-vulnerable-australians-in-debt 11 Ibid 12 Sarah Simpkins, Treasurer stays firm on responsible lending repeal, The Adviser, 24 May 2021, https://www.theadviser.com.au/ breaking-news/41596-treasurer-stays-firmon-responsible-lending-repeal 13 Kathryn Lewis, Explainer: How a move to scrap responsible lending laws could impact you, The Canberra Times, 26 April 2021, https://www.canberratimes. com.au/story/7221873/lending-lawsmight-be-changing-heres-what-thatmeans-for-you/#:~:text=What%20 are%20responsible%20lending%20 obligations,t%20afford%20to%20 pay%20back. 14 Ibid 15 Ibid 16 Consumer Credit Reforms Factsheet, https://ministers.treasury.gov.au/sites/
ministers.treasury.gov.au/files/2020-09/ Consumer-credit-reforms-fact-sheet.pdf 17 Ibid 18 Ibid 19 Ibid 20 Ibid 21 Ibid 22 Ibid 23 Ibid 24 Ibid 25 Ibid 26 Ibid 27 Royce Kurmelvos, Borrower beware: how responsible lending changes could put more vulnerable Australians in debt, The Guardian, 21 March 2021, https://www.theguardian.com/australianews/2021/mar/21/borrower-beware-howresponsible-lending-changes-could-putmore-vulnerable-australians-in-debt 28 Consumer Credit Reforms Factsheet, https://ministers.treasury.gov.au/sites/ ministers.treasury.gov.au/files/2020-09/ Consumer-credit-reforms-fact-sheet.pdf 29 Olivia Gee, How are responsible lending laws changing in 2021?, Mozo, 18 March 2021, https://mozo.com.au/home-loans/ articles/how-are-responsible-lendinglaws-changing
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July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 21
Credit Management
strategies for achieving a best-in-class credit & collections process By Eric Maisonhaute MICM*
Introduction Trading on credit has become necessary for companies looking to drive sales and improve their competitive advantage. Today, the majority of B2B invoices issued worldwide involves trade credit1, however, an invoice on credit is at risk of payment delay. These delays can jeopardise cashflow or lead to the invoice eventually being written off as uncollectable. The COVID-19 pandemic has been a major cause of increased average payment times and writeoffs (2 to 3 times higher than in 20191). Also, companies are moving
towards insuring receivables and reducing customer credit risk. Prior to the pandemic, 50% of companies resorted to credit insurance, while today, that number has grown to over 80%1. For businesses looking to secure their cashflow it is essential that they optimise their credit and collections process and minimise customer risk. Even though it appears the worst is behind us, it’s impossible to know what 2021 and beyond have in store, so now is a good time to review your company’s credit and collections management practices and take them to the next level.
According to a recent PwC survey2 on the impact of the pandemic and the way businesses operate now and in the future, 78% of CEOs agree that remote collaboration is a lasting reality. Shifts towards remote working and automation are here to stay and implementing digital tools will help ensure business resilience. Digital infrastructure, flexible working and employee well-being will be top priorities as businesses reconfigure operations to secure growth in the next 12 months and beyond. Eric Maisonhaute MICM
22 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Credit Management
Here are 5 key strategies & tech tips to help you implement a best-in-class digital credit & collections process 1. Refine your credit policy Reviewing your credit and collections strategy is the first step to implementing a first-rate creditto-cash process. The basis of your process should be to make sure that your plan is in line with your needs and objectives, from creditgranting procedures to knowing how and when to begin collections proceedings. Your requirements may evolve over time, be it following a business expansion, merger or even an economic downturn, so it’s a good idea to regularly review the situation and adjust your policy as needed. A clear credit policy increases the efficiency of your credit management process and secures the entire credit-to-cash cycle, ensuring that all customers go through the same standardised process. Credit and collections decisions are regulated
“By sharing a defined credit policy with your order-tocash (O2C) teams, you ensure that all customer-facing stakeholders understand the company policies and convey the right message to customers.” and easier to make, enabling you to spend more time on complex scenarios. By sharing a defined credit policy with your order-to-cash (O2C) teams, you ensure that all customer-facing stakeholders understand the company policies and convey the right message to customers. Developing a coherent credit policy conveys a professional image, improves customer relationships and increases your chances of being paid on time. Key questions to ask: z What are the procedures for your customers when applying for credit? Are they standardised? How many customers slip through the cracks? z What criteria are used when
granting sales credit and how are terms adapted? z How often are customer credit terms reviewed? z Are the collections strategies well defined? Is your customer portfolio segmented? z How have write-offs evolved recently? What is the usual DSO? Tech tips: Î Have dedicated KPIs & dashboards: Get real-time insights into valuable AR metrics with dashboards and KPIs. Gain visibility to improve overall performance monitoring, better know your customers and review your credit policies (e.g., root cause analysis, reports on writeoffs, risky customers, etc.). ➤
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 23
Credit Management
“While customer-provided data is essential, we recommend that your new customer profile also include third-party information in order to obtain a more accurate view of the health of the business you are assessing.” Î Implement an Automation tool: Fully automate low-value tasks (e.g. sending email reminders) and streamline long and costly processes such as managing credit application workflows for new customers. This frees up your team to focus on complex scenarios and ensures timely follow-up, thereby optimising cashflow.
2. Know your customer Now that you have defined a comprehensive credit and collections policy that provides guidelines on decision-making for different customer types, you need to get to know your customer in order to accurately apply them. What better way to do that than collecting information directly from the customer? Customer onboarding is key to creating strong and successful customer relationships. Make sure to collect accurate and pertinent information to properly assess credit terms. A credit application form is a good way to centralise the necessary information, including: z Business information and profile z Products and services they intend to purchase from you z Potential references z Main contacts: AP for collections, invoice approvers, etc. z Any other relevant information needed to complete your assessment Be sure to also leverage the expertise of your sales team to complete the customer assessment, as they are the primary contact and often have valuable insights — such as recent or upcoming
acquisitions, large deals or product and marketing campaigns. These insights can prove useful when making credit decisions. While customer-provided data is essential, we recommend that your new customer profile also include third-party information in order to obtain a more accurate view of the health of the business you are assessing. Credit bureaus can provide reliable and up-to-date indicators on the applicant’s financial health and payment behaviour. Combining information from your customer with external data gives you a comprehensive overview of the applicant and allows you to make informed decisions that align with the current credit policies. Tech tips: Î Centralised data: A dedicated credit management tool centralises all pertinent customer information, including third-party credit data, through API integration with credit bureaus, giving you access to all the information you need in one single interface. This enables you to make informed decisions quickly and efficiently. Î Digital credit application forms: Customisable credit application templates allow you to thoroughly address different customer profiles or languages as well as automate the entire customer onboarding process.
3. Keep an eye on existing customers Once a credit assessment has been completed it is not set in stone. A regular review of all parameters needs to be done to adapt to changes in
24 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
situation – the customer’s as well as your own. A wide range of criteria can influence customer risk. Evaluating risk and customer behaviour is critical when selling on credit so that payment defaults can be avoided. Customer risk should be continuously monitored in order to implement the most up-to-date credit and collections processes throughout the entire customer relationship. Credit bureaus regularly provide updated information and help monitor the potential evolution of a customer’s risk. Additionally, you can also make use of customer data that has been collected internally to better assess their risk levels by examining payment behaviour history, credit limit utilisation and aging balance. The customer’s risk level can be accurately assessed and appropriate actions taken by combining both external and internal information sources. Obtaining an accurate picture of your customer’s financial situation and behaviour affects the quality of the entire O2C process. Tech tips: Î Predictive analysis: Anticipate customer behaviour with predictive analysis and proactively make appropriate decisions when it comes to collections processes. An AI-powered solution uses historical data to assess and monitor payment patterns, provide estimated payment dates, determine risk levels and prioritise calls accordingly. Î Automated alerts: Stay informed on credit risk evolution with customer alerts, which facilitate
Credit Management
monitoring and ensure that important information is not missed. Simplify the updating of credit and collections procedures.
4. Be flexible The last year has shown just how greatly businesses are impacted by unexpected events. In order to succeed and overcome fluctuating conditions, flexibility is key when it comes to credit and collections procedures. Standardising rules and guidelines will ensure functioning processes, flexibility and adaptability, allowing you to easily respond to a customer’s changed situation (e.g., solvency, risk, payment behaviours, etc.). Your credit and collections strategies need to be adapted accordingly. The longer you wait to turn an overdue invoice into cash, the higher the chances are of never getting paid. Foresight and adaptation are key to on-time payments. A reassessment of a customer’s risk evolution should be performed at frequent intervals. Best practice is to segment customers according to risk levels and payment practices prior to taking appropriate actions, such as proactive collections, blocking or unblocking orders or credit limit reviews, depending on the specific segment. Another best practice is targeted messaging for specific cases such as unreliable payers or customers with an aging balance beyond the set target. This type of segmentation will provide more efficient monitoring of existing customers and help in setting priorities for credit management and collections actions.
Tech tips: Î Root cause analysis: Get realtime insights about reasons for late payment and/or disputes and better understand what can potentially go wrong in the process in order to adjust accordingly. Î Automation tool: Automate your AR processes and be alerted when an unexpected event occurs (credit score changes or missed payments) so you can react quickly and keep risk under control. Î Secure cloud platform: Access information anytime, anywhere. Provide your team (whether working in the office or remotely) with enhanced flexibility to succeed when major organisational changes occur.
5. Break down the silos Often the teams involved in the process have access to different yet relevant customer information: A sales agreement can influence the customer’s payment behaviour, while erratic payment trends noted by the collections team affect the account manager. Facilitating communications between O2C teams encourages information sharing and ensures that all stakeholders have the right data at their disposal to make the best decisions at every step of the process. The collective vision and ultimate goal are to maximise sales while minimising cashflow risk. Beyond communications it is collaboration between teams that helps stakeholders make the most
relevant decisions throughout the customer journey. These decisions can affect the entire O2C team in the determination of credit limits, updates, order blocking/unblocking credit approvals and payment recovery. Although collaboration is key, it is often complicated in decentralised or global organisations with teams in different locations or working remotely. Nonetheless, improving collaboration and sharing information throughout the credit-to-cash process pay off by optimising overall efficiency and minimising credit risk while also enhancing the customer experience and ultimately increasing sales. Tech tips: Î Integrated platform: Centralise AR-related data to make relevant information accessible to all O2C stakeholders through an integrated platform. Manually gathering all relevant information and sharing it efficiently across O2C teams are time consuming and ineffective tasks. Î Collaboration tools: Enhance team communication and collaboration with digital tools such as dispute resolution, escalation management and approval workflows.
*Eric Maisonhaute MICM Director – Accounts Receivable Solutions Esker Australia Pty Ltd T: +61 2 8596 5126 E: eric.maisonhaute@esker.com.au www.esker.com.au
FOOTNOTES: 1
Atradius 2020 Payment Practices Barometers.
2
PwC CEO Panel survey. July 2020.
“Another best practice is targeted messaging for specific cases such as unreliable payers or customers with an aging balance beyond the set target. This type of segmentation will provide more efficient monitoring of existing customers and help in setting priorities for credit management and collections actions.” July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 25
Credit Management
Business owners are conserving cash, turning to non-bank lenders and planning to restructure Key takeaways from ScotPac’s latest SME research Small businesses may be quietly optimistic about revenue growth, but they do not yet have the confidence to invest back into their businesses. These are among the useful insights for credit managers, highlighted in the latest ScotPac SME Growth Index. By Jon Sutton*
Jon Sutton
Small business owners showed a clear reluctance to take on additional debt throughout 2020, and that sentiment is lingering as we’ve passed the halfway mark of 2021. Our fourteenth round of the twiceyearly ScotPac SME Growth Index paints a clear picture of the mindset of business owners around business investment, revenue outlook, funding options and cashflow issues. The SME Growth Index, Australia’s longest-running in-depth research on small business growth prospects, targets businesses with revenue up to $20m. This round, we found an undercurrent of optimism in the sixmonth revenue forecasts outlined by SMEs, although the rebound is uneven. Many businesses, depending on their sector and location, have come through the COVID-19 “one-in-100year crisis” feeling as though they dodged a bullet.
26 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Recovery strategies – many will restructure Two-thirds (64.6%) of SMEs plan to look at restructuring their business to find the best way forward, whether their focus is on pandemic recovery, or they are looking to take advantage of market opportunities. A large part of this restructuring focus is to investigate the best funding options. Of those SMEs who relied on government stimulus funding, one in five say they will replace stimulus funds by cutting costs and one in six will use a working capital finance facility. One in five businesses overall, and one in four larger SMEs, say they will have to downsize or move their head office. Other growth and recovery strategies include sourcing new funding (12.5%), entering new markets (8.9%) and pursuing merger and acquisition opportunities (5.1%). One in four SMEs say they are not sure which recovery measures to
Credit Management
instigate. The smaller the business, the more likely they are to be uncertain – almost one in three $1m-$5m revenue businesses are unsure, with one in five $5m-$20m enterprises in the same boat. While many businesses have been preoccupied by the end of JobKeeper, what could have a greater impact is that moment when the ATO gets tougher about chasing debt. This should be a point of focus for $1m-$5m revenue businesses, given they’ve indicated that making ATO arrangements will be one of their go-to working capital management strategies. To avoid running into cash flow issues, it’s imperative that SME owners look at funding methods beyond traditional bank funding and be diligent about getting in early to put adequate funding in place.
Pandemic led to new funding options Almost half the small businesses (46%) polled in the latest SME Growth Index introduced new funding options in 2020 to deal with pandemic recovery and growth opportunities. Only 54% of SMEs were able to get by using their existing style of funding. Small business owners outlined common reasons for using new funding options in 2020: — helping develop new products and services to diversify revenue base (31.4%) — buying new or replacement equipment or machinery (24.4%) — increasing their cash reserves (21%) — refinancing existing loans (20.3%) — because traditional bank funding was unable to meet their needs (15.5%) SMEs were asked to quantify how much of their working capital would be freed up for the business if they never had to wait for payment. On average, they would be able to access an extra 42.8% working capital. ➤
“The smaller the business, the more likely they are to be uncertain – almost one in three $1m-$5m revenue businesses are unsure, with one in five $5m-$20m enterprises in the same boat.” July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 27
Credit Management
For smaller SMEs (with $1m$5m revenue) not having to wait for payment would allow them access to an extra 31.4% in working capital. This working capital gap is even more remarkable for larger SMEs (those with $5m-$20m revenue) who say they would get an average 55.6% more working capital if they were paid immediately. Young and newly launched businesses (five years or under) are most likely to be feeling this cash flow crunch, as they have on average 58.8% of their working capital tied up in unpaid invoices. These statistics highlight the fact that it is common sense for businesses to consider invoice finance as a working capital solution, because invoice finance allows a business to access these outstanding payments without having to wait for customers to pay them. Many smart business owners are already on this path – the research found the second most popular way to fund new growth is via non-bank lenders (at a new high of 28.3%), surpassed only by business owners using their own funds (89.1%). Only 16.8% of SMEs plan to fund new growth via their main bank and 12.3% plan to rely on other banks. This percentage of SMEs relying on bank funding for new growth continues to trend downward in each round of the SME Growth Index.
Businesses have been conserving cash
“Only 16.8% of SMEs plan to fund new growth via their main bank and 12.3% plan to rely on other banks. This percentage of SMEs relying on bank funding for new growth continues to trend downward in each round of the SME Growth Index.” 28 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
A lot of small businesses held on to cash in 2020 and many are still staying on the sidelines when it comes to investing in their own growth. Over the past 12 months significantly more small businesses than usual said they were free from cash flow issues – 27.5%, compared to the 10% who usually report having no cash flow problems. This appears to highlight that COVID-19 stimulus measures had the
Credit Management
effect the Federal Government had hoped for. While in the short term this is a good outcome, in the longer term if businesses continue to conserve cash within their enterprises, and if they are not actively looking to invest to help their business grow, they run the risk of becoming less relevant in their market. Allowing these cash holdings to be strategically unlocked would bode well for forward investment, including job creation and revenue growth. It is worth pointing out almost three in four small businesses (72.5%) were still experiencing cash flow issues, despite the low interest rate environment and the extensive SME loan support options available. Government red tape and compliance issues remain the most pressing cash flow issue for SMEs. The dual issue of red tape and compliance (44.3%) was nominated by almost twice as many respondents as the two other top cash flow concerns, difficulty meeting tax payments on time (23.9%) and failed credit applications (22.9%). A further 16.5% of businesses struggled with cash flow when their credit lines were reduced, and 14.6% were unable to take on new work due to cash flow restrictions. These factors may have had the effect of prolonging the COVID-19 downturn for many small businesses. Common strategies for managing working capital include cash flow forecasting (the top response), making arrangements with the ATO and putting in place cash flow friendly funding such as invoice finance. Of concern is the response by more than one in 10 business owners that they will manage working capital by relying on personal finances such as credit cards. This confirms that many small businesses have ingrained credit accessibility issues, despite the deluge of COVID-19-related stimulus measures. ➤
“The dual issue of red tape and compliance (44.3%) was nominated by almost twice as many respondents as the two other top cash flow concerns, difficulty meeting tax payments on time (23.9%) and failed credit applications (22.9%).”
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 29
Credit Management
What’s the small business mindset? Confidence is crucial for ensuring the small business sector successfully recovers from the pandemic-led recession, yet the sector is still cautious. When asked how they felt about running their business now, compared to their feelings in early 2020 before the pandemic hit Australian shores, SMEs are slightly more likely to express negative sentiments than positive ones. Overall, 43.9% of small businesses say they are more positive, relieved or enthusiastic about 2021, while 55.3% are less positive, exasperated, uncertain or feel they are lacking support. Such a time of uncertainty would seem to be the right time for seeking expert advice, yet our research shows
that many small businesses appear to be going it alone. Fewer than one in five small businesses seek expert advice for long-term strategic planning. Not even one in seven seek M&A advice and only 10% get expert assistance with risk management. Overwhelmingly, when small businesses turn to trusted advisors it is for tax and compliance advice (nominated by 93.2% of respondents). Asset acquisition and disposals (34.1%) and succession planning (26.8%) are also key areas where SMEs look beyond their own team for guidance. Business owners must look beyond compliance and seek expert strategic and funding advice from their accountants, bookkeepers and brokers for the best chance at navigating the post-COVID-19 environment.
“Overall, 43.9% of small businesses say they are more positive, relieved or enthusiastic about 2021, while 55.3% are less positive, exasperated, uncertain or feel they are lacking support.” 30 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Green shoots for SME sector Almost half the 1253 business owners polled (48.4%) anticipated positive revenue growth through to August 2021. The average revenue growth forecast is 4.1%, an increase of eight points from H2 2020, reflecting a strong “bounce back” in confidence for many small business owners. The 685 small businesses planning to invest in their own growth represents a small but promising increase from late 2020, when only 650 SMEs were willing to invest. Despite these two positive signs, half the businesses polled were not yet confident enough to invest back into the business. Only half of the small businesses polled have NO plans to close or sell under current market conditions. One in three say they will have to sell (20%) or close (14.2%) unless conditions significantly improve. This is up from 31.2% in late 2020. Over recent years the Index has recorded a steadily rising proportion of SMEs forecasting their revenue to decline. This is cause for concern. The proportion of SMEs forecasting negative change was 24.7%, an increase from late 2020. While more small businesses are forecasting revenue decline it is some consolation that the average decline forecast has moved from -6.2% to -5.5% over the past six months. The SME Growth Index looks at six major industry sectors – mining, manufacturing, wholesale, retail, transport and business services. Even if business conditions don’t markedly improve, a vast majority of SME respondents in the mining, business services and transport sectors believe they could ride out current conditions without having to sell or close. This confidence was expressed by 85.6% of mining enterprises, 82.1% of business services SMEs and 72.3% of transport businesses.
Credit Management
“With business owners reluctant to invest in their own businesses, the fact is that working capital must be found somewhere, which is why almost half the small businesses introduced new funding options in 2020 to deal with pandemic recovery and growth opportunities.” In contrast, more than one in three retailers say they will close without conditions significantly improving, a similar proportion will sell and almost a quarter are unsure. Only 7.6% of retailers are confident they will not have to close or sell. Manufacturing is evenly poised: 36.6% are confident they can survive; 18.8% are looking at closing, 27.2% selling and 17.3% are unsure about riding out current conditions. A more robust 43.8% of wholesalers believe they can survive, with 13.3% expecting to close, 25.8% to sell and 17.2% unsure.
Securing working capital With business owners reluctant to invest in their own businesses, the fact
is that working capital must be found somewhere, which is why almost half the small businesses introduced new funding options in 2020 to deal with pandemic recovery and growth opportunities. Securing working capital is crucial, so it is promising – and necessary for recovery – to see this willingness to seek new styles of funding, including non-bank lending. We know from working with our SME clients across Australia and New Zealand, in a wide range of industries, that more working capital means more options within a business. One standout finding this round is that small businesses say if they never had to wait for payment they
would be able to access, on average, a phenomenal 42.8% additional working capital. This insight puts securing prompt payment times, along with funding options that maximise working capital, at the forefront of importance for the small business sector. SMEs and their advisers and credit managers are encouraged to download this free Business Funding Guide created by ASBFEO and ScotPac to outline styles of funding that might suit their business.
*Jon Sutton Chief Executive Officer E: suttonj@scotpac.com.au T: 1300 209 417
NCI, more than just trade credit insurance Leverage our information on more than 1 million businesses around Australia, and educate yours.
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July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 31
Credit Management
Future-proof your business with digital tools and integrated payments By Adrian Floate MICM*
Adrian Floate MICM
With measures such as the Federal Government’s JobKeeper Payment Scheme ending on 28 March 2021, a slight cooling in the country’s economy wouldn’t have been a surprise. However, that hasn’t been the case. The pace of Australia’s economic recovery coupled with consumer confidence may be of comfort for some, but it doesn’t mean businesses should shy away from innovative ways to future-proof and boost their cash flow. This is especially true when the unpredictability of COVID-19 can cause economic instability overnight. Many businesses have implemented digital strategies into their operations, and eCommerce has been booming since early-2020 with over 200,000 Australians placing their first online shopping order in April 2020 alone. Australia Post has also predicted that this year will be the
most digital Christmas yet. It delivered 52 million parcels in December 2020, and has since brought forward many of its investment plans for 2022 and 2023. Some of the company’s temporary facilities, for example, will now become permanent facilities due to the boom. Having the right digital systems and processes in place puts control over cash flow back in the right hands – suppliers and their loyal customers. While regulatory changes can help address late payments, digital technologies have the potential to transform Australia’s B2B payments landscape quickly and effectively.
Businesses have to get on top of their cash flow Cash flow is critical for businesses to survive and thrive. According to the Australian Bureau of Statistics (ABS), there’s been a slight boost in
“The pace of Australia’s economic recovery coupled with consumer confidence may be of comfort for some, but it doesn’t mean businesses should shy away from innovative ways to future-proof and boost their cash flow.”
32 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Credit Management
cash flow confidence amongst small businesses over the last few months. In February, over 40 per cent of small businesses said they were concerned about meeting their financial obligations over the next three months, compared to less than 20 per cent of businesses in March. While businesses are becoming more confident in their short-term cash flow prospects, late payments and outdated payment methods continue to plague Australia’s small businesses. Late payments are typically 11.2 days late, which can result in a business not getting paid for over a month if they operate on 30-day payment terms. This restricts a business’s ability to pay their suppliers. And when a business is barely managing to meet its ongoing financial commitments, there’s certainly not enough capital to think about investing in growth initiatives. Integrated payments will help
“While businesses are becoming more confident in their short-term cash flow prospects, late payments and outdated payment methods continue to plague Australia’s small businesses.” address Australia’s late payment problems across the entire supply chain.
The importance of integrated payments Integrated payments help businesses to accept a range of payment options, facilitate faster payments, automate payment acceptance, and automatically record transactions in their relevant finance and accounting systems – in real time. All of this is done while providing a secure environment for both parties in a transaction, and the need for manual data entry is also eliminated.
Automating and integrating business payment systems reduces the risk of human error and improves reconciliation and reporting accuracy. Businesses need this accuracy to meet their regular financial commitments, plan larger investments and be prepared to shift gears quickly if needed. Most importantly, integrated payments provide greater payment flexibility for the customer which significantly improves the chances of the supplier being paid on time, while allowing the customer to align their payments with their cash flow. ➤
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 33
Credit Management
The B2B trade finance cycle
1. Buyer sends supplier purchase order 2. Supplier accepts PO and sends statement with offer for extended payment terms with third party funder 3. Third party funder sets up direct debit agreement and repayment dates with buyer 4. Third party funder pays supplier 5. Supplier ships goods
“While businesses are becoming more confident in their short-term cash flow prospects, late payments and outdated payment methods continue to plague Australia’s small businesses.” B2B payment flexibility is here A range of payment options have been commonplace for B2C transactions for several years, but B2B transactions have lagged behind. And introducing similar flexibility through an integrated payments platform gives businesses the ability to offer flexible payment options to their business customers. B2B payment options that will strengthen cash flow across supply chains include the ability to pay business invoices using a credit card, access to thirdparty finance and buy now pay later (BNPL) options to help with credit management. Credit card payments effectively allow customers to add an extra month to their invoice payment
terms, depending on their credit card provider (which equates to standard invoice payment terms, plus the 30-day interest-free period on a credit card). Similarly, third-party finance and buy now pay later options allow business customers to split their invoices into smaller instalments. This helps businesses manage payments in line with their cash flow while shifting the financial risk from the supplier to the thirdparty finance provider. The assurance over cash flow that payment options provide allows the finance professionals within a business to streamline their workflow, which frees up time for more strategic work. Current payment models place responsibility on the payee to
34 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
identify themselves with an invoice or reference number when payment is made. But when an invoice is paid, not everyone remembers to identify themselves. Not only do outdated payment methods create a headache for finance professionals, but the process of manually reconciling transactions between the business’s accounts and accounting software is time consuming and left open to human error. An integrated payment system, however, automatically records payments in a business’s accounting software saving time and reducing the risk of data entry errors. In the long run, digitising payments will not only revolutionise the day-today operations of a business but, with more time for strategic work, finance professionals may find added fulfilment in their roles too.
Drive sales and liquidity across the supply chain Just as BNPL options attract consumers to a business, offering BNPL and trade finance for B2B
Credit Management
transactions can help a business drive sales. The early adopters in particular will differentiate themselves with better payment processes. Trade finance is an important tool for B2B transactions as it reduces the risk for both parties in relation to the supply and payment of goods, and helps to drive better efficiency and cash flow across the supply chain. The network effect possible if all of Australia’s businesses introduced an integrated payment platform to their business would mean all of the capital locked in late payments would flow freely throughout the economy. This would support the entire supply chain and make business systems faster,
easier and smarter, leaving business owners and leaders with the time and space to focus on what’s truly important — realising their vision.
Digitising your business is future-proofing your business Cash flow remains king for businesses. Digitising your business payments through integrated payment systems will not only unlock cash flow, but it has the potential to support the entire supply chain with tailored solutions for consumers, retailers, wholesalers and manufacturers. This is a game changer for businesses. Instead of a cycle of late payments amongst businesses being the norm,
suppliers will enjoy better visibility and control over their cash flow. Instead of the current late payment cycle in Australia, there’s the potential to flip this cycle into one where business payments and cash flows align. Those businesses that digitise their systems and processes now will boost their cash flow, support their supply chain and be in a position to thrive and invest in growth.
*Adrian Floate MICM CEO at Cirralto and Managing Director of Spenda E: adrian.floate@spenda.com.au T: 0412 377 877
“Instead of a cycle of late payments amongst businesses being the norm, suppliers will enjoy better visibility and control over their cash flow. Instead of the current late payment cycle in Australia, there’s the potential to flip this cycle into one where business payments and cash flows align.”
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 35
Credit Management
Good governance – what is all the fuss about? By Jody Wright*
Society’s expectations of firms and how they act continues to rise. The most recent statement from the regulators is Crown Inquiry Report Volume 2 Chapter 4.1. Following revelations made during the Financial Services Royal Commission, ASIC set up the Corporate Governance Taskforce to review the corporate governance practices in large listed entities: “In recent years, the level of scrutiny into matters of corporate governance across corporate Australia has intensified consequent upon events such as the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Financial Services Royal Commission) and investigations into the conduct of specific entities, such as into the CBA by the Australian Prudential Regulation Authority (APRA).” These types of Inquiries have resulted in an inordinate amount of focus by ASIC and other regulators on the conduct of management and senior executives in the financial services industry, particularly banks and insurance companies.
How did we get here and what does good governance look like?
Jody Wright
So why is this happening and is this trend about to expand to other industries and what does this mean
36 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
for boards and management level employees across Australia? To answer these questions, it is necessary to first look at the definition of “corporate governance’ and what “good governance” actually means. Corporate governance has included many definitions over the years and from the early day definition espoused by Justice Owen in the HIH Royal Commission Report, has developed into a detailed allencompassing definition involving the elements of control and accountability. The Governance Institute of Australia defines governance as “the system by which an organisation is controlled and operates and the mechanisms by which it, and its people are held to account. Ethics, risk management, compliance and administration are all elements of governance”. The question then becomes, what is good governance and it is this rapidly changing concept which is resulting in Inquiry after Inquiry, a shift in the focus of investigations and prosecutions by ASIC and other regulators and an increase in regulatory powers.
Change in expectations Companies need to be aware that a significant contributor to the ever changing concept of “good governance” is consumers. Public
Credit Management
expectations of how corporations should act significantly determines what rules should apply. Society exerts pressure on legislators and regulators to ensure that corporations are meeting the expectations of the public generally and this in turn leads to Inquiries, prosecutions, legislative changes and heavier regulation. Society also puts pressure on media to investigate the conduct of companies and their executives. It was information and documents leaked to media that lead to the allegations made against Crown Resorts Limited and the resultant Inquiry under Section 143 of the Casino Control Act 1992 (NSW). This Inquiry is another example of the expansion of regulators delving into the conduct of corporations and in turn their boards of directors and management teams and resulting in further regulatory intervention. Specifically, the report recommended the establishment of an Independent Casino Commission as an independent, dedicated, stand alone, specialist casino regulator to meet the extant and emerging risks for gaming and casinos.
What do the regulators think? Aside from the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, what amounts to good governance in the eyes of the regulators and society? The corporate regulators have over time made suggestions to assist corporations with some practical steps towards establishing good corporate governance. They have included: “effective communication; encouragement of debate and challenge; learning from past experiences; awareness and active stewardship of risk; clear escalation processes; and clear consequences for breaches of risk.” (ASIC). The elements of corporate governance include transparency, accountability, integrity and stewardship. Integrity involves maintaining a culture committed to ethical behaviour and compliance with the law. Commissioner Hayne during the Royal Banking Commission Enquiry also asked organisations to improve management of compliance risk, conduct risk, regulatory risk and operational risk. Conduct risk is
the risk of inappropriate, unethical or unlawful behaviour on the part of an organisation’s management or employees.
What does this mean? In practical terms for banks, insurance companies, financial service providers and all other corporate entities moving forwards it is important for companies to take a proactive approach when it comes to governance and risk management and to create a culture of ethics and corporate responsibility in all industry sectors. Really when it comes down to it all directors, executives and employees are responsible for their conduct and actions and in turn the way that consumers perceive the organisation’s brand.
*Jody Wright Head of Risk & Governance and Company Secretary Risk & Security Management This article has been produced by the writer and represents the views of the writer and Risk & Security Management. It is current at the time of publication but does not constitute legal advice and should not be relied upon as such. You should seek independent advice where necessary.
Practical tips to ensure your firm has good governance z Implement and maintain a robust compliance regime; z Implement and maintain a rigorous risk management framework which assesses, measures and treats all type of risks including
z Always consider the possibility that a consumer may be a “vulnerable customer” and as such take appropriate steps to determine whether the consumer may match the criteria; z Ensure that any third party suppliers, particularly
financial, operational, regulatory, reputational and
those who are representing your brand have
conduct risk;
similar frameworks and regimes in place and
z Training, open communication with all employees
promote a culture of good governance and ethics.
and continual improvement are essential. There is
The last thing that you want is for your brand
no point having policies and procedures without
to end up on the front page of the Australian
all representatives of the organisation living and
Financial Review in a bad news story because of
breathing those policies and procedures and
the conduct of a third party supplier; and.
having open communication about risks, issues and areas for improvement;
z Foster relationships of trust with all relevant stakeholders.
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 37
Credit Management
The place for legal action and enforcement in the post-COVID-19 world By Roger Mendelson*
Roger Mendelson
During the COVID-19 period (which is not fully over by any means), legal action was very largely placed on hold. Although there were no restrictions during the period from March 2020 until January 2021 on taking out legal action, there were difficulties if an action became defended and a general feeling by creditors of “let’s put this on hold”. Many creditors had a policy to not undertake any action which was likely to upset debtors or which may lead to adverse publicity. In the circumstances, I am unaware of any adverse publicity arising from legal action over the whole COVID-19 period. There were restrictions placed on issuing Statutory Demands and on Bankruptcy as an enforcement tool. Statutory Demands had a temporary increase in the amount owing from $2,000.00 to $20,000.00 and the time period for response by the company was increased from 21 days to 6 months. The bankruptcy minimum judgment amount was increased to $20,000.00 and the response time to respond after service of a Bankruptcy Notice was increased from 21 days to 6 months.
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Needless to say, few creditors undertook either of these options during the COVID-19 period. The restrictions were changed in January 2021. The bankruptcy minimum judgment amount is now $10,000.00 (including costs and interest up to the date of the judgment) and the response period after service of a Bankruptcy Notice has been returned to 21 days. Statutory Demands can now be issued for any amount owing by a company which is not subject to dispute of over $4,000.00 and the response period after service of the Statutory Demand is now 21 days. It is apparent from the bankruptcy and wind-up figures that numbers have dropped very substantially and have not caught up in any way to preCOVID-19 levels. This means that there is either a back log brewing or another more likely explanation, is that many creditors are simply shelving action on prior claims.
What is the future of legal action in credit and collections? There is no doubt that legal action is being used to a much lesser degree now than say 10, 20 or 30 years ago. Going back 30 years, legal action
Credit Management
details are confirmed and the job is permanent is over 90%. Again, the creditor which takes this action is the one likely to achieve a result, because most of the other creditors would not have gone to judgment and Garnishee.
Summary
was an essential tool of any collection system. Today, it is used much less widely. Part of the reason is that many credit managers are not fully aware of the benefits of legal action because they have grown up in a different environment. Legal action will in no way avoid the need for carrying out proper and careful credit checking. There is a strong argument that legal action is a significantly more effective debt collection tool now than it was in the past. The reason is that your customer is much less likely to be sued by other creditors. Thus, it is a question of the squeaky wheel gets the result because it stands out. If your customer knows that it is unlikely that most of his creditors will sue him, he will be less likely to pay. As long has he accepts that there will be a negative credit report listing, then he really knows that he can avoid paying. Thus, a creditor who does sue is more likely to achieve a positive outcome.
What are some of the benefits of legal action? A judgment adds between 12 and 15 years to the enforceable life of your debt (depending on the jurisdiction). Interest at high rates are added to the debt. For example, in Victoria, the prescribed rate under the Penalty Interest Rates Act is 10%. The taking out of a default judgment will automatically lead to a credit default being recorded. This will often lead to action, sometimes several years later, when your customer seeks finance or a lease and is required to satisfy the judgment at that stage. To satisfy the judgment, the customer will be required to pay the full amount of the judgment, plus interest plus costs.
Don’t overlook the easiest enforcement path of all If your customer has a reliable job, the easiest enforcement path in some states (example New South Wales) is Garnishee. In our experience, the success rate if the employment
There is a critical place for legal action in every debt collection system. The reality is that legal action will need to be undertaken in only a very small percentage of outstanding debts. The fact that your system allows for legal action to be undertaken will empower your collections system from the outset. That is, when telephone contact is made with the customer, he will be advised (politely of course) that unless he either pays the debt or enters into a meaningful instalment, it will cost him significantly more in legal costs and interest. Bankruptcy for larger debts owing by individuals, particularly if there is an asset involved, such as real estate, is a critical process. Without it, many otherwise collectable debts will be written off unnecessarily. I am constantly amazed at how many files we handle, where instalment options and lump sum offers are rejected and yet when there is a hearing date for the Bankruptcy application, significant sums can be found. The most overlooked tool is Statutory Demands. It is the only enforcement step which can be undertaken without firstly obtaining a judgment. It is quick and relatively inexpensive. If the company intends continuing in business, the directors really must deal with a Statutory Demand served on their company within 21 days.
*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
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 39
Credit Management
The importance of credit management/accounts receivable in your marketing program By Kim Radok MICM CCE*
How do you market the concept that you are prepared to protect your business’s assets and cashflow, without down grading the positive image of your business projected by your marketing and sales departments?
Introduction Image and perceptions mean everything in business. We currently live in an age where everything is visible and there is nowhere to hide our secrets. Despite all the current evidence supporting these facts, I rarely see signs that management is understanding this point. When it comes to marketing and sales, Australian management also appears to rarely, if ever, learn the lesson, “a sale is not a sale until the money is in their business’s bank account and for six months and one day after receipt.” I fear this lesson, unfortunately is about to be learnt in the coming months and years.
Kim Radok MICM CCE
One version of marketing reads something like: Marketing refers to activities a company undertakes to promote the selling of a product or service. Marketing includes advertising, selling, and offering products or services to consumers, (retail) or other businesses, (business-to-business). When it comes to marketing a business today, management must understand that image and perception cover the “whole of business experience.” Having just great products or services, simply is not enough. Your business also needs to know that every interaction “sells’ an image of the business and their representative(s), irrespective of whether that image/perception be good or bad. Likewise, customer service is no longer perceived as just involving selling. It encompasses the processes relating to every invoice raised, queried or unpaid. Therefore, the
“When it comes to marketing and sales, Australian management also appears to rarely, if ever, learn the lesson, “a sale is not a sale until the money is in their business’s bank account and for six months and one day after receipt.””
40 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Credit Management
“...customer service is no longer perceived as just involving selling. It encompasses the processes relating to every invoice raised, queried or unpaid. Therefore, the reality of what image means and is; also extends to your credit and accounts receivable departments.”
reality of what image means and is; also extends to your credit and accounts receivable departments. Consequently, the actions and behaviour of your credit/accounts receivable departments always has– and always will be of extreme importance. The following article draws on the information from a radio interview conducted by Business Essentials Daily titled Daily Digital V Personal Touch with Barry Urqhart. Barry Urqhart is an internationally recognised and respected conference keynote speaker, workshop facilitator, business strategist and consumer behaviour analyst. More details are available on his website http://www. marketingfocus.net.au.
Background When a business is started, creating a positive, efficient team environment is essential because this is what their customers will experience. In this organisational format, each area
and all employees are respected, accepted and trusted to exhibit their own professional skillsets, to enable a positive perception of the business as a whole. In a command and control model of years past the instructions were issued by the board/senior managers and then each team within the business was expected to deploy these instructions with little question/input. Today, regretfully, we still see too many organisations reveal this same hierarchal structure and thinking. Often credit and the significant investment a firm has in it’s receivables is overlooked and undervalued and in my opinion, are not receiving the attention they deserve. As a result, the value and ability they have to maximising the organisation’s results are compromised. The problem with this outdated historical version approach, (still evident today) is that when recession takes hold of the world, this
structure will not be sustainable. The fact is that we are going to see many such businesses follow those who have already become insolvent and closed down – due to broken link/s in the company’s infrastructure. Each department, from purchasing through to credit management have vital roles to play. When shared importance is not recognised, valued and respected, trouble is imminent.
Marketing, credit and accounts receivable in the future To start, here are three sets of questions and answers from Mr Urqhart’s interview. Q We know that good strong relationships are fundamental to business success and is imperative to build relationships across as many channels as possible, but could COVID-19 have put a dent on customers really feeling the love? A He says digital tools may have made it easier to buy from you, but they don’t cater much at all, ➤
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Credit Management
for the personal touch and that’s where business can lose out over time”. Q … “Whether COVID-19 has made it even more difficult to maintain those relationships?” A “Yes, it has been for one simple reason, relationships are about interaction. It’s about trust and empathy, understanding, caring and compassion. And when you are socially isolated you are removed from a lot of the emotional queues of relationships and relationships are built up on trust and communication and when communication is now being channelled by zoom, all of a sudden; zoom is zoom phobia. People can, click on, connect – but
where we lack – and this based on relationships – there’s little engagement.” Q … “And because of COVID-19, I mean there’s a big push these days, to go digital, not just with communications but with marketing, with customers, does that also have dangers? The marketing side”? A “It has profound implications and ramifications. There are consequences and I think this is the point. As you go onto social media, it seems to be that the relationships, and there’s the key word, are more transactional.” It is the above information which shows us that the principles of good
“The problem with digital engagements is that it is as cold blooded as some of the people who operate their business, only focusing on an upfront – dollar and – cents basis.”
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business are always best conducted with the personal touch, even in this digital age. Whilst Mr Urqhart’s focus has been on the selling and consumer engagement interaction, the same principles apply in credit, accounts receivable, and yes, even in debt collection. The problem with digital engagements is that it is as cold blooded as some of the people who operate their business, only focusing on an upfront – dollar and – cents basis. The value of the human component in business is marginalised or eliminated altogether. As a result, a business created with a focus on digital technology and using “cheaper” resources, loses many valuable sales and efficiency opportunities. It’s also worth remembering Captain Solley’s statement after landing his commercial aeroplane with hundreds of passengers on the Hudson River. He articulated
Credit Management
that technology doesn’t remove problems; it just changes the nature of them. As an example, many credit and accounts receivable professionals would also add, a dysfunctional customer’s e-billing platform, not supported by properly trained and motivated employees, is a costly nightmare when following up unpaid invoices. For an example of a strong focus on digital processes verses the employment of people, you need look no further than your bank. Their general approach fails to understand the marketing effect and the negative image received by their customers. Therefore, all banks these days seem to be a clone from the other. The reality is, as bank customers often cannot see any real difference, they change from one, to another, based on their perceptions of the least-worst experience.
The B2B business relationship In the case of B2B credit, the supplier which projects the best level of service and interaction with their customers, often has the best sales, cashflow and profit returns. Workplace evidence suggests that if customers find it is easy working with their supplier’s credit/accounts people and processes, they are more inclined to be equally cooperative. You only have to ask your customer(s) as I have over the years “Why aren’t you buying as much as you use to as in the past?” I suspect you will find as I have done, often it comes down to a lack of customer service and an increase in problems with invoices. The creditor which does not project a positive image of enforcing their rights, or customer service, has the opposite image problem. The reason for this, is the supplier projects an image where cashflow is not important and organisational incompetence is the norm. In the
“I’m continually amazed, at the offhand manner which many business owners provide credit to customers they know little about, and/or don’t maintain a close eye on their existing customers.” harsh real world of business, there is no other conclusion. I’m continually amazed, at the offhand manner which many business owners provide credit to customers they know little about, and/or don’t maintain a close eye on their existing customers. Their mindset must be, “We can’t afford to upset or lose this valued customer, so process the order and everything will work out.” Even businesses with a good track-record of paying can pass-on their misfortune and 60-days overdue invoices can quickly turn into 90 or 120 days overdue. This effect amounts to a huge cash flow issue for the supplier and more unprofitable work for their employees. Companies which are slow in delivery are perceived as inefficient, and as such, respect for them is diminished. Companies, which don’t manage their accounts well, suffer the same fate; and are perceived to be weak. As a consequence, they are taken advantage of and/or relegated to the bottom of payment priorities list. Referring to the suppler, there are businesses which promote the concept of “champion sales people” who receive the accolades and rewards. Meanwhile, the rest of the employees who complete and secure the transaction, are often overlooked, or are deemed of a lesser value to the business. Rather than enhancing a team environment, a “them and us” culture and division develops in the organisation. Then, it’s all too easy for unscrupulous and fraudulent customers to play one-side-againstthe-other, and strong business disciplines erode.
It is a fact, that humans “… respect discipline and take advantage of kindness.” We see this fact in everyday life. However, it is often ignored in the business setting. The following example provides an indication of how this truth is often ignored. A customer goes whinging to the supplier’s salespeople that they are on stop-supply, then the salespeople complain to management. Their beef is that credit/accounts are stopping them selling to a “good customer”. The management team who’s focused on sales and not on cashflow and profits, will often agree with their sales team and force credit/accounts to release the order for the “good of the business.” (Hoping it’ll all work out). Too late, management finds that the “good” customer is 90-120 days overdue, or leave their business with a bad debt. The animosity between sales, management and credit increases – further destroying any hope of a positive team environment.
Marketing your business in a recession The views of many credit management, risk, debt collectors and insolvency professionals, amongst others, is that we are in a recession and the situation is going to get worse. There are contrary views to this point of view, which are usually put forward by commentators with a vested interest in downplaying the negative consequences when a recession is declared. When we review what is happening in the business community, again we receive mixed feedback. ➤
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Credit Management
“The views of many credit management, risk, debt collectors and insolvency professionals, amongst others, is that we are in a recession and the situation is going to get worse.” A number of businesses are doing really well, whilst others are in despair. It is this mixture of experiences, which sums up the fact that business continues in a recession with both positive and negative outcomes. For the businesses struggling to survive and come out in a positive position at the end of the recession to enjoy the good times again, there are a number of problems. First there is a matter of maintaining the basic needs of the business available to survive, e.g. sales, positive cashflow, profits and reputational integrity. The next major problem is to manage the status of the business’s suppliers and customers. If either are affected negatively as the recession proceeds, then this limits the chances of your business surviving. Next major problem, is how the marketplace, your customers and suppliers perceive your business. This is where understanding the concepts of marketing your business as a solid and responsible entity, comes in to play. As mentioned earlier, your public image is established on a whole of business experience. This image is noted, especially by your customers, by how well various groups of employees all work together. Previously I illustrated one example of the complaining customer using sales to obtain product and services against the advice of credit or accounts receivable employees. Another example is where sales do not pass on information to the credit or accounts team because it may affect sales performance, or causes them extra work. The customer is then aggrieved because
In conclusion
When it comes to marketing and sales, Australian management also appears to rarely, if ever, learn the lesson, “a sale is not a sale until the money is in their business’s bank account and for six months and one day after receipt.” I fear this lesson, unfortunately is about to be learnt in the coming months and years One version of marketing reads something like: Marketing refers to activities a company undertakes to promote the selling of a product or service. Marketing includes advertising, selling, and offering products or services to consumers, (retail) or other businesses, (business-to-business). When it comes to marketing a business in today’s environment, management must realise and value that image and perceptions cover the “whole of business experience.” Having just great products or services, simply is not enough. Your business also needs to know that every interaction “sells’ an image of the business and their representative(s), irrespective of whether that image/perception be good or bad. Space in this article, does not permit me the opportunity to explain further how to create a positive whole of marketing experience. However, I am always available for a discussion on the subject.
Image and perceptions mean everything in business. We now live in an age where everything is visible and there is nowhere to hide our secrets. Despite all the current evidence supporting these facts, I rarely see signs that management is understanding this point.
*Kim Radok MICM CCE Founder and owner Credit Matters E: kim@creditmatters.com.au T: 03 9886 6707 M: 0411 649 261 www.creditmatters.com.au
their message or enquiry was not passed on and resolved, whilst the credit or accounts employees are upset because their work value is compromised. When customers receive mixed messages, this potentially motivates them to take actions detrimental to your business’s success. This then is not just poor customer service. It also becomes a marketing problem by negating the marketing department’s work of promoting the positive values of your business. Promoting a point of difference on the whole of business experience when the two examples mentioned in this article are present, promotes a negative image of the business compared to your competitors. There are many actions your business can take to create a whole of business positive image for marketing purposes. What will be surprising to a number of management teams and business owners, is that these positive actions are no more costly than the losses they currently suffer.
“Image and perceptions mean everything in business. We now live in an age where everything is visible and there is nowhere to hide our secrets.”
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Credit Management
From crisis to opportunity:
the future of B2B trade and credit management By Mark Hoppe*
Mark Hoppe
As we start to see the light after a tumultuous period of uncertainty, businesses are beginning to turn their attention to growth. These are the risks and opportunities CFOs and credit managers need to pay attention too.
of late payments more efficiently and will also facilitate company growth by helping businesses explore new opportunities including extending more credit to existing customers and new customers and finding new markets to explore.
Pandemic invoice write offs have more than doubled
Tariffs continue to disrupt supply chains, so how are businesses managing budgets?
The Atradius Payment Practices Barometer survey has revealed that an increase in the use of credit has led to a rise in write offs and overdue invoices with 5% of all credit sales written off as uncollectable more than doubling the 2% average recorded prior to the pandemic. The same story applies to late payments, 54% of business invoices are overdue (compared to 21% in the prepandemic year). As the customer credit risk environment becomes more challenging with more businesses selling on credit, the insolvency environment is likely to increase. A write off rate of 5% represents significant loss. As businesses look to grow during this time of economic uncertainty, it’s important they continue to employ strategic credit management measures such as credit insurance to minimise the risk of payment defaults. This will help protect businesses from the increased risk of customer bankruptcy, help them manage the additional volume
Atradius recently held a worldwide virtual event on The impact of trade relationships and tariffs on global trade and 43% of event survey respondents said tariffs had a slightly negative effect on their business. A further 42% of these business went on to alter their approach to budget planning, mainly reducing discretionary spending like travel and training, reducing capital expenditure and increasing the price of their products or services to counteract the tariff costs. One of the key drivers of the trend towards de-globalisation is protectionism and we expect trade relationships and tariffs to continue delivering shocks to businesses around the world. So the only thing that is certain is that uncertainty will continue. To reduce disruption and continue growing many businesses are looking to diversify supply chains and take advantage of the opportunities this can present to enter new markets and find new buyers. ➤
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Credit Management
Businesses and markets who cannot match the speed of sustainability may be at risk Governments are increasingly adopting climate change measures and consumers are both demanding and buying greener products. This trend was discussed in a white paper by Atradius on How COVID‑19 changed global trade forever. It’s an area businesses need to be thinking about, if not already, as it’s likely we’ll see trade facilitation in exporting depend on this in order to reduce our carbon footprint. The B20 Group, the business voice of the G20, is discussing the idea that businesses have to work together and take responsibility for inequality and climate change. Governments and businesses have to collaborate and invest in technology in order to move into a more sustainable way of working. In addition, businesses are increasingly scrutinising their supply chains, and choosing to partner with suppliers that can provide better social and climate sustainability. Businesses and markets that do not have the agility to match the speed of the sustainable agenda may be at risk. For example, Japan is currently highly reliant on fossil fuels and is at risk of losing trade opportunities with large companies who are prepared to relocate in order to reduce their carbon footprints.
Digitalisation is changing the way we trust (and trade) Information that shows a business, sector, or market is experiencing difficulties and could result in payment defaults is invaluable when it comes to assessing risk and taking decisions on whether to offer credit and, if credit is to be granted, on what terms. Credit management is already benefiting from automation, machine learning and artificial intelligence and will continue to grow in importance. Quantum computing, and new forms of massive data processing in real
“Credit management is already benefiting from automation, machine learning and artificial intelligence and will continue to grow in importance.” time will also be huge according to the panel at a recent Atradius event on The impact of digitalisation on trade which you can watch on demand. The expert panel said we’ll be able to simulate fast and cheap versions of the world we’re in, and be able to track every aspect of a supply chain using sensors and connected networks at every step. These trends are already evident in freightforwarding start-ups who are building software systems that automate processes such as bills of lading and technology such as Robotic Process Automation, which is software designed to automate repetitive back-office digital tasks normally performed by people. The panel also talked about how important trust is in this accelerated digital world we now find ourselves in. The power of digital trust has swung from the brand to the consumer. Businesses need to understand in real time what customers are thinking about your company, and how to connect experience data with operational data to create products, services and content that is meaningful. Businesses that do not actively engage with their customers online risk developing a “passive profile”, a profile that is almost always negative. The
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reason for this is that consumers are more likely to complain when standards have not been met, than they are to praise when standards have been. And the reality is that people will trust a strangers review online which can hurt your business growth. The key to navigating and growing in this difficult economic environment is agility. An agile CFO or Credit Manager will continue to be across three key areas – the macro economic environment so you have information at hand when making decisions about importing or exporting. The dynamic of your own market and your products or services followed by assessing the credit risks of your customers. Knowing everything about the customer is something you need to do on an ongoing basis not just at the beginning. Partnering with a credit insurance company like Atradius can help you manage credit risks, gain key insights and outsource the debt collection process, saving you time and providing you with valuable knowledge to continue to grow by taking smart risks. *Mark Hoppe Managing Director Atradius Oceania Tel: (02) 9201 5222 www.atradius.com.au
Insolvency
Shining a spotlight on Australia’s bankruptcy laws By Emma Mos*
COVID-19 has led to some of the most significant changes to insolvency laws that Australia has ever seen, and it’s not just corporate insolvency legislation that the federal government has made changes to – protection measures have also been applied to personal insolvency. In this article, we look at the temporary – and permanent – protection measures that have been applied, the discussion paper around further changes to the Bankruptcy Act, and we take a deeper look at the proposed one-year bankruptcy period. In March 2020, the federal government introduced a number of temporary measures in response to the COVID-19 pandemic and the associated economic impacts. These temporary measures included: 1. The debt threshold for creditors to apply for a Bankruptcy Notice against a debtor increased from $5000 to $20,000. 2. The timeframe for a debtor to respond to a Bankruptcy Notice before a creditor could commence bankruptcy proceedings increased from 21 days to up to six months. 3. The temporary protection period available for debtors to prevent recovery action by unsecured creditors increased from 21 days to six months. The temporary measures were initially scheduled to cease on September
24, 2020 but were extended until December 31, 2020. And on January 1 this year, the bankruptcy threshold permanently changed to $10,000, doubling the pre-pandemic threshold of $5,000, while the amount of time to respond to a Bankruptcy Notice and the period of temporary debt protection both reverted back to 21 days. However, the ending of the temporary measures was not the end of the matter. In January this year, the federal Attorney-General’s Department released a discussion paper entitled The Bankruptcy system and the impacts of coronavirus. The aim was to seek stakeholder submissions on possible changes to the personal insolvency system – The Bankruptcy Act 1966 – to inform the government’s ongoing response to address the impacts of the pandemic. There are four key areas of the Bankruptcy Act under review: 1. The default period of bankruptcy being reduced from three to one year. 2. Debt agreements (regulated under Part IX of the Bankruptcy Act which offer an alternative to bankruptcy to debtors, provided certain threshold requirements are met). 3. Personal insolvency agreements. Also known as a Part X, a personal insolvency agreement (PIA) is a legally binding agreement ➤
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 47
Insolvency
between a debtor and their creditors and can be a flexible way to come to an arrangement to settle debts without becoming bankrupt. 4. Offence provisions. The abuse of the personal insolvency system to avoid paying debts is a concern that is frequently raised by stakeholders. And while illegal phoenix activity is generally associated with corporate insolvency, similar behaviour in the personal insolvency system by debtors as well as their advisers is also a key concern. The Bankruptcy Act contains offences, including offences punishable by imprisonment.
Let’s take a closer look at the one-year bankruptcy period. Is it a good idea or a bad one? One-year bankruptcies have been widely discussed previously and were last proposed in December 2015, when the government introduced legislation to reduce the default bankruptcy period from three years down to just one year. The aim was to reduce the stigma associated with bankruptcy, encourage entrepreneurs to re-engage in business sooner and encourage people – previously deterred by punitive bankruptcy laws – to pursue their own business ventures. While there was extensive public consultation on the proposal, widespread Emma Mos industry discussion
“One-year bankruptcies have been widely discussed previously and were last proposed in December 2015, when the government introduced legislation to reduce the default bankruptcy period from three years down to just one year.” and legislation drafted to make the change, the Bankruptcy Amendment (Enterprise Incentives) Bill 2017 was introduced to Parliament on October 19, 2017 but was never passed and lapsed with the calling of the 2019 federal election. However, it appears that this is now back on the table as a result of the pandemic. While John Winter, CEO of the Australian Restructuring and Turnaround Association (ARITA) expects the government to reintroduce the one-year bankruptcy “for an interim period”, Chartered Accountants Australia and New Zealand (CA ANZ) has urged the government to abandon its plans, arguing that it’s a knee-jerk reaction to a possible increase in personal insolvencies as a result of the pandemic. In its submission to the AttorneyGeneral’s Department, CA ANZ stated that the current economic circumstances shouldn’t be a trigger for change, but rather that “any change to the bankruptcy system
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should be based on the merits of that change, not on the economic landscape at a given point in time”. “Reducing the default period to one year will damage the integrity of the financial system with bankruptcy becoming a more attractive option, be misused to defeat creditors and make credit harder to access for all,” CAANZ said. CAANZ isn’t the only one with doubts about changing the discharge period to one year. In its submission, the Personal Insolvency Professionals Association (PIPA) stated: “While there may be merit in setting a default period of one year for bankruptcy in certain circumstances, it is important to note that many of the consequences of bankruptcy will extend beyond the one-year timeframe and these consequences impact severely on sole traders’ and business partnerships’ ability to continue to trade. “We are not convinced that setting a one-year bankruptcy default period will stimulate business. The personal insolvency system already
Insolvency
has a remedy that, with some key adjustments, could achieve the outcome desired by the Government: this is a debt agreement,” PIPA stated. While views on the merits or otherwise of the reduced bankruptcy period are mixed within the industry, many believe that the one-year discharge period could be good for first-time, good-faith bankruptcies – but that it should also mean the administration of the estate concludes at that time or soon after. “The shorter period would enable bankrupts to ‘fail fast’ and move forward, and it would enable Trustees to wind up the matter quickly, which could also be better for creditors,” said my colleague Chris Baskerville, QLD Partner and Bankruptcy Trustee. It’s something that Jimmy Trpcevski, who heads our Perth division, WA Insolvency Solutions, agrees with. “The shorter discharge period would allow those individuals to move on more quickly with their lives, whether they’re an employee, business owner, or director,” Jimmy said. “As the economic climate has changed, there is a greater level of understanding as to the reasons why someone goes down this road. Awareness of the options and the education by the advisers and experienced practitioners gives comfort to individuals. I also believe many people would understand the mental health benefits and relief of moving on sooner.”
Will the shorter discharge period reduce the stigma? Not according to CAANZ, which believes that reducing the default period to one year will do little to reduce the stigma for those who are declared bankrupt. It notes that the record of bankruptcy or a personal insolvency agreement is held in perpetuity on the National Personal Insolvency Index (NPII) and believes that public records on the NPII should be aligned with the period that a
“...if the government does decide to introduce the one-year bankruptcy, there needs to be specific criteria for it to work effectively and prevent people abusing the regime.” record is kept on a debtor’s credit file to reduce the stigma of bankruptcy. Jimmy Trpcevski says that “everyone’s situation is different”. “The belief that there is stigma associated with Bankruptcy is more of a myth than a reality. Bankruptcies occur for a number of reasons, such as falling property prices, family disputes, marriage disputes, not getting paid for work done, or shortfalls on financed equipment. The reasons why people declare bankruptcy have evolved over time – and these days most people know someone who has gone through a bankruptcy, whereas previously, it was an anomaly.” And my colleague Malcolm Howell, also a seasoned Bankruptcy Trustee based in Victoria, says there’s not a “one size fits all solution”. While he believes the one-year bankruptcy will be good for some individuals, he also says it’s important to have the option of extending the bankruptcy beyond one year for certain circumstances – for example: — where the Bankruptcy Trustee suspects there’s fraudulent activity by the bankrupt. — where there has been noncompliance with a Trustee’s written directions or failure to disclose property, income or a liability. — where the bankrupt has provided the Trustee with false information about their affairs or has failed to provide the Trustee with information when requested. And he believes that for ‘repeat offenders’, the discharge period should also automatically be extended beyond one year, which would help deter personal insolvency phoenixing. What most agree on, is that if the government does decide to introduce
the one-year bankruptcy, there needs to be specific criteria for it to work effectively and prevent people abusing the regime.
The current lay of the land While the debate continues and we wait for the government to release its findings and recommendations in response to the discussion paper, the number of personal insolvency appointments have fallen significantly. The government’s protection measures, not to mention stimulus measures and the ATO deferring debt recovery action, have been key drivers in Australia not experiencing the once much discussed “insolvency tsunami”. There was a slight increase (0.9%) in the proportion of people entering a new personal insolvency in capital cities in the March 2021 quarter compared to the previous quarter. New personal insolvencies rose 7.2% in capital cities representing 61.1% of the national total in the March quarter, while outside of capital cities they rose 3.4%. And while we are expecting the levels of personal – and corporate – insolvency to remain low for the rest of 2021, as the ATO ramps up its debt collection and household debt starts to rise, many are expecting insolvencies to increase to historically average levels. With predictions that the numbers of personal insolvencies will rise, it’s more important than ever for individuals to take timely advice from a qualified expert. *Emma Mos Principal, Jirsch Sutherland T: 1300 547 724 E: emmam@jirschsutherland.com.au
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Insolvency
Full Federal Court smokes the peak indebtedness rule in Gunns decision! How the latest Gunns decision creates a fundamental shift in the calculation of unfair preferences claims and what this means in practical terms for trade creditors. By James Devonish FICM CCE and Alida Chan MICM*
James Devonish FICM CCE
On 10 May 2021, the Full Court of the Federal Court handed down its decision in Badenoch Integrated Logging Pty Ltd v Bryant, in the matter of Gunns Limited (in liq) (receivers and managers appointed) [2021] FCAFC 64 (Gunns). The decision is significant to future and current unfair preference claims, particularly for its implication that liquidators are unable to utilise the peak indebtedness rule when examining a continuing business relationship embodied in a single transaction under section 588FA(3) of the Corporations Act 2001 (Cth) (Act).
What this means…
Alida Chan MICM
Pursuant to the Act, a liquidator of a company may claw back payments it made to a creditor in the period beginning six months prior to the relation-back day (“relation-back period”).1 There are a number of elements that the liquidator must prove to succeed with the claim, including: that the payments were
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made when the company was insolvent; that they were made in respect of an unsecured debt; and, that the creditor was preferred by the payments over other unsecured creditors. However, for the purpose of determining the unfair preference amount, when the payments form part of a series of transactions made in the course of a continuing business relationship and the company’s net indebtedness to the creditor is increased and reduced from time to time as a result of these transactions, then section 588FA(3) of the Act requires the various transactions to be considered as one single transaction. Prior to Gunns, where a continuing business relationship was evident and so as to maximise the amount of the single transaction, liquidators could apply the peak indebtedness rule and choose the starting point of the single transaction in the relation-back period as being the company’s
Insolvency
peak indebtedness to the creditor. In Gunns, the Full Federal Court deemed the peak indebtedness rule as unsound in principle. A Liquidator must take into account all transactions made, while a continuous business relationship exists, in the relation-back period. Importantly, the Gunns decision also made some important and useful observations as to when a continuous business relationship applies during the relation-back period.
Post-decision effects – hypothetical analysis In the below hypothetical set of potential preference payments during a relation back period, the effect of: 1. a continuing business relationship being found during the entire relation-back period and the application of the peak indebtedness rule (as during the pre-Gunns period) would mean that the creditor’s liability is
“...the Gunns decision also made some important and useful observations as to when a continuous business relationship applies during the relation-back period.” the peak account debt amount ($95,000.00) minus the closing balance ($22,000.00), being $73,000.00; and 2. a continuing business relationship being found during the entire relation-back period in the post-Gunns period will mean that the creditor’s liability is the account start balance ($14,000.00) minus the closing balance ($22,000.00), being -$8,000.00. Therefore, in this post-Gunns hypothetical analysis, there is no unfair preference claimable.
Background to the decision The liquidators of Gunns Limited (in
liquidation)(receivers and managers appointed) were appointed on 25 September 2012 and sought to recoup a total of 11 payments made by the company during the relation-back period, 26 March 2012 to 25 September 2012, to Badenoch Integrated Logging Pty Ltd (Badenoch). The liquidators claimed the payments were unfair preference payments and voidable under section 588FE of the Act. At first instance, in Bryant, in the matter of Gunns Limited (in liq) (receivers and managers appointed) v Badenoch Integrated Logging Pty Ltd [2020] FCA 713, the primary judge in the Federal Court found only two of the payments were ➤
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Insolvency
“Prior to Gunns, where a continuing business relationship was evident and so as to maximise the amount of the single transaction, liquidators could apply the peak indebtedness rule and choose the starting point of the single transaction in the relation-back period as being the company’s peak indebtedness to the creditor.”
an integral part of a continuing business relationship as the rest were made when the company and Badenoch were looking backwards rather than forwards. That is, looking more to reduce old debt rather than supply future transport services under the commercial relationship. The effect of the primary judge’s findings was that the single transaction constituted the period 17 April 2012 to 30 June 2012 only. The primary judge further relied upon the cases of Rees v Bank of New South Wales [1964] HCA 47 and
Olifent v Australian Wine Industries Pty Ltd (1996) 130 FLR 195 (Olifent) to find that the liquidators were entitled to apply the peak indebtedness rule to claim that the single transaction was an unfair preference. Accordingly, the nine individual payments made outside the period 17 April 2012 to 30 June 2012 could be impugned as individual preferences, whereas the two payments made within that 17 April 2012 to 30 June 2012 period fell to be considered as part of a single transaction under section 588FA(3) of the Act.
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Gunns – the Full Court decision An appeal and cross-appeal from the aforementioned decision was subsequently made and the Full Court of the Federal Court, constituted by Justices Middleton, Charlesworth and Jackson, had to decide, among other things, whether the transactions formed part of a continuing business relationship and whether the peak indebtedness rule applied. As to the first issue, the Court noted the following applicable principles for the purpose of determining whether a payment
Insolvency
was part of a continuous business relationship: z the payment must be made in circumstances where there is a mutual assumption of a continuing business relationship of debtor and creditor, with an expectation that further debits and credits will be recorded; z it will usually be relevant to consider a statement of account in determining whether, from a business point of view, each particular payment was connected with the subsequent provision of goods or services; z where the relationship contemplates further debits and credits, the application of a payment to a past debt is not unusual and has no significance unless the parties agree that one of the purposes of the payment is to permanently reduce the level of indebtedness below the level existing at the time of the agreement; z knowledge of insolvency, suspicion of insolvency, or reasonable grounds to suspect insolvency will not necessarily destroy a continuing business relationship; z a stop on an account will not necessarily destroy a continuing business relationship; z the continuing business relationship does not need to exist for the entirety of the relation-back period; and z the existence of a continuous business relationship is a question of substance, not form.
Importantly, the Full Court observed that the mutual assumption of a continuing business relationship will not necessarily cease whenever the purpose of a payment tips slightly in favour of recovering past indebtedness over securing future supply, such as where a creditor insists on payment of an ordinary invoice before continuing supply on terms. On the issue of whether the peak indebtedness rule applied, the Justices agreed with the comments made by the New Zealand Court of Appeal in Timberworld Ltd v Levin [2015] NZCA 111 in relation to an equivalent New Zealand provision, being that the effect of the section taken on its face is to require all payments and transactions within the continuing business relationship to be netted off against one another. The Justices also found that it was the intention of the Parliament to allow creditors to have the benefit of earlier dealings within a continuing business relationship. In arriving to this conclusion, reference was made to the fact that the peak indebtedness rule was not referred to in the Explanatory Memorandum to the insertion of section 588FA(3) into the 1989 Act and that support for the peak indebtedness rule was not evident in Petagna Nominees Pty Ltd & Anor v AE Ledger (1989) 1 ACSR 547 or Queensland Bacon v Rees [1966] HCA 21 (cases specifically referenced in the Explanatory Memorandum). Ultimately, it was held that Olifent and subsequent decisions were wrongly decided because: z there was no legislative intention
to adopt the peak indebtedness rule when introducing the provision into the 1989 Act; moreover, section 588FA(3) is an expression of the ultimate effect doctrine which recognises that a company’s creditors are not disadvantaged by payments made to induce trade creditors to supply goods of equal or greater value; and z the elimination of the peak indebtedness rule is consistent with the stated purpose of Pt 5.7B of the Act, which is to do fairness between unsecured creditors.
Concluding comments This decision is a positive outcome for trade creditors facing unfair preference claims and, in the authors’ humble opinion, gives an interpretation of section 588FA(3) of the Act which is consistent with its purpose.
*James Devonish FICM CCE Managing Director Oakbridge Lawyers E: jdevonish@oakbridgelawyers.com.au Direct: 08 8418 1410 *Alida Chan MICM Associate Oakbridge Lawyers E: achan@oakbridgelawyers.com.au Direct: 07 3181 5632
FOOTNOTES: 1 The relation-back day is often the date the liquidator was appointed to the company, but it can be earlier, if the company was in administration or had wind up proceedings on foot, prior to being placed into liquidation. Accordingly, the relationback period is often six months, but it can be longer.
“... the Full Court observed that the mutual assumption of a continuing business relationship will not necessarily cease whenever the purpose of a payment tips slightly in favour of recovering past indebtedness over securing future supply, such as where a creditor insists on payment of an ordinary invoice before continuing supply on terms.” July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 53
Insolvency
A review of the key issues of winding up a Corporate Trustee for the benefit of creditors By Alan Izra MICM*
Alan Izra MICM
A. INTRODUCTORY COMMENTS 1.
The High Court’s decision in Carter Holt Wood products Australia Pty Ltd v The Commonwealth [2019] HCA 20 (‘Amerind’) has been discussed in the previous AICM Magazine. 2. In summary, the High Court in the Amerind held that – a. Section 433 of the Corporations Act 2001 (‘the CA’) applies on the receivership of a trustee company in the exercise of the trustee company’s right of exoneration; b. The statutory scheme of priority applies to distribution of the relevant trust property, being here the receivership surplus subject to the trustee’s right of indemnity; and c. Trust assets may only be used to pay trust creditors on exercise of the power of exoneration in a receivership or in the liquidation of a trustee company, but not non-trust creditors. 3. Notwithstanding Amerind’s decision, other matters remain unanswered in the winding up of corporate trustees. This article summarises the main issues and principles concerning the liquidation of corporate trustees.
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B. KEY ISSUES ON APPOINTMENT 4. It is common that a trust deed will provide that the trustee is removed on liquidation of the company. In the circumstances, the corporate trustee becomes a bare trustee of the trust assets. Accordingly, the company’s obligations, powers and rights are limited to protecting the trust assets and do not include the power to deal with the trust assets. 5. In such instances, it is usual for liquidators to apply to Court for orders to1 – a. Confirm the liquidators’ power to deal with trust assets; or b. Appoint a receiver over the trust assets. 6. By virtue of paragraph 5 above, liquidators are encouraged to review the conditions of the trust deed to establish whether the company in liquidation is or will be removed as trustee on appointment.
Amending the trust deed 7. In order to avoid the removal of a company as trustee of a trust on a liquidator’s appointment, one option is to amend (i.e to remove ejectment clause) the trust deed before the automatic removal of a company as trustee of a trust. 8. The above option has been
Insolvency
specifically discouraged by the Courts and accordingly, should not be adopted. The Courts established that an attempt to alter the trust deed were for the benefit of creditors, not the beneficiaries of the trust.2 The ideal method is for the liquidator to apply to Court for seeking directions to allow them to deal and/or sell trust assets. 9. In the decision of Brimson Pty Ltd (in Liq)3 (‘Brimson’), the Federal Court delivers beneficial direction in circumstances where the corporate trustee ceases to be the trustee upon becoming insolvent. 10. Brimson highlights the need to approach the Court before the liquidator is able to realise the assets of the trust to meet the company’s liabilities. The decision is one of the first since the handing down of the High Court’s findings in Amerind concerning the nature
of the right of exoneration and the limit of what it can be used to indemnify.
Background – Brimson 11. The case relates to the liquidation of three companies that, as trustees of three trading trusts, ran three franchises. Mr and Mrs Brimfield were the ultimate beneficial owners of the franchises, and structured their business to run through three trustee companies. 12. On 22 May 2019, the franchisor issued breach notices to each of the three companies in relation to breaches of their franchise agreements. Shortly after this on 28 May, a liquidator was appointed to each company under a creditors voluntary winding up pursuant to s.491 of the CA. 13. Under the terms of the trust deeds, clauses operated to remove
the respective corporate entities as trustees upon the companies having liquidators appointed. This meant that the liquidator, while having power over the companies, did not have power concerning the trusts (or their assets). 14. Due to the operation of the automatic removal of a company upon liquidation, from the date of appointment of the liquidators, the companies themselves were removed as trustees and had no power to deal with the trust property. This means that the trust creditors did not benefit from the trust assets to pay any outstanding invoices. 15. As a consequence, the liquidator applied to the Court seeking the power to act as the receiver of the respective trusts and realise their assets to pay trust creditors. 16. The application was fairly straightforward in terms of how ➤
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Insolvency
the law applied to the Brimson scenario. The Court recognised that – a. Where a corporate trustee enters liquidation, because the right of indemnity is an equitable lien, it persists despite the company having been removed as trustee. b. it was now settled law that the liquidator of a former corporate trustee cannot sell trust property without an order of the Court, or by appointment as the receiver over the trust’s assets. 17. The rationale behind this restriction confirms Amerind in that while the equitable lien is property of the company, it is merely a right of exoneration through the equitable lien. Therefore, the trust property itself cannot be regarded as property of the company. 18. The Court also made it clear that the proceeds from the realisation of the trust’s assets may only be used to satisfy the liabilities of the company that relate to the trust, and not the general debts of the trustee company unrelated to the trust. 19. Further to the above, two other recent decisions of the Federal Court have affirmed the need for a liquidator of a corporate trustee to apply for a Court order either extending the scope of the liquidator’s power of sale, or appointing the liquidator as the receiver of the trust’s assets, in seeking to exercise the trustee’s right of exoneration over the trust assets.4
The types of right of indemnity under a trust deed 20. It is well known that there are two types of trustees’ rights of indemnity – the right of recoupment and the right of exoneration. Both arise after the trustee incurs a debt on the trust’s
“The right of recoupment arises where the trustee incurred a liability and then paid the liability from its own assets. The trustee then seeks reimbursement under its indemnity.” behalf, and becomes personally liable for payment of that trust debt. 21. The right of indemnity is a beneficial interest in the trust provided for under a trust deed which passes to the appointed liquidator. 22. The right of recoupment arises where the trustee incurred a liability and then paid the liability from its own assets. The trustee then seeks reimbursement under its indemnity. 23. The right of exoneration differs and will more often be relevant in insolvency (where trust debts remain unpaid). The right of exoneration is: a) where the trustee has incurred the liability; b) The liability remains unpaid; c) The trustee takes trust property out of the trust to satisfy the debt pursuant to its indemnity. 24. In Amerind, the High Court was divided as to whether the ‘property’ accessible for the purposes of distribution and priority in the insolvency of corporate trustee was constituted by – a. The corporate right of exoneration against trust assets for debts properly incurred in its capacity as trustee. b. The trust assets themselves in which the trustee had a beneficial interest through its right of exoneration. 25. A liquidator appointed to a corporate trustee will normally be subrogated to the corporate trustee’s right of indemnity and therefore, able to use the trust assets to pay trust creditors.5
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Power of sale 26. It is well known that a liquidator has the power to sell or dispose of ‘property’ of the company under s.477(2)(c) of the CA. 27. Previous cases have considered the question of whether a liquidator can exercise a power of sale of trust asset under s.477 of the CA and the nature of ‘property’. If the corporate trustee remains as trustee on appointment, the liquidator retains the power of sale of the trust assets, either under– a. express provisions of the trust instrument; or b. state or territory trust legislation that provides trustees with express powers of sale. 28. However, in the event the corporate trustee is removed as trustee on liquidation, the position is ambiguous. 29. On one hand, the liquidator has the power to sell trust assets under s.477 of the CA on the basis that the company retains legal title in those assets and also an equitable interest in those assets via the right of indemnity.6 30. On the other hand, the liquidator has no power of sale of trust assets under s.477 of the CA on the basis that the trust assets are not property of the company, as opposed to the right of indemnity against trust assets, which is property of the company.7 31. The above authorities state that the company’s indemnity is secured by an equitable lien over trust assets. However, while the company holds legal title in those assets, it does not hold
Insolvency
any beneficial interest in them. By virtue of s.477 of the CA, the liquidator has no greater interest in trust property than the company has. 32. Other cases have established that the liquidator, acting through the company as bare trustee, has the power of sale of trust assets under specific provisions of particular state trust legislation.8
C. PROCEEDS OF TRUST ASSETS 33. Assuming that a liquidator has obtained the power to sell trust assets by Court order, then proceeds of sale must then be distributed appropriately (to trust creditors). 34. It is well known that a nontrustee companies in liquidation, the statutory priority regime in ss556 and 560-562 of the CA expressly applies. However, there is no specific and dedicated statutory regime that applied to the distribution of assets of a corporate trustee in liquidation. 35. In the circumstances, it is necessary to consider the statutory priority regime under the CA and the general principles of trust law. 36. The authorities that considered the dealing of trust assets where the trustee company is in liquidation (while not entirely settled) provide the following – a. Trust assets are generally available to meet – ii. Debts paid personally by the trustee and liabilities properly incurred by the trustee in the execution of the trust (trust creditors)9 – only if the company has a right of indemnity against trust assets; and iii. Once trust creditor’s claim is satisfied, beneficiaries’ claim.10 b. In the event that the corporate trustee is in liquidation, the
statutory priority regime applies to distribute the proceeds of sale of trust assets between trust creditors, so that the liquidator is required to pay certain priority trust creditors (Eg. Employee entitlements) ahead of other trust creditors. c. Trust assets are not accessible to general (non-trust) creditors of the insolvent corporate trustee.12 37. It remains uncertain in what way trust assets are to be distributed if the insolvent company acted as trustee of another trust (where one trust creditor has access to more than one pool of assets – doctrine of marshalling).
D. THE ASSISTANCE OF THE COURT BY SEEKING ITS DIRECTION 38. If the liquidator is unclear about their powers and/or obligations to deal with trust assets, the main course remains to apply to Court for directions. Namely – a. An order for the appointment of liquidator as receiver in respect of the trust assets; b. Guidance to authorise the liquidator to deal with, and exercise power of sale of trust assets; c. An order for appointment of a new trustee under the relevant state trustee legislation; and d. Accidentally selling trust assets in the absence of any power to do so;
E. CONCLUDING REMARKS 39. It is important for credit managers to ensure that their Company’s Application for Credit Account adequately identifies the corporate trustee (by listing the name and ABN of the trust) and their security has been registered correctly against the trust and the corporation. 40. This paper highlights that where a creditor is a trust creditor, it
may benefit from a wind up of a corporate trust in accordance with the statutory priority regime set out in the CA. 41. Members of a Committee of Inspections are encouraged to understand the basic principles highlighted in this paper (Amerind and subsequent authorities) to sufficiently represent the interests of creditors in a winding up of a corporate trust. 42. Expert legal advice should to be sought before creditor/liquidators apply to Court seeking directions and guidance on how to best address such claims.
*Alan Izra MICM Lawyer McMahon Fearnley Lawyers
FOOTNOTES: 1 Re Suncoast Restoration Pty Ltd (in liq) [2003] FCA 355 (Re Suncoast at [14,[27] and [48]; Bruton Holdings Pty Ltd (in liq) v Federal Commissioner of Taxation [2011] FCAFC 79 (Bruton) at [21]. 2 Gembook Investments Pty Ltd (in liq) [2019] FCA 1143; Caneland Holdings Pty Ltd (in liq) [2019] FCA 1144. 3 [2019] FCA 1023. 4 See Triumph N Triumph Pty Ltd (in liq) (No 2) [2021] FCA 405 and Scope Plastics Pty Ltd (in liq) [2021] FCA 437. 5 Re Killarnee, applied in Ross v Manpack Holdings Pty Ltd [2018] FCA 548. 6 Apostolu v VA Coporation AUST Pty Ltd (2010) 77 ACSR 74; (Barnet), in the matter of Fulkoto Pty Ltd (in liq) [2013] FCA 595. 7 Re Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17. See also Re Suncoast at [14],[27] and [48]; Bruton at [21] and Re Killarnee at FCR [85]-[92]. 8 For example, in Queensland and Western Australia. See Fulkoto; South West Kitchens. 9 Amerind at [25] and [28]. 10 Amerind at [80]-[83]. 11 Amerind at [29]. Affirming Re Suco Gold; Killarnee. 12 See Amerind. DISCLAIMER: All material contained in this paper is written by way of general comment. No material should be accepted as authoritative advice and any reader wishing to act upon material contained in this paper should first consult McMahon Fearnley Lawyers Pty Ltd for properly considered professional advice, which takes into account specific solutions.
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 57
Legal
Caveats revisited
– how can they assist a creditor in recovering debts? By Georgina Wu MICM*
What is a caveat? A caveat is a warning recorded on the title of land giving notice of one’s unregistered interest in the land. It also acts as a statutory injunction preventing the registration of plans and dealings against the title of the land.
Caveatable interest One must have a caveatable interest, that is, a legal or equitable interest in the land in order to register a caveat. Caveatable interest may be created contractually. It is quite common for commercial credit applications and personal guarantees to include a charging clause entitling the supplier/ creditor to register a caveat against any real property owned by the debtor/guarantor to secure payment of the trade debt. An example of a basic charging clause is: X charges all of X’s interests in all land owned by X including any land X obtains an interest in after the date of this agreement to secure the payment of all moneys owing by X to Y. By virtue of the charging clause, the supplier becomes a secured creditor.
Tasmania, Northern Territory and the Australian Capital Territory, caveats are still registered on paper.
Lapsing caveats Each state and territory has separate rules and legislation governing caveats. In Queensland and Northern Territory, caveats are divided into two categories: non-lapsing caveats and lapsing caveats. Examples of nonlapsing caveats are caveats registered by the owner of the land and caveats registered with the consent of the owner of the land. Non-lapsing caveats do not automatically lapse. Lapsing caveats are caveats that are not non-lapsing caveats. Most caveats registered by a supplier pursuant to a charging clause under a commercial credit application or personal guarantee would be a lapsing caveat. Lapsing caveats will automatically lapse after three months from the date of lodgement unless notification is provided to the relevant Registrar General that court proceedings claiming an interest in the land has been commenced. Caveats registered in New South Wales, Victoria, South Australia, Western Australia, the Australian Capital Territory and Tasmania do not automatically lapse.
How are caveats registered?
Georgina Wu MICM
Caveats are registered electronically through an electronic lodgement network known as PEXA in New South Wales, Victoria, Queensland, South Australia and Western Australia. In
58 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Caveator’s ability to sell Subject to its construction, a typical charging clause contained in a credit application or personal guarantee would give rise to an equitable charge.
Legal
court considers in the exercise of its discretion to order a judicial sale5: z Whether there is any dispute that there has been a default and moneys are owing z Whether any registered mortgagee objects to the sale z Any potential obstruction of the judicial sale (such as ability to obtain vacant possession of the land) z The interests of achieving a just, quick and cheap resolution of real issues in dispute z Proportionality of costs When an equitable chargee undertakes a judicial sale of the charged property, it is under the same duties as a mortgagee exercising a mortgagee’s power of sale6.
“One must have a caveatable interest, that is, a legal or equitable interest in the land in order to register a caveat. Caveatable interest may be created contractually.” The example charging clause provided earlier would give rise to an equitable charge. An equitable chargee is entitled to seek the Court’s assistance to have the charged property sold to pay the debt and for a receiver to be appointed 1. It is said in Porter & Anor v Bonarrigo & Anor (VSC 2009) that: ‘an equitable charge is created when property is expressly or constructively made liable to the discharge of a debt or some other obligation and the charge confers on the chargee a right of realisation by judicial process, such as an order for sale: Swiss Bank Corp v Lloyds Bank Ltd; Re Cosslett (Contractors) Ltd. For example, an agreement that a person may place a caveat on another’s title has been held to constitute a charge. In Re
Cosslett (Contractors) Millett LJ held: It is of the essence of a charge that a particular asset or class of assets is appropriated to the satisfaction of a debt ... so that the chargee is entitled to look to the asset and its proceeds for the discharge of the liability.” 2 Unlike a mortgagee, the ability to sell the charged property by an equitable chargee may only be obtained through the court. The power of a court to order a judicial sale of the charged property arises from the court’s inherent equitable jurisdiction and it is discretionary3. It is also open to the court to make an order for possession as an ancillary order for the judicial sale4. The following are some of the matters that the
Implications Charging clauses are useful tools for creditors. When properly drafted, charging clauses give rise to caveatable interests and equitable charges entitling creditors to register a caveat and upon default of payment the caveator may seek a judicial sale of the charged property to pay the debt. Creditors also become secured creditors and may stand outside of an insolvency administration of the debtor. *Georgina Wu MICM Special Counsel TurksLegal T: +612 8257 5786 M: 0401 819 362 E: Georgina.Wu@turkslegal.com.au
FOOTNOTES: 1 Edward I Sykes and Sally Walker, The Law of Securities (LawBook Co, 5th ed 1993) 198, cited in Mathieson Nominees v Aero Developments & Ors (VSC 2016)at [79]. 2 Cited in Mathieson Nominees v Aero Developments & Ors (VSC 2016) at [71] 3 Morris Finance Ltd v Free [2017] NSWSC 1417 4 Morris Finance Ltd v Free (NSWSC 2017), [124] 5 Morris Finance v Free (NSWSC 2017), [116] – [117] 6 Morris Finance Ltd v Free (NSWSC 2017) 1417
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 59
Legal
Hedging your bets How to ensure your statutory demand has been properly served By Phoebe Pitt MICM and Mark Wenn MICM*
Phoebe Pitt MICM
Properly used, a creditors statutory demand pursuant to s459E of the Corporations Act 2001 (Cth) (CA) can result in orders for the winding up of a debtor company, and an order that the creditor’s costs of the winding up be paid out of the debtor company in liquidation with priority ahead of other creditors. A recent Federal Court case again highlights the complexity for creditors in the proper use of statutory demands, particularly as regards service. In the age of “working from home” and virtual offices, where administration protocols for mail dispatch may be less sophisticated, this case is a further timely reminder of the need for rigor around the effective use of statutory demands.
Facts In Intelogent Pty Limited v Onthego Group Pty Limited [2021] FCA 257, a creditor’s application to wind up the respondent (Onthego) under s459P CA was dismissed on the basis that – due to irregularities in service and the invocation of the effective informal service rule – the statutory demand
Mark Wenn MICM
and its supporting affidavit had been served in time. Onthego is a purely online sporting apparel company, to which the creditor (Intelogent) provided IT services. Intelogent issued the demand in respect of two invoices totalling approximately $25,000. Shortly before the demand was prepared, Onthego had vacated its registered office (a fact known to Intelogent) and was working from the mezzanine floor (Mezzanine) at its operations factory (Factory), a fact also known to Intelogent. Onthego gave evidence, which the Court accepted, that its office did not comprise the entirety of the Factory, but solely the Mezzanine. The relevant director, Mr Spencer, sometimes worked from his office on the Mezzanine but also often worked from his home office in Canberra. Intelogent sent the demand by prepaid express post on 3 February 2021, not to the address at which it was then registered with ASIC, but to the Factory (importantly, though, not to the Mezzanine). Onthego claimed that the affidavit did not come to Mr
“In the age of “working from home” and virtual offices ... this case is a further timely reminder of the need for rigor around the effective use of statutory demands.”
60 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Legal
Spencer’s attention until 10 February 2021, when he opened the envelope which had been left on his desk in his office on the Mezzanine. It was not in contention as between the parties that Onthego paid the demanded amount in full on 1 March 2021. The crucial issue was whether the statutory demand was served on or before 8 February 2021, the latest date allowable for the 21 day compliance period for the demand to have expired, and thereby giving rise to an act of insolvency that is the typical foundation for a subsequent winding up application. Intelogent submitted that the demanded amount was paid out of time and the winding up application ought to proceed, a matter resisted by Onthego.
Interplay between legislative requirements S109X CA provides that a document may be served on a company by leaving it at, or posting it to, the company’s registered office (s109X(1) (a)), being the address registered with ASIC. Subsection 1(b) provides for personal service on a director.
“S28A of the Acts Interpretation Act 1901 (Cth) (AIA) provides that – unless a contrary intention appears – a document may be served by leaving it at, or sending it by pre-paid post to, the head office, a registered office or a principal office of the company.” S28A of the Acts Interpretation Act 1901 (Cth) (AIA) provides that – unless a contrary intention appears – a document may be served by leaving it at, or sending it by pre-paid post to, the head office, a registered office or a principal office of the company. In turn, s29 AIA provides that unless a contrary intention is proven, service shall be deemed to be effected by properly addressing, prepaying and posting the document as a letter (and unless provided otherwise, effected at the time the letter would ordinarily be delivered; according to section 160 of the Evidence Act 1995 (Cth) (EA), the seventh working day after having being posted). The Federal Court has consistently
held since 2001 that s109X CA is intended to be “facultative and permissive only”, and that service in accordance with s28A AIA may be valid. Absent compliance with those provisions, a document may be informally served; such service being effected as at the time that the particular mode of service brought the document to the actual attention of a responsible officer (the onus of proof being borne by the party seeking to invoke the rule).
Court’s consideration Intelogent submitted that, as it was aware that Onthego had moved its physical office to the Factory, it ➤
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 61
Legal
addressed the demand to the Factory as Onthego’s head office in effecting service under s28A AIA. Her Honour Justice Farrell noted: 1. “[S]trict proof of service and the timing of service is required. The Court will not lightly draw inferences or make assumptions as to the timing of service”; 2. It may be an abuse of process for a creditor to serve a statutory demand at a registered office at a time the creditor knows it is unoccupied, although any potential abuse may be cured by a separate email notification; 3. The express post envelope was not addressed to Onthego’s recorded registered office (Onthego having vacated that address) or otherwise personally served on Mr Spencer or the other director, and so s109X CA was not enlivened; 4. The express post envelope was not addressed to Onthego specifically at the office on the Mezzanine (being the relevant office). Accordingly, the AIA was not engaged and s160 EA had no operation; 5. Inexplicably and extraordinarily – given both Onthego and Intelogent were internet-based companies, Intelogent itself being an IT service provider – Intelogent did not email the demand to Mr Spencer; The express post envelope and its contents actually came to the attention of Mr Spencer on 10 February 2021, and were informally served when he found it on his desk in an office on the Mezzanine level. The 21 day period (for the purpose of s459F
and in turn s459Q CA) started to run from that date. The demand having been found to have come to the attention of the debtor on 10 February 2021 meant that Onthego properly satisfied the requirements of the statutory demand by making payment of the full amount within the 21 day period of compliance, on 1 March 2021. The winding up application was accordingly dismissed with costs.
Key takeaways 1. Service is the most critical determinant to the question of not only whether a debtor company has complied with a statutory demand, but whether a creditor has standing (by reason of the existence of an act of insolvency) to issue a winding up application against a debtor company. A party should not rely upon the ASIC records as to the registered address if it is known to the creditor that the company has vacated that address, should undertake proper preliminary investigations, and always consider whether it would be prudent to personally serve a director with the demand; 2. Increased prevalence of work from home arrangements without the systems and procedures for effective mail management and dispatch, make it even more important to consider using informal service of demands in tandem with ordinary post, by emailing the demand to the director, and using ‘read receipts’
to assist in proving that the demand came to the director’s attention. As is clear from the judgment of Sifris J in In the Matter of Kornucopia Pty Ltd (No 1) [2019] VSC 756, it is incumbent upon the debtor company to adduce proof of non-delivery; with non-receipt being distinct and separate from non-delivery, and generally insufficient to displace the relevant presumption; 3. In commencing a winding up application in the event of noncompliance with a statutory demand which has been served using multiple methods, a creditor should be cautious to wait until the 21-day period of each separate method has expired (noting the relevant EA requirements) where questions exist in relation to effective service using ordinary post thereby minimising the scope for a dismissal on the basis of an irregularity in calculating the time under s459F(2)(b) CA; and 4. Finally, only consider taking advice from solicitors who practise this area as technicalities around the formal requirements of the demand, and its service, can easily trip up inexperienced practitioners.
*Phoebe Pitt MICM Special Counsel Mills Oakley T: (03) 9605 0931 E: ppitt@millsoakley.com.au *Mark Wenn MICM Partner Mills Oakley T: (03) 9605 0913 E: mwenn@millsoakley.com.au
“Service is the most critical determinant to the question of not only whether a debtor company has complied with a statutory demand, but whether a creditor has standing (by reason of the existence of an act of insolvency) to issue a winding up application against a debtor company.” 62 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
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DIVISION REPORT
Member anniversaries We recognise those members who achieved membership anniversaries between April and June 2021. Congratulations to these members on achieving such important milestones. Name
Designation
State
Company
Pin Years
Malcolm
Pickles
LICM
WA
Retired
60
John
Morris
LICM
WA
Retired
55
Michael
Devine
LICM
NSW
Retired
45
Robert
Taylor
MICM CCE
NSW
Ovato Pty Ltd
35
Clive
Sanders
MICM
WA
Hanson Construction Materials Pty Ltd
35
Anthony
Irvine-Smith
MICM
NSW
Brother International (Aust) Pty Ltd
30
Gerald
Barnes
MICM
NSW
Within Terms Consulting Pty Ltd
30
Michael
Mann
MICM
TAS
Department of State Growth
30
Emanuel
Ilardi
MICM
VIC
Kathleen
Hill
MICM
VIC
Mainfreight Pty Ltd
30
Lou
Caldararo
LICM CCE
VIC
IMCD
30
Rosanna
Taylor
MICM
VIC
Bunnings Group Limited
30
Stuart
Reid
MICM
NT
Rodgers Reidy
25
Anthony
Mackwell
FICM
VIC
Victorian Managed Insurance Authority
25
Dennis
West
MICM
VIC
Rip Curl Australia
25
Michelle
Baillie
MICM
SA
Contemporary Office Solutions Pty Ltd
20
Linda
Croft
MICM
WA
SRG GLOBAL
20
Therese
Pearce
MICM
WA
Stratco (WA) Pty Ltd
20
Julie
Payne
MICM
NSW
Catholic Schools Office Broken Bay Diocese
15
Doug
Ventham
MICM
QLD
Workpac Pty Ltd
15
Andrew
Wood
MICM
VIC
Puma Australia Pty Ltd
15
Carolyn
Dyson
MICM
VIC
Jacquelina
Thompson
MICM
VIC
Craig
Willard
MICM
Fiona
Reynolds
Kim
30
15 Bluescope Distribution Pty Ltd
15
NSW
Baiada Poultry Pty Ltd
10
MICM
NSW
TurksLegal
10
Moreland
MICM
NSW
Coates Hire
10
Mark
Russell
MICM
NSW
illion
10
Navnita
Reddy
MICM
NSW
Coates Hire
10
Robert
Fitzgerald
MICM
NSW
Tech2
10
Tony
Leo
MICM
NSW
TPG Telecom
10
Carly
Rae-Orth
MICM CCE
QLD
Fisher & Paykel Australia Pty Ltd
10
Col
Bingham
MICM
QLD
Cleanaway
10
Antonio
Di Fiore
MICM
SA
Maree
Kairl
MICM
SA
NCI (Brokers) Pty Ltd
10
Bart
van Riel
MICM
VIC
DuluxGroup Limited
10
Daniel
Sutherland
MICM CCE
VIC
Ian
Teague
MICM
VIC
Pentair Water Australia Pty Ltd
10
Melissa
Mann
MICM
VIC
Visy Industries
10
Michael
Jacobs
MICM
VIC
TurksLegal
10
Peter
Millidonis
MICM
VIC
Cummins South Pacific Pty Ltd
10
64
CREDIT MANAGEMENT IN AUSTRALIA • July 2021
10
10
Member anniversaries Designation
State
Company
Pin Years
Hussein
MICM CCE
VIC
illion
10
Waruni
Unantenne
MICM
VIC
NOV Australia Pty Ltd
10
Wayne
Dean
MICM
VIC
Phillips Ormonde Fitzpatrick
10
Trevor
Greenhill
MICM
WA
Cloud Collections Pty Ltd
10
Abraham
Dower
MICM
NSW
Swift Recovery Australia Pty Ltd
5
Alana
Buckley
MICM
NSW
Transurban Limited
5
Alex
Clark
MICM
NSW
Aravanis
5
Alicia
Seargeant
MICM
NSW
SR Law
5
Amanda
Mallia
MICM
NSW
SR Law
5
Archana
Venkatesh
MICM CCE
NSW
Lindt & Sprungli (Australia) Pty Ltd
5
Arpan
Baxi
MICM
NSW
Veolia Environmental Services
5
Christina
Lecuna
MICM
NSW
Pfizer Australia
5
David
Jovanov
MICM
NSW
ARMA Group
5
Harjaan
Sekhon
MICM
NSW
LG Electronics Australia Pty Ltd
5
John
Fairgray
MICM
NSW
BBW Lawyers
5
Karol
Tello Alvardo
MICM
NSW
Transurban Limited
5
Katrin
Tange
MICM
NSW
Transurban Limited
5
Kelly
Ngai
MICM
NSW
Equifax
5
Kire
Markovski
MICM
NSW
Australian Temporary Fencing Pty Ltd
5
Louise
Thomas
MICM
NSW
Fujitsu General (Aust) Pty Limited
5
Luis
Ormazabal
MICM
NSW
BBW Lawyers
5
Michelle
Sy
MICM
NSW
Transurban Limited
5
Monique
Schmitz
MICM
NSW
SR Law
5
Narelle
Williams
MICM
NSW
DHL Express Australia
5
Nedeljka
Canak
MICM
NSW
Transurban Limited
5
Neil
Shilbury
MICM
NSW
Paul
Lysaght
MICM
NSW
Law In Order Pty Ltd
5
Rachel
McKinnon
MICM
NSW
Transurban Limited
5
Tanya
Vermeij
MICM
NSW
DHL Express Australia
5
Terri-Ann
Whiting
MICM
NSW
Americold Logistics
5
Terry
Ledlin
MICM
NSW
Ledlin Lawyers
5
Theresa
McLean
MICM
NSW
DHL Express Australia
5
Valerie
McMahon
MICM
NSW
Americold Logistics
5
Vicki
Pereyra
MICM
NSW
Arash
Najafi
MICM
QLD
DHL Express Australia
5
Debbie
Clayton
MICM
QLD
Finance One
5
Delia
Human
MICM
QLD
University of Queensland
5
Dwayne
Bungay
MICM
QLD
Transurban Limited
5
Fiona
Burfield
MICM
QLD
Finance One
5
Jonathan
Lillis
MICM
QLD
DHL Express Australia
5
Julie
McHarg
MICM
QLD
Tradelink Plumbing Supplies
5
Kacey Leigh Sinardi
MICM
QLD
Finance One
5
Leanne
MICM
QLD
Tradelink Pty Ltd
5
Healy
DIVISION REPORT
Name Sherif
5
5
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA
65
DIVISION REPORT
Member anniversaries Name
Designation
State
Company
Leroy
Neilson
MICM
QLD
Linda
Ridsdale
MICM CCE
QLD
Maureen
Greaves
MICM
QLD
Our Online Services
5
Samantha
Camerlengo
MICM
QLD
Collection House Limited
5
Samantha
Pearce
MICM
QLD
Puma Energy (Australia) Bitumen
5
Sarah
Batzloff
MICM
QLD
DHL Express Australia
5
Talitha
Bere
MICM
QLD
ERM Power
5
Tina
Keenan
MICM
QLD
Hanson Construction Materials
5
Vanessa
Hendey
MICM
QLD
ERM Power
5
Andrew
Butterworth
MICM
SA
Elders Rural Services Australia Limited
5
Angela
Bemi
MICM
SA
Elders Rural Services Australia Limited
5
Georgina
Thorp
MICM
SA
Elders Rural Services Australia Limited
5
Jamie
Boal
MICM
SA
CCC Financial Solutions Group
5
Jason
Heidt
MICM
SA
BRI Ferrier
5
Nancy
Duong
MICM
SA
CCC Financial Solutions Group
5
Nick
Christpoulos
MICM
SA
Pernod Ricard Winemakers Pty Ltd
5
Rob
Maslin
MICM
SA
Elders Rural Services Australia Limited
5
Stuart
Otway
MICM
SA
SV Partners
5
Stuart
Starr
MICM
SA
SV Partners
5
Tammy
Foster
MICM
SA
Elders Rural Services Australia Limited
5
Travis
Olsen
MICM
SA
SV Partners
5
Anne
Yates
MICM
VIC
Complete Credit Management Services Pty Ltd
5
Anthony
Lee
MICM
VIC
Visy Board Pty Ltd
5
Cristiana
Ferreira
MICM
VIC
Rea Group
5
Deborah
Maxwell
MICM
VIC
Independent Hardware Group
5
Edwar
Kartio
MICM
VIC
Transurban Limited
5
Effie
Zervakos
MICM
VIC
Visy Board Pty Ltd
5
Fungai
Gurure
MICM
VIC
Transurban Limited
5
Jane
Trask
MICM
VIC
Transurban Limited
5
Janine
Cations
MICM
VIC
Visy Board Pty Ltd
5
Joyce
Gin
MICM
VIC
Viva Energy Australia Pty Ltd
5
Judy
Eldridge
MICM
VIC
Visy Board Pty Ltd
5
Karandeep Chugh
MICM
VIC
Transurban Limited
5
Kathryn
Stephens
MICM
VIC
Independent Hardware Group
5
Marina
Tilley
MICM
VIC
Transurban Limited
5
Melissa
Yong
MICM
VIC
Viva Energy Australia Pty Ltd
5
Michael
Yu
MICM
VIC
Transurban Limited
5
Ross
Smith
MICM
VIC
Complete Credit Management Services Pty Ltd
5
Samuel
Shand
MICM
VIC
Transurban Limited
5
Sean
Devota
MICM
VIC
Independent Hardware Group
5
Shane
Smith
MICM
VIC
Transurban Limited
5
Surinder
Chopra
MICM
VIC
Viva Energy Australia Pty Ltd
5
Van
Nguyen
MICM
VIC
Transurban Limited
5
Aisling
Conlon
MICM
WA
Perth Energy Holdings Pty Ltd
5
66
CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Elders Rural Services Australia Limited
Pin Years 5 5
South Australia
Presidents Report
Claire Muecke (SV Partners), Chloe Parker (HWL Ebsworth), Rebecca Coates and Hannah King (both SV Partners).
Kathleen Lenton (NCI), Anna Taylor (Results Legal), Eloise Hall, Isobel Marshall (both from speakers Taboo), Alice Carter (SA Division President) and Canice Kerwin (Equifax).
Rachel Macheda (Department for Environment and Water), Gail Crowder (SA Division Director), Allison Balkauskas (Group Management Services), Rachel Coomblas (Walker Stores) and Tracy Kirkland (Boart Longyear).
As I approach 12 months as President of SA Division, I can’t believe how quickly that time seems to have passed. I am proud of the Council and their hard word to assist to facilitate a number of excellent events and functions during that time. Since I last wrote, the SA Division have enjoyed two successful events, being the Women in Credit Luncheon (WINC) and Trivia Night. WINC, which is personally my favourite event on the AICM calendar, was our largest to date. Crowne Plaza Adelaide was the perfect venue – classy and bright with gorgeous views of Adelaide. I would like to thank our event sponsors – Equifax, NCI and Results Legal. Your long standing support of WINC is much appreciated by the SA Division. I would also like to thank those who donated to our raffle – Equifax, NCI, Results Legal, Credit Solutions, Lynch Meyer Lawyers, Oakbridge Lawyers, Restore My Credit, SV Partners and Turks Legal for their generous contributions, with all money raised donated to Endometriosis Australia. We were thrilled to have a number of inspirational women join us to speak at our event, including Kristel Dally, who shared her journey of her diagnosis and battle with Endometriosis, along with Eloise Hall and Isobel Marshall, who are the co-founders of TABOO sanitary products. It was wonderful to hold
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 67
DIVISION REPORT
Annabelle Narayan (Oracle IS), Martine Hansen (Travancore Legal), Rebecca Young, Yulia Petrenko (both Oracle IS), Rebecca Halkett and Lauren Crosby (both Kain Lawyers).
DIVISION REPORT
South Australia
Merna Spain (Brice Metals) receives her raffle prize from SA Division President Alice Carter.
Tarissa Elmer and Crystal Elmer (both ScotPac).
Kathleen Lenton, Anthea Tsanaktsidis (both NCI) and Kim O’Brien (Korvest).
Chalene Johnson and Lauren Johnson (both Bendigo and Adelaide Bank).
Brigetta Garvey (Journey Beyond), Georgia Gray (Lynch Meyer) and Nicola Ribbans (Journey Beyond).
Alice Carter (SA Division President), Rachel Macheda (Department for Environment and Water) and and Rebecca Coates (SV Partners).
our event to celebrate the strength and success of women and those in credit. I would like to extend my thanks to AICM Event Manager Brittney Henderson for her support in organising the event. More recently, the SA Division held a Trivia Night, which was a welcomed opportunity for levity and
comradery, along with some healthy competition. Thank you to the many local businesses who donated to our raffle. The SA Division now looks forward to hosting the Young Credit Professional (YCP) of the Year awards dinner on 12 August 2021 at The Kentish Hotel. This year the AICM is proud to partner with new
68 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
South Australia
Nadia Zweck (Macquarie), Anna Taylor (both Results Legal) Lisa Plag (NCI) Leona Adams (Results Legal), Puja Khullar (Bendigo & Adelaide Bank), Hannah George (Results Legal), Lauren Johnson and Tracey Gourley (both Bendigo & Adelaide Bank).
sponsors, CreditorWatch and Australian Recoveries & Mercantile Agents (ARMA) for the YCP program. With three finalists this year – Cameron Henderson of Oakbridge Lawyers, Clare Venema of Restore My Credit and Michael Harris of Credit Clear Limited, I look forward to celebrating each of you on the 12th and watching our division winner represent our state at the National Conference in Brisbane in October. As a former South Australia winner of the YCP, I found the competition to be a professionally enriching experience and an important opportunity to mix with like-minded young credit professionals. I hope as many local members as possible will support the National Conference in Brisbane in October 2021, which I know AICM CEO Nick Pilavidis and his team are working hard to put together. I will shortly be stepping away from Council to go on maternity leave, but I look forward to continuing to support the SA Division in 2021/2022 and our new incoming President at our AGM in August 2021. – Alice Carter MICM CCE SA Division President
Women in Credit Luncheon On 14 May 2021, the South Australian Division enjoyed attending the Women in Credit Luncheon (WINC) at the Crowne Plaza. This year’s event was in support of Endometriosis Australia, which is a foundation that aims to increase the recognition of endometriosis, provide education programs, and help fund research. Endometriosis is a common disease in which tissue similar to the lining of the womb grows outside in other parts of the body. More than 830,000 (11%) of Australian women suffer from endometriosis at some point in their life. The disease is reported to cost Australian society $9.7 billion annually with two-thirds of these costs attributed to a loss in productivity with the remainder, approximately $2.5 billion being direct healthcare costs. The SA Division Council would like to thank the event sponsors for donating raffle prizes, with 100% of the funds raised at the raffle being donated to Endometriosis Australia. This year, the event had 93 registrations, topping registration numbers from 2019 and 2020, and $2,057 was raised in support of this fantastic charity. July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 69
DIVISION REPORT
Emma Trebilcock (EMT Legal), Mai Huynh, Nancy Duong, Alicia Labrosciano (all CCC Financial) and Carolyn Chhour (Creditsoft Solutions).
DIVISION REPORT
South Australia
Cameron Henderson, James Devonish (both Oakbridge Lawyers), Natasha Bissett and Maria Scacchitti (both NCI) with Briana Harris, Louise Anstee, Paige Walker (all Oakbridge Lawyers).
The team at Oracle Insolvency Services were enthusiastic participants in our recent Trivia night.
Guests were amazed by the ambition, eloquence and maturity of the speakers Eloise Hall and Isobel Marshall, who are the Co-founders of TABOO Sanitary Products. Both presenters have achieved a great deal in their lives so far and are a great role models for young women, particularly, noting that Eloise was awarded Young Australian of the Year in 2021. Eloise and Isabel spoke to attendees about their journey of creating TABOO, namely, with their journey beginning in 2016, when they both attended a Bond University leadership conference in the summer before their final year of high school. The girls were left inspired to establish a business that enabled the everyday purchases of Australians to improve the lives of people around the world. At the start of 2018, TABOO hosted a successful crowdfunding campaign, raising the $56,000 required to pay for the first order of TABOO Sanitary Products. Eloise and Isobel also travelled to India and Kenya to better understand the menstrual stigma and hygiene challenges in these countries. They spent time with local organisations The Mully Children’s Family and Simama Na Dada, and spoke to many community members, social 70 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
workers, and menstruating girls and women across the two countries. Throughout all this time, the team (which now includes nine core volunteers) has worked diligently and passionately to make TABOO Sanitary Products a reality. In August 2019, TABOO released its first batch of organic cotton pads and tampons to the Australian market. The work of Eloise and Isobel was truly inspiring, and their work definitely resounds with the focus of this year’s WINC functions, namely, being stronger together.
Trivia Night On Friday, 4 June 2021, the SA Division held its annual Trivia Night at the Unley Community Centre. The night was filled with energy and laughter, thanks to the help of Trevor Goodwin’s great job as an MC. Attendees were quizzed on topics ranging from pop culture to geography, with many team members surprising each other with their plethora of knowledge on bizarre facts. Along with the brain-bending quiz questions, attendees also enjoyed a lively game of head or tails, coin
South Australia
Scott McGrice, Josh Farrow and Annabelle Narayan (all Oracle IS) celebrating their team’s win.
The Australian Institute of Credit Management welcomes our Partners for 2021 Lynch Meyer team enjoying answering the quiz questions.
National Partners
Trusted Insights. Responsible Decisions.
Divisional Partners
Our enthusiastic quiz master National President Trevor Goodwin in full flight.
toss, and a raffle with a huge range of great prizes. The SA Division Council would like to extend a huge thank you to the raffle donations from Oakbridge Lawyers, Samuel Smith & Son, Pernod Ricard Australia, Oracle Insolvency Services, Restore My Credit, Lynch Meyer Lawyers, SV Partners, NCI, Toro Australia, Credit Solutions and Coopers Brewery. A special thanks must also be given to Anne Wilkins for being the score person for the night, along with Gemma McGrice, Gail Crowder and Trevor Goodwin for their contributions to organising the event, and a big congratulations to the team from Oracle Insolvency Services for taking out the win for the night and scoring a position on the most revered Trivia Night Trophy.
Official Division Supporting Sponsors
Our National, Divisional and Professional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 71
DIVISION REPORT
Gemma McGrice (SA Division Councillor), Gail Crowder (SA Division Director), Anne Wilkins (FMG Engineering) and Trevor Goodwin (National President).
DIVISION REPORT
Queensland
Mev Mahony (Qld Division Councillor) with members receiving length of membership certificates: Talitha Bere (5 years), Carly Rae-Orth (10 Years), Simon Culotta (25 years) and Maria Teodosio (10 years).
Shawnee-Ann Breslford, Matthew Span, Ellynnah Lamont, Renee Dobson, Georgia Weber (all NCI).
Matthew Dashcash, Alina Clarkson, Brett Hilder, Jocelin Vorster, Justin Watson (all Credit Clear).
Presidents Report
Women In Credit lunch in August. This is always a sellout event and its encouraged to get your tickets early. Qld is also excited to be the host for this year’s national conference! Details are on the website and you can always speak to the office staff if you have any questions. In the council, we are also happy to welcome Julie McNamara back as the Qld director. After a much-needed break, she is back and eager to continue on the work of advancing the AICM’s strategic goals and representing the needs of the Qld division at a board level. Other than that, our AGM is fast approaching, we will be confirming appointments to council and at the next council meeting, confirming the structure of council for the next year. With that I also would like to thank our sponsors both National and State for all the help and support you continue to provide. In these times of uncertainty,
We are now at the end of another financial year and looking back at the last 12 months, we have all struggled with challenges and overcome a lot too! At the time of writing, we are looking at the possibility of more lockdowns which add a greater level of uncertainty and disruption to business operations which further highlight the value all the resources and contacts being an AICM member provides. A quick look at the last few months has seen us successfully host our annual trivia night which was a great way for members to re-connect. In the events space we also have our YCP awards night coming up and we are excited to have CreditorWatch and ARMA come on board as the new sponsors for this very important award. I wish all the contestants all the best and look forward to celebrating your achievements. And not long after that we hope to see you all at the 72 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Queensland
A competitive game of heads or tails to get the night started.
George Wolf (CreditorWatch) with Michelle Klemmt, Zack Hart, Brent Cooper and Joshua Bick (all InfoTrack).
The Cleanaway team: Michelle Bidesi, Jerome Tongalea, Nicolle Hewat, Cameron Patrick and Mark Moorhouse.
Alida Chan (Oakbridge Lawyers), Stacey Woodward and Merv Mahony (both Qld Division Councillors), Simon Cullotta (CRM Credit Advisory) and Zandalee May McKenzie (Oakbridge Lawyers).
it is good to have you continue to invest in us. A lot of what we do relies on our partnership and as things open up, we hope to have many more opportunities to work together. And to end things, I would like to say thanks to all our councilors, they do an amazing job and are truly
committed to doing what’s in the best interest of our members. Thank you all for an amazing year and we look forward to the next year as it will certainly be a busy one! – Roger Masamvu MICM CCE Queensland Division President
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DIVISION REPORT
Nathan McQuade, James Stewart, Chris Harris-Hughes, Amanda Lake and Sharyn Tregenza (all NCI).
DIVISION REPORT
Queensland
Melissa Jarvin, Hannah George, Nicole Neal and Cameron Clough (all Results Legal).
The Shell Australia team represented by Ashleigh Mason, Talitha Bere, Melissa Bartley, Susan Withers and Michelle Kirby (Queensland Division Councillor).
An amazing night and fantastic turnout for our annual trivia event.
Trivia night Our annual trivia event is back! After a year off we had over 80 delegates join us at The Lord Alfred Hotel hosted again by the amazing James at Think Trivia who never disappoints and provides an engaging trivia experience for all. Not only did we have the usual trivia questions and some bad sing a longs, all teams had to build their best paper plane and see who could throw it the furthest which was a huge hit! In the end there can only be one winning team and a huge congrats to Quizzolvency for coming out on top followed by Trashed & Wasted coming 2nd and Broke Back Mountain coming in third. A big thank you to Results Legal and Vincents who sponsored this amazing event and who also donated prizes for the night. We can’t wait to see you all again for next year’s event! 74 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Talitha Bere on YCP and completing her Certificate IV in Credit Management with the AICM: I was nominated by my peers in 2018 and 2019 for the YCP awards, even though I didn’t win, it gave me experience by being interviewed by a panel of judges and getting me out of my comfort zone. It has opened me up to some great opportunities, such as meeting and networking with like-minded people as well some great peers and leaders in credit. This gave me inspiration to want to better myself and to give myself more knowledge and understanding of the
Queensland
Cody Niezgoda (JHK Legal), Rachel Feng (MKP Property Lawyers) with Jemerrie Golaw, Morgan Beames and Costa Stathis (all JHK Legal).
COVID-19, leaving a comfortable job and by taking a risk with a new company and industry, and I have recently been accepted on a new and emerging leaders programme within Shell Energy.
The Australian Institute of Credit Management welcomes our Partners for 2021 Queensland Councillor Steven Staatz shows his colleagues from Vincents, Ashley Leslie and Josephine Decuyper, how to fold a winning glider.
National Partners
Trusted Insights. Responsible Decisions.
Divisional Partners
The paper plane competition was a favourite of the night.
credit industry by doing starting my certificate IV in Credit Management in October 2019. It was hard, working full time and studying but I persevered and was fully supported by the AICM, a special mention to Toni Sawyer who was my facilitator and for being such a great support and for giving me so much of her time. I am incredibly grateful to have had her as my mentor. I have since attended my 1st AICM seminar and a couple of networking events in which I recently received my 5-year AICM membership pin. I moved companies in the middle of 2020 during
Official Division Supporting Sponsors
Our National, Divisional and Professional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 75
DIVISION REPORT
Matthew Guttormsen, Dale Hannan (National Collection Services), Decia Guttormsen (Queensland Division Director), Yvette Besaans and Chantal Bott (both University of Queensland).
DIVISION REPORT
Western Australia/Northern Territory
Economic breakfast presenter Aiden Depiazzi of Deloitte Access Economics.
Life member and past national president Frank Vredenbregt receives his CCE recertification from WA Councillor Raff Di Renzo.
Sarah Bracegirdle, Darrelle Harsch, Michael Hall (all NCI) Grace Welch (QBE) Cecilia Lam, Jolyon Ralph and Adam Doyle (all NCI).
Presidents Report My last report in April spoke of how the ‘Wild West’ had been relatively quiet on the event front, yet our Council were (as they are always) hard at work behind the scenes pulling the final details together for several events that we have now been able to hold, with great success and feedback. Whilst on the subject of the WA Council, we are privileged to welcome Cheri Bowater MICM, Credit Risk Manager at Summit Rural to the WA Divisional Council. Cheri has been a long-term member and supporter of the AICM and will bring a wealth of knowledge and experience to the WA executive, not to mention a welcome injection of fresh ideas to our team, welcome Cheri! Following on from the National Insolvency Seminar series on 22 April (reported on in the April issue of the AICM magazine), our annual Economic Breakfast followed in May, with an eager audience at the Doubletree Hilton 76 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
to hear from our new keynote speaker, Aiden Depiazzi. A highly informative and well received event, which we elaborate on later in this division report. Our thanks to Aiden for his time and insights, and we hope to see him back again next year. In June, we moved to the Doubletree, this time down on the Waterfront at Elizabeth Quay for our Women In Credit (WinC) luncheon, which is fast becoming our most popular event of the year, where we welcomed our female credit professionals and guests to hear from our keynote speakers, Ruth Hatherley of MoneyCatcha and Endometriosis Australia Ambassador, Christine Layton. Both ladies were an absolute pleasure to host, and their stories were engaging, insightful and above all else, inspiring. My sincere thanks to both courageous and captivating women for not only their time, but their authenticity and transparency when telling their stories. We now look forward to our next and most
Western Australia/Northern Territory DIVISION REPORT
A fantastic turnout to our Economic Breakfast.
Economic Breakfast presenter Aiden Depiazzi with Lisa Marr (Instant Waste Management), Rowan McClarty (WA Division Director), Cheri Bowater (Summit Rural), Sarah Bracegirdle (NCI), Frank Vredenbregt and Kevin Allen (Equifax).
prestigious event, the Young Credit Professional Awards. At the time of writing this, we have once again been reminded that COVID-19 is not going away, and we are closely monitoring the circumstances around the country, with contingency plans ready should we need to change the date or venue because of government restrictions, so please stay tuned. And lastly, we are also at that time of the year when we hold our AGM (which will occur on the evening of our YCP dinner, just prior to the event starting). The AGM is your opportunity, as members to have your say and hear from your Council on the outcomes of the previous year and to vote on council member (re)elections – I strongly encourage all members to attend the AGM and the YCP Gala Dinner following and support your Institute and its Young Credit Professionals rising through the ranks. – Troy Mulder MICM CCE WA Division President
Economic Breakfast On 18 May the WA AICM held its 2021 Economic Breakfast at Doubletree by Hilton in Northbridge, Perth. Aiden Depiazzi, a Senior Economist from Deloitte Access Economics, demonstrated why he was recommended to the AICM. Obviously knowledgeable, our members were informed in clear layman’s terms what the Deloitte team believes to be relevant information regarding the WA and National markets, the economic recovery after the pandemic, as well as the impact on Credit Professionals. The takeaway from the presentation was that economic growth in 2021 and into 2022 will be strong and driven by households and international exports – coming off a low base in 2019 and 2020 – however net debt will still be close to $1 Trillion by 2024-25 and the budget will need to be brought back into balance at some point. In the meantime we should continue to make hay while the economic sun shines. July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 77
DIVISION REPORT
Western Australia/Northern Territory
Amanda Clarke, Scarlett D’Agnone, Fiona Newman and Ma Luisa Jabonero (all Westrac) with Mariana Pereira and Elny Martin (both SV Partners).
Colin Wagstaff (QBE), Nichola Caddy (Digital Process Servers), Cheryl Dickinson (Vinidex), Edwina Reed (Brickworks), Chantale Victor (Freo Group), Sharon Ruisich and Sharlene Rowan (both BGC).
Cheri Bowater (Summit Rural), Brenda Woodger (Credit Solutions), Melissa Sharpe (Turner Engineering), Stella Hulm (Credit Solutions), Sumeeta Kabra and Sarah Robinson (both from CBH Group).
The WINC Initiative – Women in Credit Luncheon #strongertogether
Daniel Saccoccio (Equifax), Zoe Anderson and Elisabeth Kirkby (both RAC Finance) with Suzanne Harrison and Meagan Ibbott (both Department of Transport).
78 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Friday 11th of June the AICM in Perth held the annual Women in Credit Luncheon at the Double Tree Hilton at Elizabeth Quay. Sarah Bracegirdle from NCI introduced Endometriosis Australia Ambassador Christine Layton to tell us of her experiences and of the research happening in this field of women’s health. She was very honest and straightforward about the issues facing women with this disease.
Western Australia/Northern Territory
The Australian Institute of Credit Management welcomes our Partners for 2021 Our wonderful presenter Ruth Hatherley of Moneycatcher.
National Partners
Trusted Insights. Responsible Decisions.
Divisional Partners
Rikki-Lee Schulze presents Ma Luisa Jabonero with her raffle prize.
Daniel Saccoccio from Equifax thanked all attendees on behalf of Equifax for their support during the pandemic environment. With that, he introduced Ruth Hatherley, CEO of Moneycatcha Pty Ltd. Ruth shared with all of us her personal mission to inspire more women in credit to innovate and change the industry. With Ruth’s single purpose vision of “Connecting you with truth by creating systems of ultimate speed, efficiency & security”, she delivered a very inspiring presentation on having a unique voice and to add value always in the space which we inhabit. Moneycatcha Pty Ltd has now worked with a number of financial and government organisations to improve how they optimise, report on and manage the risk of data in their businesses. We were all in agreement amongst the attendees the fact Ruth’s presentation was truly inspirational to Women in Credit”.
Official Division Supporting Sponsors
Our National, Divisional and Professional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 79
DIVISION REPORT
Ying Cheng and Stacey Khor (both Bankwest), Sally Hutchinson and Natasha Petrie (both BRI Ferrier), Melanie de Jager, Sue Tyrell, Donna Lopez and Tessa Alberti (all Capricorn Coop).
DIVISION REPORT
Victoria/Tasmania
Emily Manna and Kelsey Spencer (both from NCI).
Rhys Buzza (Reece Plumbing) with Chris Sertic (Equifax).
Sherif Hussein (Vic/Tas Division President) with Tony Mackwell (Victorian Managed Insurance Authority), Carole McTavish (Australia Post) and Mary Petreski (Vic/Tas Division Councillor).
Our presenter Dean Pearson from NAB.
Presidents Report
have been successful at Nationals and won the National YCP award; Sunny Sharma and Rebecca Roberts have been winners. 2021 sees two new joint sponsors for both the divisional and national Young Credit Professonals. Thank you ARMA and CreditorWatch. What prestigious awards and a special event. We can’t wait to see you all at the presentation night be it face to face or virtually. WINC event this year was another milestone and memory that I’ll cherish forever as the President of the Vic/Tas division – calling out a big thank you to our sponsors Equifax, Results Legal and NCI for making this event possible and prestigious. To my councillors who rally behind me each year to call or email seeking raffle prizes or donations for our auction, endometriosis collected over $4,700. Thank you to each and everyone who continues to support us and prizes.
Wow-what a great couple of months the Vic/Tas Division both councillors and members have had with events. I’m so excited to say that we finally jumped over the COVID19 hurdle and were able to run our events. It was nice seeing you all at our events in 2021, Breakfast Session, Networking, National Insolvency Seminars, and in April Economic Breakfast and WINC Luncheon. As I write, we are currently in the process judging our 2021 Young Credit Professionals with the winner to become the future YCP representative for our Victorian/Tasmanian division and represent our division at the national judging in October. Councillor Amaran Navaratnam looks after the YCP portfolio; each year, he is passionate about driving and help each YCP applicant to get the best outcome from their presentation before sitting in front of the judging panel. Since Amaran has been looking after the portfolio, we 80 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Victoria/Tasmania
Sherif Hussein presents the raffle prize to Michelle Caruthers (Vic/ Tas Councillor) with Stephen Moloney (AMPAC).
Eloise Cowan, Halle Skews, Catrina Galanti (Vic/Tas Division Vice President) and Emily Manna (all NCI).
Nicola Beswick (FMD Financial) with Krystal Everitt (Cor Cordis).
Thank you to Robyn Erskine for stepping into my shoes this year and being our MC and to all our members and non-members who attended and made this event a success. We have some great news to announce, we have welcomed Tasmanian Collection Service as a supporting sponsor of our Division, and we look forward to engaging with them with our AICM events in Tasmania.
behavior with data and insights into how consumers and businesses behave. Sitting here today and writing this article made me realise how quickly things change. In Victoria, we have experienced multiple lockdowns, and everything that Dean shared with us around anxiety and how this impacts our behaviors. These are some of our top concerns that Dean called out, Economy, Travel, Movement Restrictions, Health System unable to cope with demand, Business Closures, and running low on key household essentials, like toilet paper. Even though we went through hard times, more Australians than ever thought Australia is the Lucky Country and a Great place to live. Not being able to travel and movement restrictions in play, we as consumers changed our shopping behaviors; we were mindful of how we spent our money. We started to support our local businesses and buy Australian
– Sherif Hussein Vic/Tas Division President
Economic Breakfast Thanks to Turks Legal for being the National Economic Breakfast Sponsor for the AICM in April. Dean Pearson, Head of Behavioural & Industry Economics, Group Economics at the NAB, was our presenter and shared meaningful insights into human
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 81
DIVISION REPORT
Our wonderful WINC speaker Tanya De Jonge of Mind Medicine Australia.
DIVISION REPORT
Victoria/Tasmania
Ruth Hamour (Penrite Oil) and Sue Sutton (PFD Foods).
Linda Amos, Amanda Chow and Michelle Woo (all iQumulate Premium Funding).
Lori Popa (National Mercantile) and Sineth Sar (RST Consulting).
Anna Taylor (Results Legal), with Lynn Quigg and Lilian Bougiouklis (both Ball & Doggett).
products; we started to buy online, search our products, try a new product, change our regular stores, and more innovative with cheaper choices. Take out food, games/toys was where we spent our money. With the government surplus injected last year, we found the extra cash to pay our bills and purchase cars. Financial anxiety may have fallen, Australians are still experiencing a slight increase in financial hardship over the last 12 months. Australians are still finding it hard to have money saved for emergencies, and credit card options are high for paying off their debts. What happened to our business conditions rose for all industries, except for mining, wholesale, transport, and utilities. The two significant gains were Manufacturing and Construction. Construction may be the weakest; however, it’s still positive. Favourablen where retail, finance, business and property services, and wholesale from March 19 to March 21.
We also celebrated CCE Recertifications and membership anniversary’s 5, 10, 20, 25, and 30 years. Congratulations to Nella Simeoni, Catrina Galanti, Mary Petreski, Rhys Buzza, Donna Smith, Jeanine Purdie, Ben Willoughby, Sherif Hussein, Vaios Kortikis, Anthony Mackwell, Colman Moloney, and Kim Radok. Thank you, Mary Petreski, for being our MC and Catrina Galanti for organising the event with AICM Event Manager Brittney Henderson.
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Women in Credit (WINC) On Friday the 7th of May we held our annual Women in Credit luncheon at the RACV club in Melbourne. Before the doors opened to be seated, the positive energy in the room was palpable. Everyone was so happy to be together again and for a good cause. This year our charity was Endometriosis Australia, as
Victoria/Tasmania
Susan Nguyen (AGL) with Melanie Woodward (Sharp & Carter).
Your Vic/Tas Division Councillors celebrate WINC: Catrina Galanti, Rebecca Roberts, Michelle Carruthers, Ricky Forster, Alan Izra, Sherif Hussein and Robyn Erskine.
it is near and dear to many of us, and the brave Jamie Boiskin was our speaker. She opened up about her life story and how she has integrated her Endo journey through her career being a creator and performer of the comedy cabaret “Ovariacting: A Period Drama”, a riotous and informative cabaret about periods and Endometriosis. Through the show, Jamie has raised awareness about Endometriosis and plans to continue creating art that encourages others to educate themselves on Endometriosis and share their own journeys. She encouraged everybody in the room to get checked before it’s too late. Tanya De Jonge, founder and chair of Mind Medicine Australia and Creativity Australia was our guest speaker for the day. She spoke about developing the left brain and the skills that businesses will need in the years to come including caring, sharing, citizenship, creativity and
entrepreneurship. She talked about having more diversity and positive human collisions with people that are unlike ourselves and to jump into our left brain space as often as possible. A huge thank you to our premium sponsor, Equifax and our two supporting sponsors NCI and Results Legal. Special thanks to CreditorWatch, Kinnon, Gordon Jenkin and Quest for donating the high dollar value gifts for the silent auction. Thanks for the lucky door prize goes to Results Legal and the table prize to Brooke Bird. Also, a big thank you to everyone that donated a prize for the raffle, it’s always so much fun ending the luncheon with the raffle tickets draw where everyone goes home with a gift knowing the contribution the day has made to Endometriosis Australia. Looking forward to WINC in Tasmania/Hobart on the 10th of September! – Michelle Carruthers MICM
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DIVISION REPORT
Jessica Taylor (illion) with Janice Thomason (Bluescope Steel).
DIVISION REPORT
Victoria/Tasmania
Belinda Walker, Dee Tiet, Kim Tu and Katsy Lee (all Adidas).
Andrea Wilbourne (JB Hi-Fi), Jamey Balkos (Equifax) and Katrina Bromley (Spicers).
Celebrating the effort that goes into organising such a wonderful day: Catrina Galanti (Vic/Tas Vice President), Robyn Erskine (Vic/Tas Councillor), Sherif Hussein (Vic/Tas Division President), Tanya De Jonge (Speaker), Anna Taylor (Results Legal), Jamie Boiskin (Endometriosis Australia) and Debbie Leo (Equifax)
Members in the Spotlight Sia Patouras MICM Managing Director at CollectAU
21 Years of Membership Sia is the one of the most humble people I know; always smiling and such an amazing business owner! When you get the privilege of meeting her you will know what I mean. She always has time for a heart to heart conversation and is incredibly patient.
Sia Patouras MICM
84 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Sia has seen a lot of changes in the collections space over her impressive career. As I interviewed her, she took me through her career, from starting in the industry where collection agencies were small family owned firms, to now, with large publicly listed companies. She began her career at Laurens & Co in sales and then RMG as a Client Liaison executive for the banking and finance industry. RMG was the first publicly listed collections agency in Australia. From there she moved across to be part of the team that started Australian Receivables Limited and it was her first chance at having equity in a business. Taking a trip down memory lane, Sia fondly remembers the late 80/90’s being solely a commercial market for collections, and then the introduction of
Victoria/Tasmania DIVISION REPORT
Vic/Tas Division President Sherif Hussein celebrating a fantastic day with her guests and colleagues.
Mary Petreski and Michelle Carruthers (both Vic/Tas Councillors) with Belinda Worton (Penguin Random House).
Donna Cortissos and Brooke McGlashan (both MessageMedia).
Consumer collections in the mid 90’s which opened up the market to Telcos, local government, Utilities and banks. Keeping up with legislative and regulatory changes has always kept the debt collection industry on its toes. After roughly 20 years in the collections space, Sia decided to try her hand at Mortgage broking, which is how we connected at an AICM function. Sia found mortgage broking to be more transactional and she missed building long term relationships with her clients. From this realisation, together with all her prior knowledge from her career, CollectAU was born. When I asked her what she was most proud of with CollectAU she said, “my loyal colleagues and clients and how quickly I was able to build a presence in the market”.
Asking Sia what has kept her a member of the AICM for so long, she said “I love the interaction with credit professionals at events. My favourite event used to be the quarterly dinners and now it’s the conference, where I get to see so many familiar faces and have a conversation outside of work”. On a personal note, Sia is married with two children; a son that is a lawyer and planning his wedding and a daughter who is completing her university studies and turning 21 this year. She is also a foodie who loves shopping, yoga and travelling (most recent trip was to Hawaii just before lockdown). – Michelle Carruthers MICM
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DIVISION REPORT
Victoria/Tasmania Lilian Bougiouklis National Credit Manager at Ball and Doggett At 18 years old, Lilian started out as a clerk for the credit department at Robot trading. Six months into the role she was promoted and that is where she found credit. Shortly after, she was poached by one of their suppliers to do collections, processing of invoices, Lilian Bougiouklis bookkeeping and all this was before the use of computers. In 1993 she worked for Dulux as a Credit controller, and then went on to become a supervisor of a team of three Credit controllers in a department of 28 people. She recalls the time when her team would manually send out 1000’s of collection letters. “Each accounts person looked after 2500 accounts”. After six years Lilian took a job as a credit supervisor at Icon plastics and then was promoted to Credit Manager, where she stayed for 18 years and managed a team of three. She has been able to use her amazing skills and experience to clean up the company’s processes, production, claims area and ledger, all while aiding in acquisition work and being in control of IT, AR, AP, Shipping Imports and Directors property portfolio. Lilian’s motto in life is to always aim higher, she loves to get her hands dirty and educates her team with a hands-on approach. No job is above or beneath her. What she is most proud of is being one of the pioneers in Australia in respect of quality assurance accreditation, as Dulux was one of only two companies in Australia to be ISO world accredited at the time. With the goal of always aiming higher she also had quality assurance accreditation completed for her finance team. The story of how Lilian came to be interviewed by Ball and Doggett is fantastic. Her husband, unbeknown to her, applied on her behalf to two recruiters for the job in 2017. Like all her previous roles, she cleaned up their ledger and introduced processes and efficiencies that have made the company who they are today. Just by interviewing Lilian, I can tell that anyone that has worked with her is incredibly lucky to have someone so diverse, knowledgeable and giving by their side. The thing that Lilian gets the most out of being a member of the AICM is the “consolidation of information”. She confidently knows that the AICM will gather all information relating to credit managers and diligently share that information so that she and her team can learn and be prepared for the change. Lilian comes from a huge family of five with four 86 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
sisters and her parents have 18 grandchildren and 19 great grandchildren. Lilian loves to entertain, and Christmas at Lilian’s house has over 40 people. Her three kids are soccer and motorbike fanatics, and she was the treasurer for the South Springvale soccer club as well. – Michelle Carruthers MICM
Call out to all Credit managers!!
YCP is on the horizon: look in your team for someone (under the age of 30) that is continually striving for excellence and needs to be recognised on a bigger scale!
What it means to be a Young Credit Professional (YCP) When I am asked the question of what it means to be a Young Credit Professional (YCP), I describe it as being a credit leader for an evolving landscape of consumerism! The landscape of credit is no longer a true reflection of what Credit Management used to be 20 years ago for retail and commercial credit. With technology, Amaran Navaratnam MICM CCE legislative changes and economic impacts driving financial hardship, YCPs are required to be the driver of success for their organisation and to protect the profit margin by using tools to mitigate financial risk exposure and ensure business continuity. YCPs are not only protecting the organisation’s financial risk exposure, but are all contributing to protecting Australia’s economy!
Why the YCP award is important? “I didn’t choose credit, credit chose me” resonates with us all as we can describe some of the key skill sets such as; relentless drive, leadership and passion for what we do day to day that keeps us in the industry for many years. As a YCP, we are the leaders of the present and the future!
Victoria/Tasmania
Why you should apply for the award? If you are considering applying for the YCP award in 2021, or in the future, do not give up this opportunity because of your nerves, or, if you struggle with the thoughts of “what if I don’t win?” A YCP nomination is the industry recognition that you deserve! The YCP award is open to all credit professionals in all paths of Credit Management. It is all of you! – Amaran Navaratnam MICM CCE Chairman – YCPA (Vic/Tas)
The Australian Institute of Credit Management welcomes our Partners for 2021 National Partners The YCP award recognises all credit professionals, from all paths of credit including origination, credit risk, receivables and legal.
Trusted Insights. Responsible Decisions.
What the YCP award process meant to me? I will always remember 2014! 2014 was the year that changed my career! One afternoon, I was called into a meeting room with highly regarded stakeholders of the organisation that I worked for with no inclination of what was about to happen. I was spoken to about the AICM and the YCP award and being nominated for this prestigious industry-based award, and all this time I simply felt “I am just doing my job”. I left the meeting room full of excitement and anxiousness, but I knew just being nominated for this award, regardless of the result, was going to be the change I needed for my personal and career development. The lead up toward the interview required preparation to be across both the commercial and retail credit risk topics. As prepared as I felt, the nerves definitely settled in, but I knew the nerves were there because I was really excited to undergo the entire process. On the evening of the award ceremony, I was presented with the runner up award, being the ‘Tony Mammone’ award for Vic/Tas. The Tony Mammone award is a commemorative award dedicated to an influential educator and facilitator for the AICM. Winning the award was the game-changer for my career and my involvement with the AICM as I was soon
Divisional Partners
CREDIT MANAGEMENT SOFTWARE
Official Division Supporting Sponsors
Our National, Divisional and Professional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 87
DIVISION REPORT
appointed the Chairman for the YCP portfolio for Vic/Tas in 2015 and have been managing the portfolio over the last 7 years, with Vic/Tas winning the National award in 2018 and 2020.
DIVISION REPORT
New South Wales
Emma Berry, Caroline Smith, Annie Esposito and Arman Vejdani (all CreditorWatch).
Jonathan Wightwick (Equifax), Hamish Osborne (Creditworks) and Gary Poslinsky (EDX).
Luke Deer and Andrew Grant (University of Sydney), Annie Esposito (CreditorWatch) and Shalini Arora (Solgen).
NSW Division President Balveen Saini presents Julie Payne (Sydney Catholic Schools) with her 5 year membership certificate.
Presidents Report
the 2021 Women in Credit (WINC) luncheon, it had to be cancelled (with a view of postponement at a later date) in accordance with NSW Government COVID-19 restrictions. I am pleased to confirm that the 2021 WINC luncheon is scheduled for 17 September 2021. The same decisions were also made in relation to the planned professional development seminars which were scheduled for July and August 2021. I would like to share with you all that I have decided to step down as President of the NSW Division of the AICM. During my 5 years of tenure, I have thoroughly enjoyed representing NSW and leading the best council. Thank you to the most hardworking team for all your support, and to all my mentors who have guided me along the way. In the interests of remaining optimistic I would like to think that by the time the next AICM magazine publication is issued, that NSW will be able to share updates on recent events and functions. In the time being, I hope you, and your families, are remaining safe and healthy and as we adapt to this new normal.
We hope you are all keeping well and have got through the end of financial year unscathed. Most of you are probably flicking through the magazine and reading from your home office as you do your very best to adhere to the latest restrictions in lockdown. In doing so the days may feel long, and the weekends even longer. The buzzing office environment and phone ringing off the hook all feels like a distant memory; so, don’t forget to check in with your colleagues and friends (especially those who are home schooling their children). As a council, we here in NSW are closely following the issues unfolding around COVID-19. The health and safety of the AICM’s councillors, members and broader community is of paramount importance. In an effort to ensure that AICM’s members and sponsors are being supported by the NSW Council, we are committed to creating more value out of your membership, providing more opportunities for engagement with webinars and education, and also to AICM’s dedicated sponsors. Unfortunately, days before NSW was going to hold 88 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
– Balveen Saini MICM CCE NSW Division President
New South Wales
Jacqueline Vander Meeden and Nicola Kyprianou (both Optus).
Nick Pilavidis (AICM) with Andrew Smith (ARMA) and Alex Caruana (Risk & Security Management).
Christine Higgins and Kerry Smith (both Scotts Refrigeratated Logistics).
Technology in Credit On 8 June 2021, the NSW AICM Division enjoyed a sold-out Technology in Credit discussion at the stunning new ARMA office, at The Grounds Alexandria. The event focused on the technological tools that are available to credit managers both now and in the future. We were privileged to listen to industry leading speakers including: z Jacqueline Vander Meeden, Optus discussed how digital facial biometrics is the new way companies will request and authenticate consumers ID. z Patrick Coghlan, CreditorWatch, spoke of how bureau data can assist with auto decisioning and he also shared insights and recent trends. z Matthew Dowling, CNH Industrial, spoke of how bureau data alongside non-traditional ‘alternative data’ could be ingested into your CRM via APIs to assist with managing the customer life cycle. z Eric Maisonhaute, Esker, excited us with how AR systems today can use AI to learn your customers behaviours to assist with prioritising collection calls through to allocation of payments. After the thought-provoking session, the delegates then
Ines Nikolic (Force Legal) with David Jovanov (ARMA).
stayed on to share their own stories (and a cheeky wine or two) at the Potting Shed Thank you to everyone who made their way out to Alexandria in the cold and rain, it was definitely worth the trip! July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 89
DIVISION REPORT
Technology in credit panelists – Matthew Dowling (CNH Industrial), Patrick Coghlan (CreditorWatch) and Eric Maisonhaute (Esker).
DIVISION REPORT
New South Wales
Representing the bowling night sponsors and celebrating a winning bowl: Rob Willoughby (CreditorWatch) and Andrew Smith (ARMA).
Hayley Hitch, Bo-Jenna Hansen and Bonnie McMahon (all Matthews Folbigg Lawyers).
ARMA group team – Andrew Smith, Eddie Smith, Andrew Smith and David Jovanov.
Archie Brothers Social night After so many months of not being able to meet it was fantastic to come together at a social event and have everyone catch up in a relaxed environment. Our event at the venue Archie Brothers was sponsored by ARMA and CreditorWatch and this allowed us to keep the ticket price down (thank you!). The night consisted of bowling for the first hour with the teams enjoying the interaction and the banter as they tried to better their colleagues and rival teams results. We then moved into the main area of the venue where we had one hour of unlimited access to a multitude of arcade games and got to meet new friends and catch up with some old ones. The pictures demonstrate the fun that was had.
NSW WINC – postponed! COVID-19 continues to send us curve balls with more crazy times ahead I’m sure. The NSW lockdown of mid-June saw Women in Credit luncheon postponed until September 17. 90 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
Your WINC team is confident that this date will be fine but also let’s keep our fingers and toes crossed to help. We’ve got over 250 attendees registered and we’re gratified that almost everyone has agreed to move to the date – a big THANK YOU! Also thank you to our sponsors and our speaker who were happy to change and work with us to keep everyone safe plus those supporters of AICM that donated prizes for the raffle and auction we have on the day. Our speaker is the amazing Mandi Gunsberger, whose story of startups, families, babies and making it all happen in an unflappable manner is truly inspiring. All proceeds from our raffle will go to Endometriosis Australia. We can still accept registrations for the event and should you wish to attend on the new date please book online or contact the office. Can’t wait to see you on 17th September! – Treacy Sheehan MICM NSW WINC Committee Member
New South Wales
Melissa Giarratano, Simon Young and Toni Murtanovski (all CCSG Group).
Benjamin Bronzon (Gadens), Andrew McEvoy (Alston Chase Lawyers), James Rowland , Clementine Woodhouse (both Gadens), Ian Nicol (Alston Chase Lawyers).
Sponsor in the Spotlight
What do you do for fun/what are you passionate about?
The NSW Council is excited to welcome Paycepaid as the latest Divisional Partner of the AICM. Balveen Saini, NSW President, sat down with Paycepaid’s, Founder and CEO, Bill Mali, to welcome him and his team onboard.
I enjoy fitness, reading, golf, fishing and collect fine wine and single malt. I am also passionate about working and building Paycepaid.
How long have you been involved in the industry and what is your background in credit?
What is an interesting/random fact about yourself that you would like to share? I have lived for short and long periods of time in 6 different countries.
In a few words, can you tell me about Paycepaid what you can offer to AICM’s members and stakeholders? Bill Mali
Founded Paycepaid 2 years ago and prior to that spent the last 15 years working in credit & collections for some of Australia largest brands.
Paycepaid is an end-to-end world class invoicing and account receivables software. We leverage the latest available technology to help credit leaders automate their collection. I look forward to meeting the AICM members so they can learn more about what we do, and in turn we can assist them in process and automation improvement. July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 91
DIVISION REPORT
Each of the TurksLegal team are intent on winning – Sarah El Masri, Georgina Wu and Mitchell Hay.
DIVISION REPORT
New South Wales
John Hall (CCSG Group) sinks the ball and is watched by Malcolm Poslinksy (EDX).
NSW President Balveen Saini demonstrates her dodgem skills to Nicholas O’Connor and Josh Mizzi (both BBW Lawyers).
Massive turnout from Optus. Back row: Lynda Lee, Danny Tran, Theresa Brown, Nicola Kyprianou, Melissa Khalil and Alex Simmons. Front row: Jacqueline Vander Meeden, Monica Cortez and Krystal Sivapalan.
NSW Member Contribution The AICM is committed to their promise, to its members. In doing so, the NSW Council encourages members to share their experiences, ‘wins’ and ‘losses’ and any challenges which they may have overcome whilst working on the frontline of credit.
At the Coal Face Definition: doing the work involved in a job, in real working conditions, rather than planning or talking about it. We have been working closely with a customer who is stretched financially due to contract issues on a major project and having to sue his financially strong customer to get what is rightfully his. There have been hundreds of thousands of dollars spent on Security 92 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
of Payment actions chasing many, many millions of dollars. A Voluntary Administrator (VA) was inevitable to enable a proper resolution and restructure. It was fair to say creditors were circling with one petitioning creditor being in court in June 2021 for a wind up. That action was supported by 3 other creditors. Just 48 hours before that court hearing a VA was appointed. The Director was putting together a quite reasonable Deed of Company Arrangement (DOCA) which would not see the light of day if the hearing was successful and a Liquidator appointed over the top of the VA. We believed in the Director’s proposed course of action and to assist him provided a letter of support
New South Wales
for the VA. Next we reviewed a list of creditors of the company and jumped on the phone the afternoon before the hearing. In the space of a few hours we were able to convince a number of other creditors that a VA provided the best outcome for all. We were able to garner support from more creditors in both number and dollar than those that were petitioning for Liquidation. The VA took this information/support to the hearing and was successful in defeating the application for windup. Learnings from this: z Don’t just think outside the square, but act on it. z Know your customer well, know his capabilities, take the time to understand his position and be prepared to work with him. z Have a good contact network – like minded professional people with mutual respect. z Consider your short and long term position | We will recover the majority of our debt, whereas in a Liquidation we would be lucky to see 5c in the $. | When our customer gets through this we will have a customer for life | VA’s don’t chase preference payments | In this case it would seem at least 4 creditors took the knee jerk response of commencing wind up action rather than getting to know their customer and understanding his position. Money poorly spent. z At the risk of repeating myself have a good contact network – like minded professional people with mutual respect. PS. Thanks to the professional Credit Managers who supported me in supporting the customer. I know you are members of the AICM, will no doubt read this and I am sure will identify the matter and know who you are. Thank you.
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
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.
– Anon CCE
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 93
DIVISION REPORT
Rob Willoughby, Ryan Arnold (both CreditorWatch), Eddie Smith (ARMA) and Caroline Smith (CreditorWatch).
DIVISION REPORT
New members The Institute welcomes the following credit professionals who were recently admitted to membership between April and June.
New South Wales
Queensland
Mon Arvi Alavaren
Kingmill Pty Ltd t/a Thrifty Car Rental
Mark Abercrombie
Queensland Rural and Industry Development Authority
Kala Avinash
Allianz
Kassia Bennett
Australian Liquor Marketers
Simon Balales
TurksLegal
Michael Blonk
Blonk Consulting
Susan Jane Barnett
SR Group
Lorelle Brauer
Wyndham Destinations
Jignasha Bhoi
Veolia
Kelly Bull
Wyndham Destinations
Simon Bligh
illion
Derek Caske
Australian Liquor Marketers
Girlee Castillo
Wyndham Destinations
Donna Carthey Melisa Daniel
Rheem Australia
Kara Cherry
Australian Liquor Marketers
Anna-Lee Dunk
Euler Hermes
Claudia Coelho
Shirley Fong
Euler Hermes
Queensland Rural and Industry Development Authority
Daniela Fraumeni
Master Builders Association NSW
Jeremy Conaghan
Heritage Bank
Vince Gozum
Kingmill Pty Ltd t/a Thrifty Car Rental
Glenda Ferguson
Australian Liquor Marketers
Andrew Forbes
TurksLegal
Gaurav Gupta
illion
Lauren Harvey
Australian Liquor Marketers
Mitchell Hay
TurksLegal
Zac Heidrich
Heritage Bank
Ross Iannello
TurksLegal
Matthew Joiner
Cor Cordis Chartered Accountants
Daniel Jepson
Holman Webb Lawyers
Gini Juric
Australian Liquor Marketers
Yas Jones
illion Pty Ltd
Priscilla Krikhoff
Yogeshwar Kashyap
Darrell Lea Confectionery Co. Pty Ltd
Queensland Rural and Industry Development Authority
Ainsley McKenzie
Collection House Group
Damien Kelly
Rexel Electrical Supplies Pty Ltd
Karen McLaughlin-Flemming Australian Liquor Marketers
Sarah Lawrence
Vinidex Pty Ltd
Daniela Molloy
Australian Liquor Marketers
Bill Mali
Paycepaid
Deborah Neill
Bulk Fuel Australia Pty Ltd
Evan Mallios
ALM Metcash
Christine Nelson
SLR Consulting Australia Pty Ltd
Rachiel Millares
Fackelmann Housewares
Valerie Ni
Christopher Norman
SMEG Australia Pty Ltd
Queensland Rural and Industry Development Authority
Nattaya Panassutrakorn
Euler Hermes Australia Pty Ltd
Louise Nixon
TurksLegal
John-Claude Pimentel
Metcash
Ellen Nowland
Rostron Carlyle Rojas Lawyers
Jigish Purohit
illion
Jennifer Paterson
Wyndham Destinations
Joseph Revoltar
illion
Michael Porter
Australian Liquor Marketers
Paul Sabapathy
Metcash Trading Pty Ltd
Joan Raffe
Finance One
Maria Said
Veolia Environmental Services
Jordanna Robertson
Heritage Bank Limited
Brent Sims
Commercial Credit Services
Candace Smith
Australian Liquor Marketers
Jason Tang
Cor Cordis
Nick Williams
Australian Liquor Marketers
Ping Yu
Euler Hermes Australia Pty Ltd
Darren Woodley
ATCO
94 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
New members
Christina Mircevska
Tyremax Pty Ltd
Carolyn Chhour
Creditsoft Solutions
Dean Murray
Kim O’Brien
Korvest Ltd
Steven Solomon
National Credit Insurance Brokers
Peter Stefanatos
Jeld-Wen Australia Pty Ltd
Andrew Tangman
Commercial Credit Services Pty Ltd
Tasmania
Olivia Timothy
National Credit Insurance Brokers
Cesar Lopez Choto
Tasmanian Collections Services
Amanda Warner
Independent Hardware Group
Frances Williams
Huon Aquaculture
April Wright
Independent Hardware Group
Victoria
Western Australia
Jean-Dominique Abraham
Moula
Andrea Candy
Zipform Digital
Shama Akbar
BMW Financial Services
Theodore Dana
Ryan’s Quality Meats
Simo Buzanin
Illion
Avril Doyle
Keystart
Ruwan Champika
Mitre 10 Australia Pty Ltd
Mark Gibson
Cor Cordis
Divine Cottier
Moula
Anthony Hansson
Keystart Loans Ltd
Eloise Cowan
National Credit Insurance Brokers
Tenille Hunter
Keystart
Caleb Delaney
TurksLegal
Craig Johnston
Keystart
Ashley Dilges
CLH Lawyers
Gary Kentfield
Keystart
Amanda Eales
Equifax
Donna Lopez
Capricorn
Julie Faull
Metcash Pty Ltd
Grant McMullan
Keystart Homes
Jessica Georges
Holman Webb Lawyers
Jeremy Nipps
Cor Cordis
Wes Gleeson
mecwacare
Blanche Venter
Angle Finance
Megan Hill
Independent Hardware Group
Lennart Hoegman
Moula
Mary Jalocha
Melbourne Racing Club
Gordon Jenkins
I am Gordon Jenkins
Mary Katsandonis
BMW Australia Finance
Alex Khaikilevitch
Moula
Yew Han (Eugene) Lim
Moula
Joel Manton
Study Loans
Andrew McGregor
Illion
Sarah McPherson
PageUp People
Mirella Mercuri
GWA Group
Dorothy Micallef
REA Group Ltd
International Singh Saron Susana
Debt Recovery and Administrative Services Limited
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 95
DIVISION REPORT
South Australia
AICM Marketplace Directory of services For information, options and pricing please contact Andrew Le Marchant on +61 2 8317 5052 or E: andrew@aicm.com.au COLLECTIONS AICM Divisional Partner
AMPAC Debt Recovery Level 5, 35 Clarence Street Sydney NSW 2000 Tel: 1300 426 722 Email: info@4ampac.com.au Web: www.4ampac.com.au Trust AMPAC, we guarantee to give you the right advice…… AMPAC provides a complete range of debt recovery and receivables management services to big business, government and thousands of SME’s nationally, so next time you are deciding how to deal with that difficult customer, pick up the phone and call us. We are ready to help you too.
COLLECTION SYSTEMS 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.
AICM Divisional Partner
COLLECTION SYSTEMS
INFORMATION
AICM Divisional Partner
AICM Divisional Partner
Paycepaid
CreditorWatch
Tel: 1300 438 729 Email: hello@paycepaid.com.au Web: www.paycepaid.com.au
GPO Box 276 Sydney NSW 2001 Tel: 1300 501 312 Web: www.creditorwatch.com.au
Paycepaid is an automated accounts receivable and invoicing solution. We automate your payment reminders to your customers via customisable Emails, SMS and IVR calls, saving you hours of manual work and getting you paid faster. l Create and manage invoices l Automate payment reminders l Customer self-serve portal: download invoices, make payments, see payment history l Can be white labelled and fully customisable
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
Equifax
Credit Solutions Unit 1/245 Fullarton Road, Eastwood SA 5063 Tel: 08 8418 1450 Email: gcrowder@creditsolutions.net.au Web: www.creditsolutions.net.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.
Tel: 13 83 32 Web: www.equifax.com.au 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
Trusted Insights. Responsible Decisions.
illion
CREDIT MANAGEMENT SOFTWARE
Tel: 13 23 33 Web: www.illion.com.au
Lane Communications 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.
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.
96 CREDIT MANAGEMENT IN AUSTRALIA • July 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
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.
July 2021 • CREDIT MANAGEMENT IN AUSTRALIA 97
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
TRADE CREDIT INSURANCE
National Supporting Sponsor
Trade Credit Risk Pty Ltd CreditSoft Solutions
National Credit Insurance Brokers
Tel: 1300 720 164 Email: info@creditsoft.com.au Web: creditsoft.com.au
Tel: 1800 882 820 (freecall) Email: info@nci.com.au Web: www.nci.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 (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
EDUCATION
FOUNDATION ABOUT THE FOUNDATION In late 2018, the Board of Directors of the Australian Institute of Credit Management (AICM) proudly approved the establishment of the AICM Education Foundation. The AICM Education Foundation has been established to provide financial assistance to credit professionals and students striving to continue their education. Funds are gathered from generous donations from the AICM and Credit Community, as well as fundraising activities and events of the AICM and it’s supporters throughout the year including but not limited to the annual AICM Conference. The Education Foundation will also bolster the vision of the AICM to be the primary learning, knowledge and information source for credit professionals and support the AICM’s objective of providing opportunities for growth throughout their careers. For more information on the foundation, make contributions or interest in supporting the Management Committee contact the AICM National office (aicm@aicm.com.au, 1300 560 996 or click here).
98 CREDIT MANAGEMENT IN AUSTRALIA • July 2021
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
