From the President

Trevor Goodwin LICM CCE National President

Welcome to the first edition of AICM’s Credit Management magazine for 2022. I thank members and their colleagues and our partners for your support in 2021. I hope you had an enjoyable Christmas and a happy New Year, and a relaxing holiday period for those who were able to take advantage of some well-earned annual leave.

As we enter 2022 it appears we face another year of uncertainly. The ongoing concerns with Covid has impacted on the Australian economy which is struggling to recover as strongly as anticipated. Consequently, we are starting to see an increase in payment arrears and defaults, collection activity and court actions with the expectation insolvencies will increase in 2022.

In addition, the COVID pandemic disruptions have posed significant challenges for supply chains globally. Multiple national lockdowns continue to slow or even temporarily stop the flow of raw materials and finished goods, disrupting manufacturing as a result. In particular a shortage of building materials worldwide resulting from COVID-19 disruptions, coupled with natural disasters from freak storms to bushfires, have heaped pressure on builders. On top of that, a labour shortage is making it difficult to find tradespeople, giving workers the power to command huge wages.

The labour market will still be constricted with a recent report by Morgan Stanley predicting the unemployment rate will decline to 4.2% by the end of 2022 and contracting even further in 2023 to near record lows and with worker shortages continuing to cause issues for business. 2021 was a year of accomplishment for the AICM despite the inability to hold as many face to face events as we had planned. The Institute was still able however to offer a number of important in person professional events in 2021, including seminars, the WINC and Awards functions as well as social events in most Divisions.

The final event for our members in 2021 were the prestigious Pinnacle Awards where we recognised a number of our credit professionals and business consultants for their outstanding work performance in 2021. Congratulations to all award winners and I look forward to seeing a strong field of nominations again in 2022.

With a gradual recovery in the economy and growth in business activity we are seeing a rise in credit enquiries and in 2022 sound credit management principles will be important for our AICM credit professionals. Now is an important time for credit personnel to be technically upskilled and qualified through the AICM learning and development courses and the Certified Credit Executive program.

AICM provide a range of qualifications and short courses for those who are just beginning their careers in credit or for those who are seeking the next step and to move into management roles. The 2022 calendar offers an exciting program of events including professional seminars, workshops, and economic updates, as well as a number of webinars which have worked well for the Institute under Covid restrictions.

Our website is a ready reference for you to not only stay aware of our policy submissions made on your behalf but a source to check your CCE qualification points as well as the calendar of our events and back issues of the Credit Management magazine.

In addition, members have access to ➤

the Credit Network Forum which enables them to connect to discuss issues impacting their profession and to seek advice from their peers. 2022 will be a year where it is likely a number of legislation policies will be introduced. Stay connected to the AICM and make full value out of your membership utilising our service to stay informed of the updates we will provide throughout the year. Check out AICM’s submissions page for the submissions we currently are involved with. Representing our members is an important part of the Institutes work and we’re always keen to hear your feedback. Government policy will be an important driver of economic activity next year.

In addition to our advocacy work with government departments we will continue to release our Insolvency and Risk reports during the year to update our members. These reports are written by an esteemed panel of experts in their respective fields.

Now is a good opportunity to update you on the progress of The Payment Times Reporting Scheme which commenced 1 January 2021 aiming to improve payment times for Australian small businesses. The Payment Times Reports Register (the register) was released on 30 November 2021. Under the scheme, large businesses and certain government enterprises must report their payment terms and times twice a year for small business. The Payment Times Reporting Regulator (the Regulator) publishes these reports on the Payment Times Reports Register. The register will be available as a downloadable data table of all reports screened by the Regulator from the first reporting period, 1 January 2021 to 30 June 2021.

In 2022 the Board will continue to progress its 2021-2023 strategic plan with the assistance of the National Office team. The strategic plan covers our priorities and initiatives to grow membership, enhance learning and development, lift professional standards, strengthen our voice and recognition and to improve operations.

The strategic plan explains who the AICM is and outlined our purpose, vision and promise to members through eight pillars including education, professional standards, advocacy, promotion of credit professionals, events, communication, governance and stakeholders. Maintaining the financial stability of the Institute and providing good governance will also continue to be an important role of the board.

I am excited to inform our members of the current work being done to develop and implement a new membership and integrated website which we are expecting to go live by 31 March 2022. This investment which will bring significant improvements and efficiencies will greatly benefit our members, National Office team and Divisional Councillors and will be at the forefront of our operations for years to come.

The Institute is holding a record number of events in 2022 highlighting the growth and strength of the Institute supported by an enthusiastic Board, a dedicated and hardworking National Office team and a diverse and passionate group of volunteers on our Divisional Councils. Our Councillors continue to be ambassadors for our social and educational events which we expect to be able to hold as face to face attendances in 2022. I thank them all for their contribution.

As we start 2022 we have some changes to the team in the National Office. Firstly Andrew Le Marchant, who is known to many of you, is transitioning to a 3 day a week project role initially focused on our website and systems update. I also welcome Claire Kasses who joins the AICM team as General Manager. Claire has a wealth of experience in aligned associations including the Institute of Professional Accountants, the Tax Institute and CPA Australia.

The AICM continues to be dynamic and at the forefront for our members, providing education, awards recognition and networking events, ensuring 2022 will be a successful year for the Institute. We look forward to working and engaging with you and our partners and hope to see many of you in attendance at the faceto-face conference in October at the Brisbane Sofitel Hotel.

As always, stay safe, and stay in touch. Here’s hoping for a brighter 2022.

– Trevor Goodwin LICM CCE National President

CASE STUDY: Changing the face of credit risk management at BlueScope

When you are running a multinational company, an efficient credit risk management process can help focus activity in the right place, potentially saving millions of dollars every year.

BlueScope is a provider of innovative steel materials, products, systems and technologies, headquartered in Australia and with operations spread across North America, Australia, New Zealand, Pacific Islands and throughout Asia. illion has been working with BlueScope since 2003.

The challenge

BlueScope identified a need for greater visibility of what was happening in their ledger to ensure this was included in their decisioning process. The company partnered with illion to develop a solution that would: z Reduce onboarding risks and make faster decisions. z Help manage risk during the entire customer lifecycle. z Define collection strategies.

Solution

Using a solution called Portfolio Insights, illion put 12 months of BlueScope credit limit applications under the microscope. The analysis confirmed that while the vast amount of credit limit applications represented low to average risk, several applications were sitting in the high to severe risk category, requiring immediate attention from BlueScope. illion provided: 1. Improved auto-decisioning utilising illion

Decisioning Solutions and illion market leading commercial bureau scores for both incorporated and unincorporated entities. 2. Portfolio Insight and monitoring to manage current customer risk and improve cashflow by focusing on the right areas and improving data quality. 3. Workshops and reviews to consider current processes and propose changes that would be broken down into manageable chunks to drive results quickly. BlueScope is using its enhanced view of risk now as an opportunity to update a number of processes. They have completed a data wash, built a policy and actively manage collection activities.

While it is still early days, BlueScope is well on the way to achieving: z A better understanding of the types of customer risks they have. z A 24-hour turnaround of 75% of new credit requests. z Reduced costs. z A refreshed vision of collections, including allocating credit controllers to the appropriate customers. z An understanding of the root cause of why collections issues are occurring – and a means of identifying them early and dealing with them.

“Working with illion has identified areas where we can improve our customer offering, starting with our new customer on-boarding process through to building bespoke collection solutions,” said Janice Thomason from BlueScope.

“We have a partnership with illion that challenges the status quo and continually reaches for the next level,” she said.

To learn more about how you too can partner with illion, please contact Craig Brooks, Corporate Director on 0458 578 768 or Craig.Brooks@illion.com.au.

Janice Thomason

Craig Brooks