Credit Management in Australia - April 2022 by AICM

Volume 29, No 2 April 2022

IN AUSTRALIA

The Publication for Credit and Financial Professionals

Economy enters a period of increased risk be prepared

This edition covers: l Inflation – the dark and stormy cloud l Understanding & Navigating the ‘Great Resignation’ l PPSR Registration vs Credit Insurance l PPSR Practicalities and Common Mistakes in PPSR Registrations

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Trusted Insights. Responsible Decisions.

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2 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Contents Volume 29, Number 2 – April 2022

Message from the President

Pathways How to trade with trusts masterclass Recent graduates Training calendar

8 9 10

12 Anneke Thompson

16 Wayne Clark

Economic Review Inflation – the dark and stormy cloud

By Anneke Thompson

Credit Management Credit Management in uncertain times

By Wayne Clark MICM, MAICD

Data – it’s the new gold

21 Barrett Hasseldine

21 Louis Tsang

Interview with Barrett Hasseldine and Louis Tsang from illion

Smart practices to help you optimise your credit control and strengthen cash flow

By Adrian Floate MICM

How do you know if you’re using quality data?

26 Adrian Floate

30 Roni Millard

By Roni Millard MICM

Consumer Credit Financial hardship information included in credit reporting from July 2022

By Michael Blyth

Michael Blyth

PPSR PPSR practicalities

38 Lynne Walton

By Lynne Walton MICM

PPSR Registration vs Credit Insurance

By Kirk Cheesman MICM

Common mistakes in PPSR registrations By Simon Read

41 Kirk Cheesman

44 Simon Read

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 3

Contents ISSN 2207-6549

Volume 29, Number 2 – April 2022

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 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

Fiona Reynolds MICM

Nikki Dennis

Lucy Tindal

PUBLISHER Nick Pilavidis FICM CCE | Email: nick@aicm.com.au CONTRIBUTING EDITORS NSW – Sam Pearlman MICM CCE Qld – Stacey Woodward MICM SA – Clare Venema MICM CCE WA/NT – Jeremy Coote MICM Vic/Tas – Michelle Carruthers MICM EDITOR/ADVERTISING Claire Kasses, General Manager Tel Direct: 02 9174 5727 or Mob: 0499 975 303 Email: claire@aicm.com.au EDITING and PRODUCTION Anthea Vandertouw | Ferncliff Productions Tel: 0408 290 440 | Email: ferncliff1@bigpond.com THE EDITOR reserves the right to alter or omit any article or advertisement submitted and requires idemnity from the advertisers and contributors against damages or liabilities that may arise from material published. CREDIT MANAGEMENT IN AUSTRALIA is published by the Australian Institute of Credit Management, Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065. The views expressed in CREDIT MANAGEMENT IN AUSTRALIA are not necessarily those of Australian Institute of Credit Management, which does not expect or invite any person to act or rely on any statement, opinion or advice contained herein (whether in the form of an advertisement or editorial) and neither the Institute or any of its employees, agents or contributors shall be liable for any opinion contained herein. © The Australian Institute of Credit Management, 2022.

JOIN US ON LINKEDIN

Click Here 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

4 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Michelle Shackles

John Carrello

Andrew Blundell

Legal The High Court widens the permitted use of public examinations

By Fiona Reynolds MICM and Lucy Tindal

Leadership and High Performance Credit & collections: Understanding and navigating the ‘Great Resignation’ in Australia

By Nikki Dennis MICM

Insolvency Small Business Restructuring Plans – a tool for the future?

By Michelle Shackles and John Carrello MICM

Preference Claims and Insolvency Indicia – when is a company insolvent from the court’s perspective?

By Andrew Blundell

Member Anniversaries

Volume 29, Number 2 – April 2022

62 SA: Nathan Schwarz, Lesley King (both Deloitte), Krystal Jones (Homestart) and Neil Fennell (SA Division President).

68 Qld: Renee Dobson (NCI), Kirsty Gray (Stoddarts) and Maria Tisdell (NCI) all celebrating their 5 year membership milestone.

Contents

WA/NT: Our presenter Daniel Deplazzi from Deloitte Access Economics.

71 Vic/Tas: Allan Kawalsky of event supporter TurksLegal welcomes members and guests to the Economic Breakfast.

Division Reports

New members

62 66 68 71 75 82

Marketplace

South Australia Western Australia/Northern Territory Queensland Victoria/Tasmania New South Wales

75 NSW: Our amazing MC Balveen Saini with a full house of WINC attendees.

For advertising opportunities in Credit Management In Australia Contact: Claire Kasses, General Manager Ph: 1300 560 996 E: claire@aicm.com.au

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 5

aicm

From the President

Trevor Goodwin LICM CCE National President

elcome to the latest edition of

that demonstrates our value to members and

the AICM Credit Management

stakeholders. Our investment in technology helps

magazine. Since my last

members achieve their business and career goals. It

President’s report there has

will provide our members with a better experience

been a State election in South Australia with the

and assist with National Office administration

opportunity for a new government to implement

efficiencies. Thank you to the National Office team

their policies, a Federal Budget which has been

and the developers on making the transition to a

well received including some positive outcomes

new website run so smoothly. I encourage members

for credit professionals and a federal election

to visit the website and take in what it provides us.

date announced. In an economy emerging from

The importance of our volunteer Councillors in

the Covid-19 pandemic and with many businesses

our State divisions cannot be understated, and I

and individuals suffering financial hardships we

thank them for their dedicated support. To assist

are starting to see a rise in insolvencies with

them in their duties we have recently revised the

companies such as Probuild Group and Condev

Councillors Induction document which assists new

Construction suffering from the effects of such

Councillors in their role with the Division Councils.

issues as cost increases badly reducing margins,

The divisions are also looking for additional

a supply chain crunch and labour shortages.

volunteers to come on board at their next AGMs in

Floods on the east coast of Australia, the

July. If you have a genuine interest in supporting the

Russian invasion of Ukraine, an ongoing squeeze

AICM by being a Divisional Councillor, and in the

on materials and rising prices, a skills shortage,

process add worthwhile experience and broaden

and an expected crackdown on tax debt will only

your skills in your own professional development,

exacerbate challenges which could force more

please speak with your State President or with the

companies to the wall over the next few months.

Institute’s CEO, Nick Pilavidis.

Despite this gloom the AICM continues to evolve

It is pleasing to inform you we are achieving

with the times and provide valuable services and

record participation in our Training and Education

resources to our members and their colleagues,

programs. The AICM is a leader in delivering quality

which offers the benefit to organisations of having

credit related training programs to our members

well educated and qualified credit personnel

and their colleagues including seminars, economic

protecting their Accounts Receivable asset. The

updates, Certificates III and IV and Diploma, RTO

AICM assists credit professionals in being at the top

courses online, credit toolboxes, workshops and

of their profession through our education, advocacy,

webinars.

information and networking opportunities. Following Board approval to commission

We are currently holding our Insolvency and Risk seminars in all divisions. For four consecutive

a new Website and Association Management

years, the Risk seminars have been developed

System our National Office team took to the

by a national committee of credit, legal and

challenge with great zest and in conjunction

insolvency professionals, in collaboration with the

with web programmers were able to smoothly

Australian Restructuring Insolvency and Turnaround

implement the new platform within a few months.

Association (ARITA). Our experts this year have

The redesign brought a number of enhancements

identified where credit and insolvency risk will

and new features to provide a modern website

arise while discussing how to manage and forecast

6 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

From the President

aicm

risk, adapting to new reforms and the changing

Sofitel Brisbane from Wednesday 19 to Friday 21

landscape, and understanding emerging trends.

October 2022. The Conference is where credit

New to our training programs this year is the

professionals meet to connect, update and further

introduction of the Institutes’ “Trading with Trusts

their understanding of best practices in credit

Masterclass”. This course has been developed to

management. The annual conference has been held

provide a sound foundation for the operation of

for over 20 years and is Australia’s largest gathering

trusts from the viewpoint of a credit provider and

of credit and finance professionals. Attendees will

built around certain due diligence points when

be able to hear from peers and thought leaders

extending credit and trading with Trusts. This

to ensure your organisation has adapted to the

includes understanding how Trusts impact on

evolving business and economic landscape and are

operations and recognising the risks in trading with

informed to manage the challenges that lay ahead

Trusts.

of the profession.

A great success this year has been the inaugural

To ensure the Institute maintains its strong

‘WINC’ webinar where a well credentialled panel of

membership base we are starting our membership

female executives reflected on the challenges and

renewal campaign in May this year which will

growth opportunities of leading through uncertain

reinforce the benefits of what the Institute provides

times. Three more WINC webinar events are planned

to our members. Renewal invoices will be sent out

for 2022. A prestigious event on the AICM calendar

in May allowing members a longer lead time in

is the Women in Credit (WINC) which continues to

organising their renewal.

go from strength to strength in attendance and in

We continue to work closely with our Partners

the quality of the venues and speakers. The Women

to develop and promote the credit profession in

in Credit initiative was established by the AICM in

Australia, to our members and the broader credit

2015 to provide information and career development

industry. Our Partners gain recognition and industry

opportunities to women at all levels and ages. AICM

relevance by the display of their logos on AICM

are committed to recognising and progressing

banners, in AICM publications and flyers and on the

women in the credit industry and strive to provide

AICM website.

more opportunities to enhance careers. It is pleasing to have seen a return to face-to-

The Institute continues to perform well and remains financially sound while progressing our

face events with good attendances at AICM events

Strategic Plan as evidenced by the implementation

in each Division, despite the ongoing disruption

of new Website and Association Management

from COVID-19. There has been a great mix of social

System. Our membership base remains strong, and

events including the renowned Victoria Division Golf

we have welcomed a number of new members

Day, Adelaide Fringe function along with enjoyable

in the past few months. Our relationship with

functions in Sydney and Melbourne. Unfortunately

our Partners is well entrenched. I look forward to

the close to sold out social night in Brisbane has

the Institute continuing to grow from strength to

been postponed due to the impacts of floods. There

strength.

has already been great attendance and feedback from the Economic Breakfast sessions sponsorsed

Until next time, stay safe and well, and involved with the Institute.

by Turks in NSW, Qld, Vic/Tas and WA divisions with SA to follow. AICM’s National Conference will be held at the

– Trevor Goodwin LICM CCE National President

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 7

aicm

Pathways

How to trade with trusts masterclass Building on the strength of AICM’s existing toolbox and workshop learning programs, we are pleased to launch the first of our masterclasses, how to trade with trusts. This masterclass has been developed to give all levels of credit professionals the understanding of foundational principles involved with trading with a trust. It provides detailed information on why a trust would be created and how to best protect your organisation’s exposure including: z Detect when you are dealing with a trust z Identify the correct styling for the account z Distinguish who the trustee and beneficiaries are z Understand the trust entity and its impact on operations z Recognise the risks in trading with trusts.

This masterclass develops the necessary platform to understand the interaction of trusts and other areas of credit management including risk assessment, PPSR, collections, legal enforcement, and insolvency. Date: Price Member: Price Non-member: CCE Points:

Friday 10 June 2022 $320 (incl. GST) per masterclass $415 (incl. GST) per masterclass 4

Register now for How to Trade with Trusts Masterclass via our website: Masterclasses (aicm.com.au) More information Register now

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

FNS40120 – Certificate IV in Credit Management Tiana Spears

New South Wales

Regional Australia Bank

Susan Barnett

New South Wales

SR Group

Ilona Ter-Stepanova

New South Wales

Optus

Statement of Attainments Stacy Ridge

NSW

• FNSORG411 – Conduct individual work within a compliance framework

Smeg Australia

Ann Nouza

Vic

• FNSCRD401 – Assess credit applications

N/A

Vesna Milosevski

NSW

• FNSCRD401 – Assess credit applications

Hy-Tec

Kathy Thomson

QLD

• FNSMCA311 – Collect debts

BGW Group

Natasha Morris

NSW

• FNSORG512 – Develop, implement and monitor policy and Snap-on-tools procedures

8 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Unlock the potential in your credit career credit staff

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

Diploma of Credit Management

Certificate IV in Credit Management

Certificate III in Mercantile Agents

FNS51520

FNS40120

FNS30420

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

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

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

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

Call 1300 560 996 or vist aicm.com.au

aicm

Pathways Upcoming training Date

Type

Topic/event name

Tuesday 10 May 2022 Wednesday 11 May 2022

Elective for Certificate III and core unit of Certificate IV

FNSCUS402: Resolve disputes

Thursday, 12 May 2022

Toolbox

Fundamentals of Credit

Friday, 13 May 2022

Workshop

Understanding Bankruptcy

Tuesday, 17 May 2022 Wednesday, 18 May 2022

Core unit of Certificate IV

FNSCRD401: Assess credit applications

Thursday, 19 May 2022

Workshop

Understanding Corporate Insolvency

Tuesday, 24 May 2022 Wednesday, 25 May 2022

Core unit of Diploma

FNSCRD511: Respond to Personal Insolvency Situations

Thursday, 26 May 2022

Toolbox

Collect with confidence

Tuesday, 7 June 2022 Wednesday 8 June 2022

Core unit of Certificate III

FNSMCA314: locate individuals

Thursday, 9 June 2022

Workshop

Understanding Financial Hardship

Friday 10th June 2022

Masterclass

How to trade with trusts

Tuesday, 14 June 2022 Wednesday, 15 June 2022

Core unit of Certificate IV

FNSCRD402: Establish and maintain appropriate security

Thursday, 16 June 2022

Toolbox

Understanding Credit Risk

Tuesday, 21 June 2022 Wednesday, 22 June 2022

Core unit of the Diploma

FNSCRD515: Respond to corporate insolvency situations

Thursday, 23 June

Workshop

Personal Property Securities

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).

10 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Young Credit

Professional of the Year 2022

Applications for the Young Credit Professional of the Year are now open!

APPLIC ATION S

Do you know a talented young credit professional who deserves recognition? The YCPA is open to both members and non-members of AICM who are working in the Credit Industry and who are under 30 years of age as at 30 June in the year of application. Whether you work within the credit function of a business or in any of the many related Credit Professional roles in the Credit Industry you are eligible to enter. HOW TO APPLY Applications close 31 May 2022 and can be submitted by email: aicm@aicm.com.au

For more information and entry requirements CLICK HERE or phone 1300 560 996

CLOSE 31 MAY

YCP State Awards VIC NSW QLD SA WA

Friday, 8 July 2022 Thursday, 21 July 2022 Friday, 29 July 2022 Thursday, 11 August 2022 Thursday, 18 August 2022

PROUDLY SPONSORED BY

Economic Review

Inflation – the dark and stormy cloud By Anneke Thompson*

Reflecting their rising risk profiles due to Australia’s higher inflationary environment, the Food and Beverage Services, Arts and Recreation Services and Transport, Postal and Warehousing Industries all recorded an increase in their probability of default. As inflation works through the economy, it is expected that consumers will reduce spending on discretionary items. Cafés, restaurants and the arts and entertainment sectors are all typically areas where consumers choose to spend less as their discretionary income declines.

What is causing inflationary pressures, and what can we expect going forward?

Anneke Thompson

High inflation is currently a global phenomenon, with various structural elements combining to create a perfect inflationary storm. High fuel costs as a result of the war in Ukraine is one major factor, impacting everything from shipping, trucking, air freight and manufacturing. Ongoing production and staffing issues associated with the Omicron wave are causing short term havoc. And global labour mobility has been severely impacted by COVID-19, with countries that typically import a lot of labour are reporting severe productivity constraints as they make do without these employees. Compared to other OECD nations, Australia’s inflationary curve is still relatively modest.

12 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

The USA and UK are recording inflation between four and seven per cent. Combined, the OECD nations reached an average inflation rate of almost five per cent by Q4 2021. The steepness of the curve is particularly worrying, and Australia will look to avoid replicating other OECD nations by tightening monetary policy, likely very soon.

What does inflation mean for Consumer confidence? Rising prices and impending interest rate rises are weighing on consumers’ minds as much as COVID-19 did when it first went global in early 2020. In 2020, consumer confidence plummeted as the shock of the pandemic set in. However, massive amounts of government stimulus quickly reversed the trend, and, like it or not, most consumers settled into a life of online shopping, home renovations and lots of cooking! In Australia and the OECD, consumer confidence peaked around mid 2021, before the Delta wave arrived, and we realised that COVID-19 was not going away any time soon. Since then, the trajectory has been progressively worsening, as rising prices, Omicron and war in the Ukraine all add up. Importantly, most consumers have no come to expect that their home and personal loans are about to get more expensive, and this will curtail discretionary spending going forward.

Economic Review

“High inflation is currently a global phenomenon, with various structural elements combining to create a perfect inflationary storm.”

Source: OECD

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 13

Economic Review

Consumer confidence in Australia is sitting above the USA, UK and OECD average, however, we are not as far into our inflationary cycle, and have yet to feel a cash rate increase. So, expect that this indicator will continue to worsen.

What does this mean for the credit outlook for Australia’s industry sectors? Our February 2022 industry data recorded a significant rise in the probability of default for the Food and Beverage Services sectors, which rose from 5.7 per cent to 6.7 per cent over the month. This was the highest probability we had calculated in some time, and once again, probability of default for this sector has risen, now

“Consumer confidence in Australia is sitting above the USA, UK and OECD average, however, we are not as far into our inflationary cycle, and have yet to feel a cash rate increase. So, expect that this indicator will continue to worsen.” sitting at 7.2 per cent as at March 2022. This figure sits well above all other industries, with the Arts and Recreation sector being the next most vulnerable at 4.9 per cent. The Food and Beverage Services sector is facing numerous headwinds, even though turnover will be well up after years of COVID disruption. Labour, food, utilities and borrowing costs are all

rising for this sector, while at the same time consumers are easily able to substitute eating a meal out at a restaurant for eating at home. This means that demand is likely to wane, particularly after the cash rate does finally rise. In a similar vein, the Arts and Recreation sector will feel the burden of consumers reducing their discretionary spending as we move through 2022.

Source: OECD

14 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Economic Review

Source: CreditorWatch BRI March 2022

The March 2022 Business Risk Index shows that the three industries with the highest probability of payment default over the next 12 months are: 1. F ood and Beverage Services: 7.2 per cent (up from 6.7 per cent) 2. A rts and Recreation Services: 4.9 per cent (up from 4.6 per cent). 3. T ransport, Postal and Warehousing: 4.8 per cent (up from 4.5 per cent). At the other end of the spectrum, Health Care and Social Assistance maintained the lowest probability of default, at 3.3 per cent. Agriculture, Forestry and Fishing remains the sector with the second lowest probability of default,

at 3.6 per cent. The challenges of moving goods around the globe means that the local manufacturing sector now comes in as the sector with the third lowest probability of default (3.7 per cent), overtaking Wholesale Trade. The March 2022 Business Risk Index shows that the three industries with the lowest probability of payment default over the next 12 months are: 1. H ealth Care and Social Assistance: 3.3 per cent (steady at 3.3 per cent)

Payment arrears is still a particular problem for the construction industry, with 11.8 per cent of the sector in 60 days or more arrears. This proportion is by far and away above any other sector, and partially represents almost the normalisation of late payment in the industry. As such, even though arrears are a problem in the construction sector, the probability of default rate is still a relatively low 3.9 per cent.

2. A griculture, Forestry and Fishing: 3.6 per cent (steady at 3.6 per cent). 3. M anufacturing: 3.7 per cent (steady at 3.7 per cent).

*Anneke Thompson Chief Economist CreditorWatch T: 1300 501 312 www.creditorwatch.com.au

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 15

Credit Management

Credit Management in uncertain times Global corporate insolvencies are forecast to increase by 33% in 2022 as fiscal support is phased out. This is the prediction from research undertaken by Atradius on the effect of financial and regulatory stimulus measures on insolvencies. By Wayne Clark MICM, MAICD*

Wayne Clark MICM, MAICD

Findings in the report published in October 2021 state – “In Europe, countries like France, Belgium, Italy, and Spain enacted laws in 2020 that temporarily froze bankruptcy proceedings or declared bankruptcies inadmissible. Outside of Europe, Australia has increased the debt threshold for companies to declare bankruptcy. All those countries witnessed a sharp decrease in insolvencies in 2020. Countries that made fewer or no changes to their insolvency laws generally recorded a smaller decrease in insolvencies. Examples are Sweden, Denmark, the Netherlands, Ireland, Japan, and the United States. In addition to insolvency law changes, fiscal support measures have also played a crucial role in keeping insolvency levels low. The most effective form of government measures have been direct fiscal spending and tax breaks. European countries with extensive fiscal support measures are Germany, France, Austria, Belgium, the Netherlands, and the United Kingdom. Outside of Europe, the United States, Canada, Australia, and Japan have all implemented substantial fiscal support packages,

16 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

which contributed to very low insolvency levels in 2020 compared to GDP contraction.” (Extract from Atradius Economic Note, 7/10/2021)

What will this mean for Australia? The graph above shows that Australia has done better than most nations when it comes to preventing a flood of business failures during 2020/2021. This suggests that stimulus measures have been effective in reducing insolvencies thus far. However, the majority of these measures have now ceased. The unprecedented fiscal stimulus and the soft handed approach by the ATO have been driving the low insolvency numbers. However, insolvency numbers are on the rise. ASIC data shows a 13.7% increase in the six months to December 2021 compared to the same period in 2020. In January 2022, corporate insolvencies for all sectors was 35.4% higher than January 2021. For the construction sector, insolvencies were 100% higher.

Insolvency forecast Australia – all industries ASIC data for January 2022 showed that insolvencies were 35.19% higher than last year, which suggests

Credit Management

Insolvency growth, % change 2021 YTD vs 2019 Spain Czech Republic Romania South Africa Hong Kong Turkey Finland Switzerland Russia Canada Italy United States Norway France Sweden Germany Poland Denmark Austria United Kingdom Ireland Japan New Zealand Brazil Belgium Netherlands Portugal Australia Singapore South Korea

-9 -10 -10 -11 -13 -14 -16

-21 -21 -21 -22

-41 -43 -44 -47 -51

-60

-50

-40

-6 -6

7 6

11 10

that the Atradius forecast may be accurate. Corporate insolvencies in 2021 were 44% below 2019 levels. An increase of 33% would mean corporate insolvencies could rise by 1,644, to finish around 6,155 by the end of 2022.

ATO intensifies debt recovery actions

-27 -27 -28 -32 -25

-30

-20

-10

Source: Atradius

Insolvency Statistics Actual & Forecast (ALL) Jan

Feb

2020

2021

Avg

2022

667

342

505

671*

389

400

364

449

407

275

354

279

325

397

192

Mar

683

439

May

429

431

Jul

373

Apr Jun

Aug

410

Sep

298

Nov

Oct

Dec

423

295

260

561

746*

430

572*

398

529*

315

531*

Insolvency forecast Australia – construction industry

418*

There are already signs that insolvencies are on the rise in the construction industry. BICB’s forecasts that insolvencies will increase by around 374 in 2022 to finish around 1,346 by the end of the year. This will still be lower than the preCovid five-year average of 1,458. ➤

306

406*

306

435

371

493*

4943

4511

419

302 441

4727

For eighteen months the Australian Taxation Office (ATO) put a halt on its debt recovery action. During this time, corporate tax debts have been steadily increasing. In November 2021, the ATO made a statement, warning that debt recovery action would recommence with a ‘tailored approach’ to recover the estimated $55 billion tax debt. We have recently noticed an increased use of Garnishee Notices and Director Penalty Notices as a mechanism to recover the outstanding debt. This is a sure sign that the ATO debt recovery team is now taking a more aggressive approach. We also expect to see a return to the statutory demand court process in the second half of 2022.

541*

313

462

“For 18 months the ATO put a halt on its debt recovery action. During this time, corporate tax debts have been steadily increasing.”

402* 586*

6155* Source ASIC & BICB forecast *

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 17

Credit Management

Construction

AUST 2022 Forecast

2022 Actual

Variance

Jan

Feb

2021 Actual

ASIC 5 Yr. Avg

2021 % of Avg

2022 % of Avg 70.35%

37.69%

101

121

83.20%

Mar

116

145

64.05%

Apr

109

124

70.85%

May

122

108

138

78.15%

Jun

132

139

69.99%

Jul

115

121

61.16%

Aug

125

65.39%

Sep

116

71.43%

Oct

114

112

74.87%

Nov

135

132

125

105.94%

Dec

111

112

111

100.54%

YTD Total

1346

1084

1458

74.35%

Source: BICB

Debt above 60 days trend

Construction industry trend

Probuild Group

It has been interesting to observe how the debt percentage above 60 days has decreased during the Covid era. This trend is most likely the result of the stimulus measures and the tight supply chain issues.

Since 2018 construction industry insolvencies as a percentage of all insolvencies has been increasing. The five-year average, pre Covid was 17.91%. This has risen to 24.56% at January 2022. We expect this trend to continue.

Monitoring customers through credit reporting agencies or trade bureaus can alert you to deteriorating payment trends, courts actions and other adverse information. By way of example, the

18 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Credit Management

recent Probuild collapse marked one of the largest insolvency appointments of recent times and is likely to cause significant flow-on effects throughout the building industry. In the twelve months preceding the Administrators appointment, a total of 14 ‘Red Flag Alerts’ were generated and sent to BICB

members in relation to Probuild Constructions Australia. The graph below shows BICB/ Alares ‘Risk Tracker’ scores for Probuild Constructions (Aust) twelve months prior to the collapse – this entity ranked among the highest risk categories for both latepayment and insolvency. PROBUILD CONSTRUCTIONS (AUST) PTY LTD

ranked in the bottom 0.5% of all industry participants.

Warning signs As with Probuild, most industry insolvencies are preceded by early warning signs. Two of the leading indicators of financial stress and insolvency are payment patterns and Court actions. ➤

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 19

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Source: BICB Debtor Ageing Analysis

Payment patterns The graph above shows payment patterns to BICB members trading with Probuild over a twenty-four month period.

Court actions Among the QLD building industry insolvencies in the past 5 years: z 68% were preceded by 1 or more Court actions z 53% were preceded by 2 or more Court actions z 34% were preceded by 3 or more Court actions z 25% were preceded by 4 or more Court actions The most common types of Court actions that preceded these insolvencies are: z Money owing claims z Winding up applications

z Building & construction disputes z Workplace injury/Workcover/ negligence claims z Fair work/industrial disputes ‘Risk Tracker’ was jointly developed by BICB (Building Industry Credit Bureau) and Alares. ‘Risk Tracker’ combines Alares Court and insolvency data with BICB’s payment data to rank 100,000+ building industry participants based on their risk of latepayment and risk of insolvency.

Understanding the current and future trading economy It is vitally important for credit managers to be aware of the prevailing economic and trading conditions, as these will have an impact on the overall risk of doing business. The prevailing sentiment

amongst insolvency specialists is that insolvency and restructuring work across a range of industry sectors is going to ramp up during 2022. This sentiment is reinforced by the recent ASIC reported insolvency numbers.

*Wayne Clark MICM, MAICD Executive Director Building Industry Credit Bureau E: wayne@bicb.com.au T: 0402 244515 SOURCES — Theo Smid, Senior Economist Atradius —

BICB & Alares Risk Tracker data

—

BICB trading data ‘Debtor Ageing Analysis’

—

BICB Article published 2 March 2021 www.bicb.com.au

—

ASIC Series 1A Companies entering external administration - by industry

—

Construction Industry Facts (Updated 2020) - Back to Basics

“It is vitally important for credit managers to be aware of the prevailing economic and trading conditions, as these will have an impact on the overall risk of doing business.” 20 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Credit Management

Data – it’s the new gold As the saying goes, ‘data is the new gold’… and there is certainly a rich seam running through Australia’s business sector. Two people in the ‘data gold mine’ are Barrett Hasseldine and Louis Tsang from illion. They are accomplished Data Scientists who spend many hours digging out nuggets of truth and polishing them for credit managers in Australia, New Zealand, the UK and Canada. We took some time to catch up with both of them to understand the important role that data now has for credit managers. LOUIS TSANG Some people have described COVID-19 as the ‘great disruptor’. What do you think it has done for credit managers in the lending space? Is there more ‘hidden risk’ now?

Louis Tsang

COVID-19 really has disrupted how consumers and businesses manage money and credit – and some of the trends we have observed over the last 12-24 months are here to stay. Buy-now-pay-later schemes have exploded in popularity

over the past 24 months, with a myriad of providers offering their own slightly different products – to the extent that some of these products would even raise a chuckle (“Drink Now Pay Later” comes to mind). BNPL doesn’t seem like it is replacing traditional credit card offerings in any permanent manner, but it appears to be meeting the needs of particular groups wanting to spend without larger immediate outlays. What is certain is that BNPL is here to stay. I think product and credit managers ➤

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 21

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“Credit managers should also consider further supplementing their current credit underwriting processes to ensure they capture all the additional and hidden risks that consumers are facing now. COVID-19 triggered drastic actions from governments and banks in an attempt to bring about some stability in the economy ...” will work out how to decipher why the BNPL structure is so successful and implement that into future credit products. Credit managers should also consider further supplementing their current credit underwriting processes to ensure they capture all the additional and hidden risks that consumers are facing now. COVID-19 triggered drastic actions from governments and banks in an attempt to bring about some stability in the economy; unprecedented amounts of government support, deferrals of loan repayments, lowest cash rates in history. With the economy now reopening, inflationary and cost pressures will eventually push interest rates up and credit managers and lenders will need to balance their decisions from a risk and growth perspective. Disruption to supply chains and hours worked (because of sick leave) will impact income – and the aftermath of the floods and the current Ukraine-Russia crisis is going to add even more uncertainty.

You joined illion from a major bank two years ago, where you worked as a leader in retail analytics and insights. How different is it being on the other side of the fence? Having had the opportunity to work on different projects with many different types of organisations over the last two years, I’ve realised everyone is in a similar boat! Everyone deals with data issues, budget considerations, people turnover and process inefficiencies, albeit dealt with slightly differently depending on levels of sophistication and team culture. But on the up side, and putting my “data” hat on, I have found what is in common is the desire of almost all organisations to improve their understanding of their own customer base, especially in the current environment. A lot of the credit managers we work with have found value in coupling their own internal data with the alternate and rich data sources we offer (for example supplement portfolio data with illion Spend Data or illion Commercial Trade Data).

22 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Your LinkedIn profile describes you as ‘passionate about data and the value it can provide the modern world’. How do you think credit managers can utilise the power of data more effectively? I think many people have realised they collect – or have access to – a lot of data because of their daily operations, but the challenge is how to ensure they’re utilising the data they already have to its fullest potential. To draw actionable insights and “quick wins” from data, companies need to make sure that the data they collect is stored properly and can be digested easily, allowing for quicker-to-market actions. A lot of inefficiencies arise from the fact that projects need to spend too much time simply putting the data in the right format. Organisations should self-reflect on the capability they have and whether it is appropriate for their objectives. Working with millions of records mean Excel is probably not the right tool any more. Leaders often ask themselves and their organisation, “do we need to invest in cloud computing”, but a more pertinent question is, “do you know what cloud computing is?” Investing and developing your current workforce and leaders will help you make the right decisions. Finally, to fully utilise data’s potential requires commitment from the entire organisation, not just a “data” team or technically inclined areas. Product and Credit Managers need to understand what data they have available, and have the flexibility and governance processes to execute business strategies swiftly. IT functions need to support the organisation with enterprise solutions that are scalable and focus on the strategic/long-term goals. Marketing and client facing functions need to upskill to communicate insights in a layman-friendly manner. Organisations that embrace data holistically will see benefits without much resistance – make data one of your organisation’s focus/values!

Credit Management

How important is data accuracy and reliability? Data reliability is probably more important if an organisation is trying to execute a strategy based on insights drawn from data. There are ways to deal with systematic error that arise from less accurate data, but dealing with random/uncertain errors with respective to business decisions might be a little more difficult (e.g. if my watch is always giving me a reading that is 5 minutes late I could probably arrive at events 5 minutes early, but if my watch randomly stops, it’ll probably ruin my day much quicker!). Having said that, my philosophy on this has somewhat evolved over the past decade and will continue to do so with new advances – and depending on the purpose which I use data for. One thing is certain though – there is no such thing as Perfect Data. System issues, data definitional

inconsistencies, data delays, operational red tape has made that concept into a pipe dream – I think most of my data colleagues will concur!

What do you do when you’re not in the data mine? Aside from spending time with my family and navigating the challenges that arise from primary school (very glad home schooling is a thing of the past, fingers crossed), I’m a huge tennis fan and really looking forward to how the new cars are going to perform in the upcoming F1 season. As an avid aviation enthusiast, I’m also looking forward to get back in the chopper for some scenic flying, although I think fuel prices skyrocketing will likely ground me for the foreseeable future. And shamelessly, I have enjoyed the large number of LEGO sets that have been released because of COVID-lockdowns. ➤

“Data reliability is probably more important if an organisation is trying to execute a strategy based on insights drawn from data. There are ways to deal with systematic error that arise from less accurate data, but dealing with random/uncertain errors with respective to business decisions might be a little more difficult...” April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 23

Credit Management

BARRETT HASSELDINE As a mathematician, you work at the cutting edge of analytics, machine learning and data science. What does a typical day ‘in the office’ look like for you? As Head of Modelling, my team builds and maintains all of illion’s analytic products, such as our Consumer and Commercial Credit Ratings. We also deliver research projects that explore a range of analytic challenges like model interpretability, and industry challenges such as the long-term decline of the Australian credit card market. Other than the regular morning stand-up with my team, every day is a combination of thinking about how we can improve our current scores, supporting clients to achieve their business aims, and thinking about what new analytical products the market needs – and which ones we have the capability to deliver.

You have worked in credit analytics for most of your career. Has your field changed much over the past ten years – and what’s the next big thing credit managers can expect? There have been huge changes over the past decade, especially from a tech perspective. SAS was the coding language of choice, which has slowly been replaced by Python. Analysis used to be performed using an analyst’s local computer, whereas now it is more commonly server or cloud-based using much greater compute power and GPUs. These advances have enabled credit analysts to not only build their own models but also to implement their own models, which can reduce implementation time/cost/complexity. The evolving tech stack has also allowed use of nonlinear modelling techniques such as XGBoost and Deep Learning to become more commonplace, replacing linear models in some low-risk use-cases. Most credit providers are not yet comfortable to use these models to derive high-impact decisions, but I expect this will change over the coming decade.

“Over the past decade, many credit providers have digitised their application flows and shifted away from human-entered information, preferring to take friction out of the application flow by relying more on 3rd party data sources.” 24 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Barrett Hasseldine Over the past decade, many credit providers have digitised their application flows and shifted away from human-entered information, preferring to take friction out of the application flow by relying more on 3rd party data sources. This change reduces human-based data capture, delivers 24-7 availability, and is often trusted more than unvalidated, human-entered information for example from a credit application form. A specific example of 3rd party data which I see as the next big wave of innovation in credit scoring is digitally sourced bank statement data. It is starting to blossom now and I expect this trend will only grow as Open Banking becomes commonplace.

You and your team spend your days thinking how you can support credit professionals achieve their business aims; what are some of the ways you do this? The illion Transaction Risk Score is a great example. It was an idea born from credit professionals’ desire to glean insights from the rich data generated through online banking. Credit professionals knew that the types of transactions that consumers were involved in could give insight into their character and capacity to pay. Utilising data and analytics, we bring this wealth of insight into a score like any other credit score, but it is entirely based on the information contained within a customer’s online banking data. As an example of how a transaction score differs to a bureau score, a bureau score factors in whether a person has made their credit card repayments over the past 2yrs. A transaction score will look at the most recent 3-6 months of transaction data to analyse the dollar amount of each credit card repayment, how

Credit Management

large it was relative to income, what portion of the credit card limit is utilised, whether the repayments were made via Direct Debit or not, and what the consumer has been spending their money on. Credit bureau data is limited in scope but is highly curated and available over a multi-year time horizon; it is great for understanding a customer’s long-term credit risk. Transaction data is full of rich insights but is high-volume, messy, and based on a few recent months of data. As such, combining bureau and transaction scores delivers the optimal outcome of understanding both long-term risk trends and a ‘finger on the pulse’ of a customer’s current financial situation. Transaction

scoring however comes with a steep learning curve of how to build and implement such a score in real-time. The illion Transaction Risk Score helps credit providers to start getting value from transaction scoring without the risk and cost of a multi-year IT project.

What do you and your family do when you’re not on the tools? My brain gets a great workout during office-hours, so when I’m not working I enjoy hitting the gym to give the rest of my body a work-out too. I also love to visit Morning Peninsula with my wife and kids to go bushwalking and rock-pooling.

“Credit bureau data is limited in scope but is highly curated and available over a multi-year time horizon; it is great for understanding a customer’s long-term credit risk. Transaction data is full of rich insights but is high-volume, messy, and based on a few recent months of data.”

Trusted Insights. Responsible Decisions.

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2022 National Conference President’s Dinner on Thursday 20 October 2022

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Credit Management

Smart practices to help you optimise your credit control and strengthen cash flow By Adrian Floate MICM*

Adrian Floate MICM

When you’re running a large operation with hundreds of invoices processed each month, the resources required to manage your payments grow quickly, especially when ageing receivables become a problem. While customers may not pay their invoices for various reasons, it happens too often, causing a range of challenges and increased risk. Over the last two years, 60 per cent of businesses experienced increased debt management costs, and 54 per cent of companies say that B2B credit sales result in late payments. Not only is debtor management time-consuming and burdensome for accounts receivable teams, but late payments also restrict cash flow and increase non-payment risk. Fintech solutions provide companies with the infrastructure to manage this risk by optimising and strengthening each financial

touchpoint from credit assessment and customer onboarding to issuing invoices and collecting payment.

Automate your accounts receivable and implement e-invoicing For finance teams addressing debtor and cash flow issues, automating your accounts receivable systems and processes is an excellent place to start. According to the Australian Taxation Office (ATO), it costs a business over $30 to process a paper invoice, $28 for a PDF invoice shared via email, and just under $10 to process an e-invoice. By switching to e-invoicing, businesses can save an average of $20 per invoice processed. For companies processing 500 invoices per month, this equates to an annual saving of roughly $120,000. The time and cost efficiencies

“For finance teams addressing debtor and cash flow issues, automating your accounts receivable systems and processes is an excellent place to start.”

26 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Credit Management

realised through e-invoicing are among the many benefits businesses and their customers will enjoy. When these innovative invoicing processes are implemented using a connected solution that manages the end-toend payment process, it becomes easier for customers to pay on time. This is mainly due to an improved payment experience, primarily delivered through the availability of more, and flexible, payment options. Further, an improved payment experience can be the difference between closing a transaction in days instead of months, proving invaluable to companies, especially after the last two years of uncertainty. In a survey of businesses across Australia and New Zealand, 85 per cent of respondents said accepting and making card payments for B2B transactions improved spend control and visibility, reduced payment processing times, and delivered cost savings compared to

“The time and cost efficiencies realised through e-invoicing are among the many benefits businesses and their customers will enjoy.” traditional payment and purchase order processes, such as manual electronic funds transfers. For customers who haven’t been invoiced yet or who consistently pay on time, implementing smart technology is about making the payment process smoother. And for problem debtors, it’s about providing accounts receivable teams with the tools they need to efficiently collect late payments and address the broader problems that late payments create. E-invoicing and digital payments solutions simplify the collections process and reduce the invoice-to-pay lifecycle, which improves cash flow, strengthens data integrity, and improves

systems and processes across organisations. According to Deloitte, it takes businesses around 30 days to complete a payment, and 47 per cent of suppliers are paid late. By realising efficiencies and improving cash flow with these solutions, businesses enjoy better collaboration with their trading partners along with having the tools and data to strengthen credit risk management frameworks and processes.

Reduce bad debt and tighten credit risk management with automation Automated payment solutions are bringing the convenience and technological advances seen ➤

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 27

Credit Management

in B2C payments in recent years to the B2B space. These advances have seen consumers access credit for goods and services through credit card payments or buy now, pay later (BNPL) services. It’s been helpful for consumers to have this option available. However, the scale at which these advances can help companies demonstrates the seismic impact this technology will have on cash flow across the supply chain while equipping decision-makers with the data they need for stronger credit management. Drilling down into each element of a business’s finances, such as your credit risk management processes, plays an important role in proactive and effective financial management. A recent survey by McKinsey & Company found that 43 per cent of CFOs identified streamlining their budgeting processes to react faster and more efficiently as a top priority. With an integrated receivables platform, credit managers can automate their credit risk management to achieve lower instances of bad debt, decrease blocked orders with AI-based predictions, and reduce customer onboarding times. By automating accounts receivable processes, businesses can set rules to automatically notify their credit managers and accounts receivable team when an

“By automating accounts receivable processes, businesses can set rules to automatically notify their credit managers and accounts receivable team when an account needs attention. This can include notifications when an account is late or their credit risk is too high.” account needs attention. This can include notifications when an account is late or their credit risk is too high. Credit managers can also feed this data into their assessment systems allowing for faster, automated rejections and approvals while efficiently managing credit risk. The reduction in manual processes and efficiency realised through automation can transform a business’s credit management function providing it with the systems, processes and tools to manage risk proactively. For instance, automated credit management systems can thoroughly analyse a business’s financial data to provide an accurate credit limit upon onboarding and proactive updates based on real-time risk alerts. And with 53 per cent of companies still intending to offer trade credit for B2B transactions as a shortterm financing tool for customers, having tight credit management processes is critical. Further, by integrating these automation features with a business’s existing ERP and CRM software, the customer onboarding process reduces from days to hours in some instances.

Streamline and improve data reliability with ledger-to-ledger integration In the inevitable event of chasing up late payments, data integrity and ledger-to-ledger integration provide businesses with a head start by giving both parties a single source of truth from one integrated system. Ledger-to-ledger integration connects the ledgers of each company, allowing for automatic real-time account reporting and reconciliation. For example, when a customer pays their invoice, the payment is automatically recorded in their accounting systems, the supplier’s accounting system, and other systems integrated with the payment platform. Both parties in the transaction benefit from a reduction in manual data entry while streamlining other tasks such as account reconciliation and reporting.

28 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Credit Management

For those problem debtors with a large balance owing, an integrated accounts receivable management system means businesses and their customers can collaborate on a repayment plan in real-time. The customer simply logs into the pay-byinstalment interface, and they can choose how and when they pay. For example, both parties may agree on fortnightly payments until the invoice is paid in full. The customer can schedule payments to be automatically debited from a bank account or credit card. These automated repayments eliminate the need for further manual follow-up.

Strengthen your financial management with one intuitive AI cloud-based solution When hundreds of payments are moving through your business each month, the resources required to ensure accounts receivable processes are efficiently managed and can grow substantially. Therefore, it’s critical that organisations have the systems, processes and tools they need to manage cash flow and risk proactively. With smart solutions in place, you can take the guesswork and inefficiency out of manual accounts receivable management. Whether your business is new

to automating its systems or is well on the path of its digital transformation journey, implementing intuitive AI cloudbased solutions that deliver benefits across the business breaks down the silos that restrict cash flow and slow productivity. It’s a streamlined solution to complex problems that will help your business maintain a competitive advantage throughout all stages of the business lifecycle.

*Adrian Floate MICM CEO at Spenda E: adrian.floate@spenda.com.au T: 0412 377 877

“When hundreds of payments are moving through your business each month, the resources required to ensure accounts receivable processes are efficiently managed and can grow substantially. Therefore, it’s critical that organisations have the systems, processes and tools they need to manage cash flow and risk proactively.” April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 29

Credit Management

How do you know if you’re using quality data? By Roni Millard MICM*

Roni Millard MICM

Wherever there is data, there are answers. But there are right answers, and there are wrong answers. Good-quality data can be relied upon to give valuable insights for better decision making, but the same can’t be said of low-quality data. Data that is incomplete, dated or not fit for purpose can result in inaccurate or misleading outcomes. A business decision based on flawed information can alienate customers and cost organisations dearly in lost revenue, missed opportunities and compensatory overspending. Estimates by Gartner1 place the average cost to organisations of poor data quality at $12.9 million each year. Bad data equals wrong answers. Data quality is a gamechanger for building competitive advantage in today’s digital, customer-driven economy. With more data available than ever, it is a business imperative to find value in this sea of information. In the financial services industry, the harnessing of newly available income and expenditure data, for example, offers the opportunity to improve credit risk and segment customer bases to deliver tailored products for greater brand loyalty and financial literacy. When the Economist2 announced in 2017 that the world’s most valuable resource is no

30 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

longer oil but data, organisations were already leveraging data to understand their customers, predict future trends, and unlock new revenue systems to drive business growth. Five years later, there can be little doubt that organisations who don’t prioritise the accuracy, completeness, consistency, credibility and currentness of data will be left behind in the global race to be data-driven. So how can businesses increase their data maturity? A useful starting point is to find out more about the reliability of the data that informs your insights. When seeking to partner with a thirdparty provider, understand that data quality is not the same from one provider to the next. Be sure to ask these three qualifying questions at minimum to help compare data integrity between different providers.

1. What is the depth and detail of data sources? Variety matters when it comes to data quality. The more depth of data and breadth of data sources, the better. When sources are limited, and datasets lack relevant detail, there’s a good chance that part of the data story is missing. This lack of clarity may lead to inaccurate conclusions. Diversity and breadth of data

Credit Management

brings about a clearer picture, generating insights with greater predictability. Consider the example of a commercial credit report. For it to give you the information you need to reduce risk exposure, it should draw on enough data points to detail who is making the enquiry, the date, the dollar value, the type of credit and the industry it originated from. When any of these fields are missing, it’s a clue that the report is probably based predominantly on ASIC search data and lacks the associated context to interpret warning signs of credit risk. For a credit report to properly tell a story based on data, ensure your provider draws on a wide breadth of reliable, authoritative sources that span consumer, commercial, fraud and identity, and new data sources like bank transaction and Buy Now Pay Later (BNPL).

2. How fresh is the data? The shelf life of data shrinks as the volume and velocity of data extraction increases. Because data

“For a credit report to properly tell a story based on data, ensure your provider draws on a wide breadth of reliable, authoritative sources that span consumer, commercial, fraud and identity, and new data sources like bank transaction and Buy Now Pay Later (BNPL).” is rendered obsolete or inaccurate the moment newer information becomes available, the more frequently it is refreshed, the more accurate the insights. Consider the commercial credit report example again, where an increased number of credit enquiries has shown to be a critical early warning of financial distress. Unless the ASIC data your provider uses is timely and up to date, it may miss all-important recent credit enquiries, thus overlooking vital information you can use to inform your risk assessment. Ask the data provider how regularly they refresh their data. Do they collect and update information

in real-time? As the volume of data and the pace of change continues to skyrocket, data management is becoming an increasing challenge for organisations and data providers alike. Yet, in our “always-on” world, it is more important than ever to work with current and quickly accessible data.

3. How well is data matched? Two data records might appear dissimilar at first glance, but they turn out to be the same on closer investigation. A data provider’s ability to match these source records depends on factors like the quality of their data preparation, the depth and breadth of their ➤

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 31

Credit Management

10 key questions to ask when choosing your data partner A good data partner gives you the conﬁdence to make fast, well-informed decisions. Here are 10 tips to help you ﬁnd the right data partner to support your business success.

Is their ASIC data current? Data providers purchase ASIC extracts when their customers request company information. The more users and customers the data provider has, the more frequently this data is refreshed.

of a business - giving you a better chance of identifying any early warning signs upfront.

Do their credit enquiries have substance?

Are their customers active or idle? Do the customers of your data provider generate credit activity on a daily basis? You’ll get a greater breadth of data, more predictability and better business decisions from a data provider with a high number of active users.

Is Buy Now Pay Later data included?

Are a variety of data sources included?

Are their algorithms market-leading?

What volume of SMEs informs trade payment insights? 7 The larger the volume of customers contributing data, the deeper the trade payment insights, which help predict early warning risk indicators.

Is pricing consistent and transparent?

Is there ongoing account manager support?

Work with your data provider to create tiered pricing that adjusts as your

32 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Equifax analysis shows that BNPL customers with credit cards and personal loans are more likely to have been delinquent on their credit facility. BNPL information is critical information in a credit report.

Good machine learning algorithms quickly and accurately match and link records together to predict risk.

Having a direct line to someone who can help you, and who intimately understands your account, for the duration of your contract, is important.

Blending director and commercial information together increases the predictive power for determining the

A credit enquiry should include the industry requesting the credit, the type of credit requested, who is requesting it and the dollar value. An ASIC search is only one component of a credit enquiry.

Investigate the number of sources your provider pulls data from. The more variety of data used, the greater the predictability of risk.

Is director information included?

measurement for price increases, such as you avoid unanticipated costs.

Credit Management

data sets and the sophistication of their data-matching technology. Machine learning algorithms must be advanced enough to work across disparate data sets to compare, identify or merge related entities. By joining the dots on a myriad of information, a more complete view emerges of financial health and customer behaviour. Consider the commercial credit risk example again. When a deep level of insight is required into a business’s validity, financial stability and performance, it is crucial to see both the commercial and consumer profiles of the company’s directors. Both information sets work together to form a complete picture of potential risk.

See you at AICM’s

“Correlating and linking business data with information about the people behind the business can reveal critical details about financial instability that may otherwise have gone unnoticed.” Correlating and linking business data with information about the people behind the business can reveal critical details about financial instability that may otherwise have gone unnoticed. The takeaway point is that good quality data drives more informed decisions to increase revenue, reduce costs, solve problems and stimulate growth. Poor quality data has the opposite effect, wasting your resources with bad outcomes and costly errors. Establish a value-

driven foundation that delivers the right answers by prioritising data quality in your dealings with data providers.

*Roni Millard MICM Chief Marketing Officer www.equifax.com.au FOOTNOTES: 1

https://www.gartner.com/ smarterwithgartner/how-to-improve-yourdata-quality

https://www.economist.com/ leaders/2017/05/06/the-worlds-mostvaluable-re...

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Consumer Credit

Financial hardship information included in credit reporting from July 2022 By Michael Blyth*

All credit professionals need to understand and prepare for these changes which not only require compliance with new legislation, but also significantly impact how you engage with your customers.

What’s changing

Michael Blyth

Currently, financial hardship arrangements cannot be reported in the credit reporting system. As such, a consumer’s credit report might show that they’ve missed repayments during a hardship arrangement, even if those missed or reduced payments were agreed as part of a financial hardship arrangement with their lender. Alternatively, some lenders might cease reporting a customer’s repayment history during a financial hardship arrangement – this approach results in ‘blank’ repayment history. Both approaches don’t tell the full story about the consumer. From 1 July, the credit reporting system will be much clearer, with the introduction of “financial hardship information”. If a lender agrees as part of a financial hardship arrangement, that a customer may temporarily reduce their

34 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

monthly repayments; provided the customer makes that reduced payment on time as agreed, their repayment history will show that they are ‘current and up to date’ with payments for that month. In addition, the credit report will show a “flag” alongside that month’s repayment history information, indicating that a special payment arrangement was in place for that month. In the credit report this will be referred to as “financial hardship information”. Monthly repayment history information is being reported for more than 95% of all regulated consumer credit accounts in Australia. More than 70 lenders contribute and access repayment history through the credit reporting system. All credit professionals need to consider what these hardship reporting changes mean for them. Three important issues to consider are: z For lenders that currently report repayment history, or intend to move to comprehensive credit reporting: when do I need to report financial hardship information, and how do I do it? z For credit professionals that access credit reporting

Consumer Credit

WHEN IS IT A HARDSHIP ARRANGEMENT z Can the customer start normal repayments within a month? z Are the prepayment difficulties the result of short-term mismanagement of funds? z Does it follow an earlier hardship arrangement? z Has the lender and customer agreed it’s a financial hardship arrangement is considered permanent or temporary. In practice, while following that framework will likely result in most “promises to pay” made in collections not being managed as hardship arrangements, it is important that lenders put processes in place capable of making individual assessments.

information directly or as an access seeker: when will I see financial hardship information on a credit report, and what can I do with it? z For all credit professionals: what questions will customers have about these changes, and what does this mean for how I engage with my customers?

When do I need to report financial hardship information, and how do I do it? A financial hardship arrangement is an agreement between a borrower and a lender that impacts the loan repayment obligation because something unexpected has occurred and has had a big impact on the

borrower’s ability to repay. Payment deferrals agreed in response to COVID-19 and natural disasters such as floods or bushfires are good examples of when a financial hardship arrangement might be entered, but other circumstances such as illness or relationship breakdown might also lead to a financial hardship arrangement. Importantly, not all repayment arrangements made between borrowers and lenders are considered hardship arrangements. The Privacy (Credit Reporting) Code includes a framework which lenders can use to consider which arrangements should be treated as hardship arrangements, and whether an arrangement

When will I see financial hardship information on a credit report, and what can I do with it? There are strict controls on access and use of financial hardship information, and as a credit professional you need to be careful when interpreting or acting on what you see in a credit report. Financial hardship information will be shown to lenders when accessing a credit report to assess new credit, however it will not be shown if the lender is accessing information for the purpose of collecting overdue payments on existing loans. And whenever a lender sees financial hardship information, that information must not be used as the sole basis for closing down or reducing an existing line of credit. ➤

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 35

Consumer Credit

Credit reporting bodies are also prohibited from including financial hardship information when calculating bureau credit scores. And they must also delete financial hardship information (the “flag” that accompanies repayment history for the relevant months that a financial hardship arrangement is in place) from credit reports after 12 months. As with regular repayment history information, the repayment history for those relevant months will be retained for 24 months.

These controls are designed to balance the interest of lenders and consumers.

What does this mean for how I engage with my customers? Most lenders already have positive conversations with their customers around financial hardship arrangements. However, from 1 July lenders will also need to be able to explain the types of hardship and collections arrangements and how they will be reported on the customer’s credit report.

Lenders seeing a hardship indicator on a credit report will also be in a better position to have proactive conversations with consumers around the circumstances of a credit application. At an industry level, ARCA will be providing consumer education around the changes to credit reporting through creditsmart.org.au, as well as providing support to individual ARCA Member education programs.

WHAT YOU CAN/CAN’T DO WITH HARDSHIP INDICATOR

 Assess application for new credit  Assist consumer avoiding default  Receive in bureau score  Collect overdue payments  Sole reason for reducing existing credit

36 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

*Michael Blyth Australian Retail Credit Association Executive Director - Policy & Advocacy www.arca.asn.au www.creditsmart.org.au

The AICM has held WINC luncheons nationally since 2015 and has created motivational occasions for credit professionals to connect, be inspired and elevate women in the industry. Our 2022 WINC luncheon and webinar theme is ‘walking together through 2022’ and is focused on the growth opportunities of leading through uncertain times. The AICM is passionate and committed to providing continuous support to help women achieve their potential and thrive in their personal and professional lives.

SAVE THE DATE SA VIC WA QLD TAS

Friday, 13 May 2022 Friday, 20 May 2022 Friday, 17 June 2022 Friday, 19 August 2022 Friday, 9 September 2022

The 2022 WINC events will support Dress for Success Australia Dress for Success is a not-for-profit organisation that empowers women to achieve economic independence by providing a network of support, professional attire and the development tools to help women thrive in work and in life. PREMIUM SPONSOR

SUPPORTING SPONSORS

PPSR

PPSR practicalities By Lynne Walton MICM*

Lynne Walton MICM

Considerable focus has been placed on the legal aspects of the PPSA but what about the practicalities of working with the government’s PPSR Register for non ‘business as usual’ transactions. Many AICM members place registrations day to day as suppliers of goods, hirers of equipment, providers of finance and sometimes just as protection from Liquidators Unfair Preference or Preferential Payment claims. In most cases, they have become familiar with the process and the more common resultant effects produced but what about the ‘out of the ordinary’ situations that impact PPSA security and require interaction with the register – how do secured parties deal with those? Lynne Walton from Accessii Group (pronounced Access Eye) has outlined a few not so commonly faced situations to help us navigate our way through some of the practicalities of managing our PPSR registration portfolios and maintaining our security in an enforceable condition. Suppliers or financiers with suitable Terms and Conditions of Trade that register correctly on the PPSR become ‘secured’ creditors. This means they have a much

better chance of being paid than a creditor that hasn’t register and is ‘unsecured’. Financiers, of course, see the merit and register routinely but many suppliers fail to see the value in paying the $6 government fee to become a secured creditor for 7 years. Perhaps they find the registration process too difficult, maybe they haven’t been able to effectively enforce their rights in the past or they may feel they don’t need protection having become accustomed to the very low level of insolvencies in recent years. Whatever the reason, now may be the time to rethink this strategy. For those that do register, below are some situations that secured parties find themselves in where the best way to interact with the register and still maintain the required security may not be obvious:

1. Your business (ABC Pty Ltd) has acquired the customers of another business (DEF Pty Ltd) that has never registered on PPSR This situation is fairly straightforward to deal with depending upon the amount of customers to be brought on board. To register effectively on PPSR there must be a security

“Suppliers or financiers with suitable Terms and Conditions of Trade that register correctly on the PPSR become ‘secured’ creditors. This means they have a much better chance of being paid than a creditor that hasn’t register and is ‘unsecured’.”

38 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

PPSR

agreement. Section 20 of the PPSA (paraphrased) states that ‘the security agreement must be in writing and signed by the grantor or adopted or accepted by the grantor in a way that shows they intend to be bound by the terms’. It would seem, therefore, that terms and conditions can be sent to the new customers with a letter providing acquisition details such as the entity and dates, new payment details and enclosing the new terms and conditions of trade. To comply with S20 the letter might say that the action of ordering goods after a specific date signifies that the customer accepts the terms and conditions of trade enclosed. As far as registration is concerned, a few customers can be processed manually via the governments PPSR site provided there is guidance in relation to responding to PPSR generated questions, and accurate use of the customer entity identifier (eg ABN for trusts and partnerships,

“For businesses that sell goods on retention of title terms, PPSA protection should apply to all subsequent supplies following registration.” ACN for companies, first name, surname and date of birth for individuals and sole traders – this list is not exhaustive) strictly in line with PPSA grantor identification guidelines. For larger volumes, it makes sense to upload these in bulk. There are several providers with this capability but secured parties should ensure they are using approved profiles and cleansing the upload before processing so the correct identifier for each entity type is selected. For businesses that sell goods on retention of title terms, PPSA protection should apply to all subsequent supplies following registration. For hire businesses, additional considerations may be required.

2. Your business (ABC Pty Ltd) has acquired the customers of another business (DEF Pty Ltd) that has existing registrations on PPSR. It goes without saying that your registration must be perfectly constructed to be enforceable so the first step is to gain access to the existing registrations on PPSR. You can do this by downloading them directly from PPSR using DEF’s secured party group number (SPG number) and access code. If the registrations are incorrect, there is probably little value in correcting them by PPSR amendment (which usually costs the same as re-doing them) but this depends upon the type of supply (hire or sale) and whether the errors identified are ➤

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 39

PPSR

“When a seller of goods on retention of title terms registers on PPSR they become a secured creditor with the highest possible priority (a Purchase Money Security Interest or PMSI) to both the goods they have supplied that have not been paid for but also to any debts created from the sale of their goods.” fatal. Once you are satisfied that the registrations are correct, PPSR allows you to transfer registrations to the new secured party. Before you do this, however, you should consider the exposures at each stage. Stage 1 – Immediately upon acquisition all supplies will have been made by DEF Pty Ltd so this entity needs to be the secured party on PPSR – the old DEF SPG. Stage 2 – as ABC Pty Ltd begins to supply new stock to customers there will be debts due to both DEF Pty Ltd and ABC Pty Ltd by the same customer – a joint ABC and DEF dual entity SPG. Stage 3 – DEF Pty Ltd’s debts will all be collected and ABC Pty Ltd becomes the only secured party on PPSR – the new ABC SPG. This is the safest way to move from one supplier to another whilst maintaining PPSR protection. A note of caution – this does not suit all circumstances and depends upon the business sale transaction and security agreements. You should check with your legal advisors that your circumstances suit this process before proceeding.

3. Your business receives a S64 notice When a seller of goods on retention of title terms registers on PPSR they become a secured creditor with the highest possible priority (a Purchase Money Security Interest or PMSI) to both the goods they have supplied that have not been paid for but also to any debts created from the sale of their goods. Tree Co Pty Ltd supplies wood to Table Co Pty Ltd. Table Co makes

a table and sells it to Wholesaler Pty Ltd on credit. Under PPSA Tree Co has security over the book debt due by Wholesalers to Table Co. If Table Co goes bust owing Tree Co, the debt due from Wholesaler must be paid to Tree Co once collected. This is how PPSA security of proceeds works. Now let’s add debt factoring or debtor financing into the mix. Debtor Finance Co Pty Ltd is a debt factoring company who funds Table Co’s debts. But, as we know, Wood Co already has security over the book debts. What happens here? Debtor Finance Co is providing ‘new value’ into the transaction and so they will take priority over Wood Co but only for the book debt element and provided they do a number of things first (explained below) to obtain the PPSA priority. Wood Co still has security over the wood and the table but as soon as the invoice is raised and a book debt is created Debtor Finance Co takes priority provided they 1) register properly on PPSR using the collateral classes Accounts and General Intangible, serve a Notice under section 64 of the PPSA on Wood Co and wait 15 days before advancing funds. Wood Co’s security position has deteriorated following receipt of the Section 64 notice and the expiry of the 15 days so it is very important for suppliers to take notice when they receive these. There is very little they can do to prevent their security reducing aside from minimising credit exposure to Table Co, seeking payment up front or asking for a guarantee or additional security.

40 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

4. Your business receives a S178 or S275 notice The PPSR is a ‘notice board of security interests’ administered by the government that anyone can search to see if an asset is encumbered or a business is financed or any parties that have a financial security interest in either. Since it is merely a notice board, all aspects of a particular security may not be clear and therefore mechanisms to enable ‘interested parties’ to request more information are needed. ‘Interested parties’ are defined within the PPSA but would include the party or entity the registration has been placed against ie the grantor. Secured parties often register against grantors who are unclear why. PPSA enables them to request details. A S275 notice, allows an interested party (usually a grantor) to formally request a reason for the registration and a copy of the security agreement evidencing that right and a S178 notice is a formal demand placed on the secured party to remove or amend the registration. Secured parties have a limited time frame to respond to these notices. If they fail to do so, the grantor has the right to escalate the demand for action to the Registrar.

*Lynne Walton MICM Founder and CEO Accessii Group Pty Ltd T: 1300 831 331 www.accessii.com.au DISCLAIMER Accessii is not a law firm and does not dispense legal advice. This article is general in nature and should not be relied upon in all circumstances. Accessii recommends that suitably qualified legal advisors be engaged before readers take or refrain from taking any action in relation to its contents.

PPSR

PPSR Registration vs Credit Insurance By Kirk Cheesman MICM*

I’m finding myself increasingly being asked to address questions along the lines of:

If I have a PMSI registered on the PPSR do I really need to worry about credit insurance?; and, its alternative:

If I have credit insurance in place, do I really need to worry about registering my PMSI? In return for payment of premium, credit insurance can provide trade credit suppliers with protection of around 90% of any loss suffered should their buyer go insolvent, or otherwise default on their payment obligations. However, if you have sold your goods subject to a Retention of Title clause and your customer collapses before they can make payment, a timely $6 registration on the PPSR of that ROT will ensure the return of your goods (or their cash equivalent). If this is the case, do you really need to pay substantially more in credit insurance premiums for bad debt protection? Unfortunately, registration of a ROT will NOT ensure the return

Kirk Cheesman MICM

of your goods (or their cash equivalent). Registration might result in the return of goods, and registration certainly won’t hurt recovery prospects, but it isn’t a miracle cure. Goods that remain unpaid may have been on-sold, consumed or ‘mislaid’ by the time a liquidator is appointed and what goods can be recovered may no longer be worth their original invoice value, either through use, damage, or merely by the passage of time. Because the PPSA focuses on property being used as collateral in a security interest, its effectiveness is wholly dependent upon the continued presence of that particular property and the value of the property continuing to be sufficient to cover the value of the outstanding debt for which it acts as security. Credit insurance, however, focuses on what is actually owed, what has been invoiced and what remains outstanding. It doesn’t concern itself with any fluctuating value relating to the goods supplied nor with their continued presence post-delivery, only with what is owed under the invoices issued. ➤

“...if you have sold your goods subject to a Retention of Title clause and your customer collapses before they can make payment, a timely $6 registration on the PPSR of that ROT will ensure the return of your goods...” April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 41

PPSR

“Who would a credit insurer be happier with as a policyholder? A supplier who suffers a loss but is able to recover half its value by exercising their PPSR registered security rights, or a supplier who is unable to offset any of their loss because they weren’t prepared to spend $6 on a PPSR registration?” If someone goes bust owing you money, a credit insurance policy will, invariably, pay you the lion’s share of your loss, regardless of what happened to the goods you supplied. Does this mean that credit insurance is the miracle cure and PPSR registration of ROT/PMSI rights is not necessary? Well… While I’m an enthusiastic advocate for trade credit insurance, it is nonsense to suggest that other risk mitigation strategies should be ignored merely because there’s an insurance policy in place. You wouldn’t decide against having window locks in your house just because you have a home & contents insurance policy, nor would you be casual with your car’s security because it’s

insured against theft. Not only do credit insurers require that the policyholder (the ‘supplier’ in our context) maintain a financial interest in the underlying transaction (the supplier will usually have to bear at least 10% of any loss), they also set their premium rates based (in some part) on the supplier’s history of bad debts and the claims they’ve already had to pay. Just as a car insurer will take note of whether the insured vehicle is garaged overnight or parked on the street, so a credit insurer will look at the extent to which suppliers mitigate the potential for losses by including security rights in their trading terms and perfecting those rights by registration on the PPSR. Who would a credit insurer be happier with as a policyholder?

42 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

A supplier who suffers a loss but is able to recover half its value by exercising their PPSR registered security rights, or a supplier who is unable to offset any of their loss because they weren’t prepared to spend $6 on a PPSR registration? While both suppliers will get their claims paid, one will likely find their premium rates ‘adjusted’ far more than the other. So while a credit insurance policy is more likely to keep your business afloat when beset by bad debts, a PPSR registration will likely help keep the cost of that insurance policy as low as possible. *Kirk Cheesman MICM Group Managing Director National Credit Insurance Brokers E: kirk.cheesman@nci.com.au T: 1300 654 500 www.nci.com.au

Personal property securities Register (PPSR) What is Personal Property Securities Act

The Personal Property Securities Act 2009 came into effect from January 2012.

The purpose by the Commonwealth government was to achieve:

1. A national regime with a single register of personal property security interests to comprehensively record security interests granted over property owned by natural persons (individuals & sole traders), and nonnatural persons (companies, trusts). 2. To give legal certainty for those taking security over, or buying personal property by way of clear priority, enforcement and extinguishment rules. 3. A focus on transactions that secure payment or performance of an obligation, without regard to the form of the transaction (e.g. finance lease or ROT arrangement). or The asset offered as security (vehicle, aircraft, vessel, crops, wool, book debts for finance arrangements, contractual rights or intellectual property). 4. Allowing registration of arrangements where the security provider has use of an asset, for example by way of lease or commercial consignment, even though legal ownership remains with the secured party. 5. Protecting consumers who buy valuable assets such as cars or boats.

This act covers the secured credit arrangements where:

1. Retention of title arrangements where a purchaser has possession but does not have ownership from the seller (until the purchase price is paid). 2. Finance leases where an asset is leased for payments to cover its costs and the lessee may be able to acquire title to the asset at the end of the lease. 3. Interest of debtor financiers (Factors or Invoice Discounters). 4. Consignment stock. 5. Leases for a term exceeding 2 years (for contracts after May 2017).

Role of secured credit in our economy

Consumer If the lender takes security over some of the borrowers’ property to secure the borrowers obligations, the lenders position is quite improved. To take security, the lender must register their ‘interest’ in the borrowers’ goods/property. Commercial If you are leasing or selling goods on ‘retention of title’ or on consignment, you would secure your interest in these goods by obtaining a Purchase Money Security Interest (PMSI). This will enable you to have super priority over the goods in question thereby securing your position with the (grantor) debtor.

Is the PPSR relevant to my business?

Every day you may be putting your business at risk when buying, selling, leasing or hiring out goods, or selling valuable goods on consignment. Ask yourself … z do the goods you are buying have money owing on them? z will you get your goods or money back if your customer goes broke? z you can’t avoid these common transactions, but you can protect yourself.

Want to learn more?

Undertake a personal properties security trainer led group session with AICM where we cover off on the vital points of PPS.

Topics covered include: z z z z z

Why use and register PPSA/PPSR What is the language of PPS Does my paperwork allow me to use the register How to obtain perfection of your registration When should I release my registration.

Takeaways: z z z z

Complete a registration document to perfection Searching the register How to release a registration How to renew registrations.

PPSR

Common mistakes in PPSR registrations By Simon Read*

Having performed over a thousand PPS Assurance Reviews for our clients, we’ve seen just about every PPS registration error that can be made. In fact, over 95% of the reviews we’ve performed have uncovered some level of administrative errors. Finding out your PPS registration fails to comply with the rigid requirements of the PPSA can be an expensive experience. A rejection of your claim will see you relegated to the ranks of an unsecured creditor, and we know what that means – little, if any, debt recovery. If you’re still using the Government’s PPSR registration platform, you’ll be aware of its complexity. The former Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, recently released her research citing the need for a major overhaul of the PPSR process. It’s certainly not just the fault of the Government’s PPS Registry portal. The PPSA is a tough piece of legislation using a language that is foreign to many. Knowing the common registration errors will help you understand how best to register a security interest on the PPSR. The following guide is just that, a guide, and will assist your understanding of the process when performing PPSR registrations.

What to consider when registering on the PPSR Simon Read

So, how hard can it be? Well, it turns out there are at least 11 variables

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involved in each registration. Keep reading, we’ll explain all 11 variables and how they relate to your security interest.

Secured Party Group Have you included the Trust and Trustee if you’re a trading trust? For example, if a service provider performing PPSR registrations for their client uses their own name as the secured party group and their client’s names as the grantors, all their registrations will be invalid.

Collateral Class Make sure you select the appropriate collateral class. There are 28 of them but only a handful are used regularly. We often see motor vehicles incorrectly registered as Other Goods with their serial numbers recorded in the Collateral Description.

Collateral Type Have you selected the correct collateral type? Consumer registrations are of no help if you have a commercial relationship with your customer.

Collateral Description How’s your collateral description? The broader the better, with at least some reference to the nature of your collateral. Whilst a collateral description is not necessarily mandatory, it makes a lot of sense to provide a description. Just make sure it’s correct and broad enough to cover any future changes in the nature of the goods you supply.

PPSR

Purchase Money Security Interest (PMSI) Is your security a Purchase Money Security Interest? Failing to elect PMSI is one of the most common registration errors. This can undermine the effectiveness of your registration and potentially render it useless. In rare circumstances, a Secured Party won’t have PMSI, however, the vast majority do. This is a critical election and care is required.

Inventory Will your goods/equipment be treated by your customer as inventory? Essentially, if your customer consumes, on-sells or on-hires your goods or equipment, they will treat it as inventory. Most of the businesses we speak with have no idea what this question means.

Proceeds Are you going to claim proceeds? It is a default election in the PPSR Financing Statement, so changing this election makes little sense and amending the standard proceeds description reduces its effectiveness.

Subordinated If you haven’t subordinated your security, why elect subordinated? Don’t give insolvency practitioners any opening to argue the validity of your registration. ➤

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 45

PPSR

Control The same goes for the control election, if you don’t control your collateral (it’s unlikely you will), don’t make the election.

Transitional It is common to find old Transitional registrations still being relied upon to protect security. Transitional registrations are only appropriate where your current security agreement with your Grantor (for example, your signed terms of trade) existed at 30 January 2012 (the commencement of the PPSA). If you’ve reissued or amended your terms of trade since February 2012 (which is highly likely), a transitional PPS registration is unlikely to be appropriate.

Grantor Identification Identifying your customer is critical but doing so in accordance with the PPSA and its regulations is not so easy. Grantor identification errors are very common and will invalidate a PPSR registration.

Identifying a grantor by its ABN is still a common issue and is invalid if the grantor also has an ACN. Identifying a sole trader by its ABN is also an issue as they must be registered by their full name and date of birth. There’s little point in only registering against the trustee if the grantor is a trust. The failure to adequately identify the grantor is also an indicator that users of the PPSR are not aware of the court’s decisions on many of these matters. It’s clear that human error is the biggest contributor to registration mistakes, particularly when using the Government’s PPSR register. Having to perform repetitive registrations, answering the same questions over and over and going through page after page of the Financing Statement is a recipe for error. In our experience, there is simply not enough support provided to those tasked with performing the PPSR registrations. The majority do not have sufficient training, support

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or knowledge to adequately carry out their role, yet they will be the ones in the ‘firing line’ if a PPSR registration fails. If you want to ensure your registrations are compliant with the PPSA, seek the advice of a specialist, undertake an Assurance Review and use alternative PPSR registration software. Managing over 400 Secured Party Groups has taught us a lot, particularly the benefit of PPSR registration and data management software. Our recent move to PPSR Cloud has been a great success. PPSR Cloud software is available to anyone and allows you to perform registrations, amendments, renewals and searches. It’s simple, safe and accurate.

*Simon Read Founder and Director. PPSAdvisory E: Simon.read@ppsadvisory.com.au www.ppsadvisory.com.au The information provided in this article is general in nature. We are not lawyers and this is not legal advice.

Legal

The High Court widens the permitted use of public examinations By Fiona Reynolds MICM and Lucy Tindal* TurkAlert Published 22.03.2022

Fiona Reynolds MICM

On 16 February 2022 the HCA delivered a significant decision in Walton & Anor v ACN 004 410 833 Ltd (Formerly Arrium Limited) (In Liquidation) & Ors (HCA 2022) expanding the scope in which an examination summons can be issued to an officer of a corporation in external administration about its examinable affairs pursuant to s596A of the Corporations Act 2001 (the Act).

Key Takeaways z By a 3:2 majority, the HCA held that shareholders seeking examination of a company officer to determine whether a claim

Lucy Tindal

might be brought against the corporation in administration or its officers for the purpose of enforcing the law is a legitimate purpose, even if that claim is for the benefit of only some of a company’s shareholders. z The decision departs from a long line of authority which limited the purpose to examine to that which benefited the company, its creditors or contributories and is an important win for eligible applicants who may have a personal claim against the corporation, or its former officers and advisors. z The HCA’s broad interpretation of s596A opens the doors to ➤

“... shareholders seeking examination of a company officer to determine whether a claim might be brought against the corporation in administration or its officers for the purpose of enforcing the law is a legitimate purpose ...” April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 47

Legal

“The HCA’s broad interpretation of s596A opens the doors to prospective litigants who intend to seek recourse for a personal right of recovery for corporate wrongdoings and want to use public examinations as a way to decide whether to pursue that proceeding.” prospective litigants who intend to seek recourse for a personal right of recovery for corporate wrongdoings and want to use public examinations as a way to decide whether to pursue that proceeding.

Section 596A Section 596A of the Act confers power on the Court to summon a person for examination about a corporation’s examinable affairs if: 1. an ‘eligible applicant’ applies for the issue of that summons (which includes a person authorised in writing by ASIC to make the relevant application); and

2. the proposed examinee is, or was, an officer or provisional liquidator of the corporation. If these two criteria are met the Court must issue the summons. However, if it is found that the applicant has an improper purpose in seeking the order, or if the order otherwise amounts to an abuse of process, then the summons may be set aside.1

Brief Facts Arrium Limited (Arrium) was a public listed mining company. In 2014 Arrium published an Information Memorandum, including information about its financial

48 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

records, as part of a capital raising exercise. Subsequently, the value of Arrium’s mining operations decreased and in April 2016 Arrium was placed into administration. In June 2019 liquidators were appointed. The appellants were a group of former shareholders whom had invested in Arrium as a result of the capital raising. Following Arrium’s liquidation, the appellants sought from ASIC, and were granted, written authority to apply to the NSWSC for an order under s596A of the Act to examine a former director of Arrium and its auditor. The purpose of the

Legal

examination was to investigate alleged misrepresentations contained in the Information Memorandum about Arrium’s financial status. The shareholders acknowledged that the result of those investigations could lead to them bringing a class-action against Arrium’s former director and auditors. A Registrar of the NSWSC granted the summons. Arrium applied to a Judge of the NSWSC to have the summons stayed or set aside as an abuse of process and the summons was stayed on condition that Arrium file an application for leave to appeal. Arrium successfully appealed to the NSWCA who found that the predominant purpose of the summons for examination was not to confer a commercial benefit on Arrium, its creditors or contributories, but to investigate and pursue a private benefit for a limited group of shareholders. It was therefore issued for a purpose foreign to the statutory purpose conferred by s596A and the orders for examination were discharged. The HCA overturned the NSWCA’s decision.

Judgment The HCA’s decision rested on the statutory purposes of an examination under s596A and whether the applicants’ predominant purpose was inconsistent with the express or implied scope of the Court’s powers under s596A. If so, it was an abuse of process and should not be allowed. The HCA considered the statutory context and the history of the provisions concerning the powers to examine and determined that past decisions made in relation to s596A’s predecessors were of

“The Court concluded that the prevailing purpose of s596A was to address the administration of a corporation or the enforcement of the law concerning the corporation and its officers in public dealings, including the identification and prosecution of any corporate misfeasance.” limited assistance in determining the scope and purpose of the current s596A. In their joint judgment, Edelman and Steward JJ held that the statutory purpose of s596A has widened from what was historically confined by reference to the benefit to the company, its creditors or its contributories. The purpose and concern of s596A has broadened over time and

‘that expanded concern is with the administration or enforcement of the law concerning public dealings of the corporation in external administration and its officers. The only vestige that remains of the old approach to the purpose that might have confined the predecessors to s596A is the public aspect of the purpose of the power’ at [169]. The Court concluded that the prevailing purpose of s596A was to address the administration of a corporation or the enforcement of the law concerning the corporation and its officers in public dealings, including the identification and prosecution of any corporate misfeasance. Further, that issuing a summons for the purpose of enforcing or ensuring compliance with the Act and protecting shareholders and/or creditors from corporate misconduct is a means of enforcing the law and serves

the public interest. The underlying purpose of the applicants’ summons was therefore legitimate.

Implications z The scope to seek examination of a former officer of a company has substantially widened. z Eligible persons may undertake a public examination as a form of preliminary discovery to help with a personal claim so long as it serves the public interest of law enforcement and compliance with the law concerning the public dealings of the corporation and its officers. z Public examinations do not have to be directly beneficial to the company in administration, its creditors or contributories. A claim for the benefit of some shareholders is consistent with the public interest in the proper external administration of a company.

*Fiona Reynolds MICM Partner, Turks T: 02 8257 5751 M: 0417 215 703 E: Fiona.Reynolds@turkslegal.com.au *Lucy Tindal Senior Associate, Turks T: 02 8257 5714 M: 0424 136 361 E: Lucy.Tindal@turkslegal.com.au

FOOTNOTES: 1

K imberley Diamonds Ltd v Arnautovic (FCAFC 2017); (2017) 252 FCR 244 at [30]

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 49

Leadership and High Performance

Credit & collections:

Understanding and navigating the ‘Great Resignation’ in Australia By Nikki Dennis MICM*

Nikki Dennis MICM

Jokers, nerds, extroverts, introverts, the ambitious, the easygoing, the shy, quiet, watchful, empathetic, apathetic, egocentric, optimist or negative nelly. Whatever the melting pot of personalities and traits await as you burst through the office doors to excitedly greet your new recruits, they all have one thing in common. They are all ready to judge you. And this is where many Credit & Collections Leaders make the biggest mistake. Pleased to have the gruelling recruitment process well and truly behind them with the best candidates chosen they think, “Now is their time to shine. To prove to me they are worthy of this role!” But make no mistake. Bright eyed and bushy tailed as they may be on that first day, thirsty for knowledge and eager to make their mark, it can so can quickly change. From day one your leadership and organisational culture is being assessed constantly by your new recruits.

Consequently, if you’ve ever wondered why several weeks/ months in, the spark has gone, the enthusiasm waned, and you are watching the hunched shoulders of the latest recruits walking for good out of the door…Guess what? They have judged you. And your organisation. And, it ain’t pretty! Welcome to what is being dubbed as the Great Resignation. There is no doubt about it, finding good people is tough enough – keeping them engaged throughout the months and years beyond, is even harder. And in the challenging world of Credit and Collections, juggling a healthy cashflow with customer expectations, rigorous compliance, rising hardship and vulnerability, and staff retention and wellbeing, is off the charts next level difficult! Which is why many collections teams are struggling. Don’t despair. There are ways in which your team can thrive in this environment and have an edge over your competitors. But before we get to that, let’s examine

“There is no doubt about it, finding good people is tough enough – keeping them engaged throughout the months and years beyond, is even harder.”

50 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Leadership and High Performance

“...recent research by PwC has found that as many as 38% of workers plan to leave their current employer during the next year (what-workers-want-report.pdf pwc. com.au) prompting what many are referring to as the Great Resignation.” the wider stats around the ‘great resignation’ phenomena and some of the reasons why people are leaving.

The Great Resignation – is it really happening, and why? Despite ABS data showing that overall job mobility was at its lowest in decades at 7.5% in Feb 2021, no doubt due to the uncertainty of the pandemic environment, recent research by PwC has found that as many as 38% of workers plan to leave their current employer during the next year (what-workers-wantreport.pdf pwc.com.au) prompting what many are referring to as the Great Resignation. Meanwhile in the US – a study by Microsoft revealed that over 41% of global employees were considering handing in their resignation. And in the UK, a study conducted by the recruitment firm Ranstad UK

showed that as many as 69% of workers were thinking of resigning in 2022, and the number of open job vacancies has continually hit record levels in recent months. So, what are the reasons for this mass exodus? The PwC report surmises that it may be created by a ‘sense of restlessness, or looking to regain control, after a significant period in lockdown’. Sociologists have suggested that ‘people have been particularly introspective as a result of the pandemic, which can often lead to job and career changes.’ Yet others believe ‘it has been building up in the background for some time, as people have been reluctant to change employers in an unstable market.’ For those questioning whether the Great Resignation currently being experienced overseas will affect Australia to the same extent – Recent NAB research has already

shown that 1 in 5 Australians have quit their job in the last year with close to 3 in 10 workers citing a lack of personal fulfillment and meaning; lack of career growth; their job’s impact on their mental health; and poor pay and benefits as ‘pushing them away’ from their jobs. Others called out poor work/life (23%) balance, burnout (22%), and feeling like a fresh start (20%). Whatever the reasons behind it, the reality is that this mass resignation has already started, and it’s reasonable to assume that Australian organisations are about to see record numbers of people walking out the door. Which in turn, will result in a corresponding shift in the balance of power from the employer to the employee. In the words of the PwC report;

“in the war for talent, it’s the worker who has the better bargaining position”. ➤

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 51

Leadership and High Performance

This also begs the question, what will be the real cost of high employee turnover to Australian organisations that don’t find a way to retain the best candidates? Reasonably recent data from the Work Institute’s 2020 Retention Report estimates that it costs as much as 30% of a worker’s annual salary to replace them. The average Australian salary in 2022 is $65,539 per year according to Talent.com. Therefore, in an organisation of 100 staff, if 38% walk out of the door as indicated by the PwC report, that could cost close to $750k!! But here’s the good part…by spending just a tenth of that on quality training and development for staff and leaders, you can position yourself as an ‘employer of choice’ which will give you a good chance at attracting and retaining the best staff.

Tips for credit & collections leaders to combat the Great Resignation Invest in your staff Out of adversity comes opportunity. There’s no doubt about it. Investing in your team has never been more pertinent and the benefits for those that do will be considerable. Richard Branson, known worldwide for his great leadership skills and the value he places on his employees, offers this: “Train people well enough so they can leave, treat them well enough so they don’t want to.” Never has that advice been so relevant as now in the aftermath of the pandemic. Conducting regular training sessions for employees and rolling out quality leadership programs increases motivation,

improves skills, raises confidence, and improves workplace culture. It shows that you care about their career development and where you see your employees in the future. All of which addresses many of the key reasons why people are leaving or looking to leave their jobs in the first place. Empowering your team with the soft skills to better connect, negotiate, and resolve conflict (both externally with customers and internally with staff) not only benefits your bottom line but gives them life skills that they can take into their personal relationships too. Therefore, adding meaning, fulfillment, and purpose to their roles, both in and out of work. Additionally, giving them practical training and guidance around dealing with challenging conversations and vulnerable customers protects their own

“Conducting regular training sessions for employees and rolling out quality leadership programs increases motivation, improves skills, raises confidence, and improves workplace culture.”

52 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Leadership and High Performance

emotions and well-being, making burnout and other mental health issues less likely. Tap into Government funding To encourage organisations to employ, upskill, and retain staff throughout the challenges of the pandemic environment, the federal government introduced the Boosting Apprenticeship Commencements (BAC) Scheme in October 2020. Due to finish, it was extended in the recent budget announcement until 30th June 2022. As part of the scheme, any employer who engages a new employee and enrols them in a certificate program could attract up to $28k in Government funding per person. Many organisations are using the funding from enrolling new employees in these programs to reinvest into wider training across the entire team. It’s the perfect time to take advantage of this funding initiative, upskill your team, and gain the competitive edge!

Recruit smarter It’s no secret that Collections and other front-line Leaders are struggling to find good staff. The onset of the pandemic and the related border restrictions put a stop to overseas workers and sent many of those already here scrambling back to their homelands to be close to family. The available workforce practically diminished overnight. In this environment, it is tempting to spread the net wider and not be as fastidious when hiring, in the desperation to attract anyone. This is a mistake. There is no use hiring someone if they don’t stay. Make sure you are clear on the role and requirements in your adverts and give yourself the

“As part of the scheme, any employer who engages a new employee and enrols them in a certificate program could attract up to $28k in Government funding per person.” best chance of matching the right person to the job by accessing collector behavioural profiling tools. This will help ensure that the person you are hiring has the right personality traits to suggest longevity in the role. As well as highlighting any areas in which they may require additional support through the onboarding process and beyond. Outsource when needed If you are finding it a real challenge to recruit and train internally then don’t be afraid to outsource when needed. Many organisations are turning to outsourcing for temporary or more permanent elements of their collections process. Gone are the days of only outsourcing contingent debt at 90 + days for your traditional debt collection services. Progressive agencies are now offering all sorts of outsourced assistance to assist with ‘billing resolution’ and ‘credit support’ in addition to the more standard thirdparty collections. From customer re-engagement campaigns and early receivables management to hardship assessment and monitoring, any of which can be conducted as first party in your company name if required.

your team to free up time spent on manual collections processes to streamline efficiencies. The modern world moves fast. People are on the move and want to pay their bills at a time convenient to them with as little effort and human intervention as possible. The best solutions out there are AI driven meaning that your customer gets to communicate with you exactly how they want to and in the language they choose. Think of the time you could save if over 80% of your customer base settled their account digitally within the first 24 hours of receiving their bill. How much more efficient (and happier) could your team be if they were there just to help the customers who needed to speak to someone and less bogged down with unnecessary and outdated manual processes? In summary, for collections and other front-line leaders with teams already under the pump, some facing record levels of debt that need collecting whilst simultaneously struggling to both attract and keep good staff, there are solutions out there to help you thrive in these uncertain times. The trick is to look for ways in which these solutions can work for you, whilst you continue to take the credit.

Go digital If you are bursting at the seams with overworked staff and struggling to bring on more people, it is worth investigating how digital technology can be employed within

*Nikki Dennis MICM Managing Partner/Co-Founder SalesCRED (specialists in credit management solutions). T: 0437 652 562 E: nikki@salescred.com.au www.linkedin.com/in/nikki-dennis

https://www.linkedin.com/in/nikki-dennis/

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 53

Insolvency

Small Business Restructuring Plans – a tool for the future? By Michelle Shackles and John Carrello MICM*

Michelle Shackles

We are sure there is some level of familiarity around the Corporations Amendment (Corporate Insolvency Reforms) Act 2020 passed by the government mid-December 2020. At that time, the purpose of the legislation was to provide support to small business after the lifting of the temporary legislative measures on 31 December 2020 imposed by the government to respond to the impact of COVID, and was effective from 1 January 2021. Part of this legislation was to provide the introduction of the Small Business Restructuring Plan (“SBRP”). There was an expectation that there would be a significant number of these SBRPs put to creditors for their consideration, however as twelve months of hindsight has told us, this simply wasn’t the case. So now that we are moving into 2022, and the economic landscape is again shifting, can we expect to see an increase in the use of these SBRP?

Let’s revisit the purpose of the legislation and consider some practical aspects to assist you in your role as a credit manager.

Small Business Restructuring

John Carrello MICM

In summary, these reforms provide for the directors of a company to appoint a Restructuring Practitioner

54 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

(“RP”) (who must be a Registered Liquidator) to enter a restructure phase and develop a Restructure Plan for the company moving forward. Key elements are summarised: — To be eligible, a Company must meet certain criteria which includes not having debts greater than 1 million dollars (not including employee entitlements which must be able to be paid in full). — The directors pass a resolution that the company is insolvent or likely to become insolvent and an RP should be appointed. — Once an RP is appointed, the company is in a proposal period for 20 business days, during which time the company can continue to trade while a Restructure Plan is developed. — During this period the company continues to trade in the “ordinary course of business”. — If a Restructure Plan is developed, the RP must provide a declaration that the eligibility criteria have been met, the company is likely to be able to discharge their obligations under the Restructure Plan, and all required information has been provided. — At this time, the company must have paid all employee entitlements and ensured that

Insolvency

“The ideal scenario for a successful SBRP is one where a company has need of this legislation as a result of an unforeseen event ... such as COVID.”

—

all ATO lodgements have been made and are up to date. Creditors are provided with the Restructure Plan and the declaration of the RP and are provided with 15 business days to vote on the Restructure Plan, which cannot be for a time period longer than 3 years. Different classes/types of creditors are treated differently under the plan. Secured creditors retain the ability to realise their interest during the period. Alternatively, they have an admissible debt to the extent of an estimated shortfall in value between the asset and the debt. A majority in value of the creditors entitled to vote must be in favour of the plan for it to be accepted.

Ultimately where parties are owed money, they want to ensure it will get repaid or that there is the potential of a long-term future that is in their best interests and that of the other creditors if they accept the proposal. The legislation provides no protection to creditors who have continued to trade with a company during this period, in that if the company goes into liquidation and a creditor has provided credit, that creditor may be subject to a preference payment claim. Our recommendation would be to only provide goods on a Cash on Delivery basis during this period. The treatment of secured creditors is complex, and the interaction of their security and the concept of an admissible debt may create some confusion in the plan.

Moving Forward The legislation is complex, and the above is a simplified overview. The aim of the legislation was to provide small businesses with a mechanism to continue trading while being given time to deal with their asset and creditor position.

But where does that leave credit managers trying to manage their debt collection process? In essence, this legislation is basically designed “to do a deal” with creditors, no investigation of the past is specifically required of the Director’s conduct, which is impractical given that the RP is required to make a recommendation to creditors (which means it must be done in any event).

If you are a secured creditor, ensure you obtain advice to understand your individual position. This legislation has no influence on the ATO’s existing powers as they relate to a Director’s personal liability in certain instances, which means a company can restructure its debts by way of compromise, continue trading, only to find that the ATO then pursues the director(s) under a Directors Penalty Notice. The ideal scenario for a successful SBRP is one where a company has need of this legislation as a result of an unforeseen event ... such as COVID. In addition to meeting the financial criteria, the company should have (sufficient)

cash at bank to continue trading, have no secured debt, solid financial controls, a track record of ATO compliance (by way of lodgements) and the ability to satisfy all employee entitlements for there to be a successful outcome.

Ensure that you receive sufficient information about the SBRP that you are being asked to consider. That would involve; — Specific details of the proposal itself; — If it is in the best interests of the creditors and in doing so, compare it to Liquidation; — What time period is the SBRP proposing (legislation specifies a maximum 3 year period however commerciality suggests a shorter time frame would increase the success of the plan); — Will the business have a future and how important is this creditor to your business; and — If there any other matters that creditors should be aware of in making their assessment.

Don’t be afraid to ask questions and seek further information if it is required to make a better assessment. We expect that the SBRP will become more widely used in the short to medium term. There will be queries and clarification along the road going forward, and the directors of BRI Ferrier Western Australia are here to assist. If you have any questions, please feel free to contact any of our directors on 08 6316 2600.

*Michelle Shackles Director *John Carrello MICM Principal BRI Ferrier T: +61 8 6316 2600 www.briferrier.com.au

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 55

Insolvency

Preference Claims and Insolvency Indicia – when is a company insolvent from the court’s perspective? By Andrew Blundell*

Justice Black, in the recent matter of Custom Bus Australia Pty Ltd (In Liquidation) [2021] NSWSC 1036 dealt with the issue of company solvency for the purposes of a preference claim. The judgment helpfully worked through the numerous factors that may indicate a Company is insolvent and provided a timely reminder to credit managers around the warning signs that they may encounter when dealing with clients that may find themselves in a position of financial distress.

Background Custom Bus Australia Pty Ltd (In Liquidation) (“the Company”) operated a bus building, service and maintenance business in both New South Wales and South Australia. My colleague, Mr. Simon Cathro, was one the Administrators appointed by the Company on 18 January 2018. I managed the ongoing trading of the business

Andrew Blundell

of the Company subject to the administrator’s appointment. The business turned over more than $43m for the year ended 30 June 2017 and at the time of the administrator’s appointment employed more than 150 people. Unfortunately, a major supplier withdrew support for the business during the voluntary administration process which resulted in production substantially ceasing. The administrators subsequently entered into a business/asset sale agreement prior to the second meeting of creditors, at which creditors present resolved to place the Company into Liquidation. Post liquidation, mothership preference proceedings were commenced against fourteen defendants whom the liquidators contended had been party to payments made by the Company within the relation back period, being the six-months prior to the

“The solvency of a company is determined by applying section 95A of the Corporations Act, with the key test as to whether a company is solvent being the cash flow test.”

56 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Insolvency

appointment of the administrators. The proceedings sought the courts confirmation that the Company had been insolvent for the entirety of the relation back period to assist in establishing that those payments constituted voidable preference claims.

Preference claims – what’s required? For a preference claim to be established, pursuant to s588FA and s588FE of the Corporations Act, the following elements need to be present: 1. The company and the creditor are parties to the transaction (even if someone else is also a party); 2. The transaction results in the creditor receiving from the company, in respect of an unsecured debt, more than the creditor would receive from

“a company’s readily available resources determines whether it can pay its debts as and when they fall due. If a company is not solvent, by definition, it is insolvent.” the company in respect of the debt if the transaction were set aside and the creditor were to prove for the debt in a winding up of the company; 3. Generally, the transaction was entered within six months of the relation back day, being the day either winding up proceedings were commenced or alternative the date the Company appointed a Liquidator and/or Administrator; and 4. The transaction was an insolvent transaction (i.e., it occurred at a time when the Company was insolvent).

Key test for solvency The solvency of a company is determined by applying section 95A of the Corporations Act, with the key test as to whether a company is solvent being the cash flow test. That is, a company’s readily available resources determines whether it can pay its debts as and when they fall due. If a company is not solvent, by definition, it is insolvent. Justice Black, in coming to his determination considered the position of the Company, its unique circumstances and referenced the findings in various ➤

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 57

Insolvency

cases, including what is still today recognised as the definitive case law in this area, Australian Securities and Investments

Commission v Plymin (No1) (2003) 175 FLR 124. In that matter, the court helpfully provided fourteen (14) indicators

that a company is insolvent and a number of those were present in relation to the Company. They are as follows:

Indicator

Evidence to Consider

Continuing losses

The historical trading results of a company establish whether it has been trading profitably over a defined period. This analysis allows a view to be formed about whether any profits generated were sufficient to cover any past losses. Ongoing losses will often erode a company’s remaining working capital. If a company was loss making, this can be reconciled against forecasts to identify underperforming revenue targets and/or increased expense items. In this matter, Black J recognised “the shortfall in the Company’s bus production against its forecast production, throughout much of the period, appears to have substantially contributed to the monthly losses over the period”

Liquidity ratios below 1

A liquidity ratio provides an analysis of a Company’s Current assets as compared to its current liabilities. Current assets are future economic benefits that are expected to be converted to cash within twelve months. Current liabilities are obligations that are expected to become due and payable within twelve months. A liquidity ratio of less than one means a company’s liabilities are worth more than its assets and could mean a company is unable to pay its debts as and when they fall due. In this matter, the Company’s liquidity ratio was below one from at least July 2016 onwards.

Overdue Commonwealth and State taxes

When a company is experiencing liquidity issues, it often neglects it taxes. Unfortunately, these statutory bodies are often seen as informal debt arrangements and by delaying payment, a company can fund its other creditors/suppliers who are required as part of its day-to-day trading. An increasing running balance, debt recovery action and failing to lodge returns/statements suggest distress. In this matter, the liquidators report identified a large tax liability owed by the Company following an audit that was completed by the Australian Taxation Office, which remained unpaid at the date of the administrator’s appointment – nearly one year later.

“When a company is experiencing liquidity issues, it often neglects it taxes. Unfortunately, these statutory bodies are often seen as informal debt arrangements and by delaying payment, a company can fund its other creditors/suppliers who are required as part of its day-to-day trading.” 58 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

Insolvency

Poor relationship with present Bank, including inability to borrow further funds

Whether a company could raise funds from the sale of assets/ businesses or by raising capital (equity) to allow it to meet the company’s liabilities as they fall due and payable during the period investigated and subsequent periods.

No access to alternative finance

As part of this analysis, consideration will be given to whether any offer for funding (especially from related parties) was genuine, and they were willing and able to contribute towards the working capitally. Whether the funding would improve the availability of cash to meet liabilities, or if it would merely substitute one form of debt with other short-term debts.

Inability to raise further equity capital

Whilst in this circumstance, there was discussion and ultimately draft financing documents provided to the Company, those funds were not in fact advanced and based on the amount to be advanced ($900,000), it would still be insufficient to meet the liabilities of the Company at the time they were due and payable.

Suppliers placing the company on cash on delivery or otherwise demanding special payments before resuming supply

It is important to consider a company’s history in meeting its debt obligations and its relationships with its creditors. If a company has failed to meet the original payment terms it is then necessary to examine the relationship between the company and the creditor, and whether there is a reasonable explanation (such as a dispute).

Creditors unpaid outside trading terms

Common signs include creditors pushed beyond credit terms, an increasing trend of aged creditors and/or an increasing total value of the creditors are indicators that a company is in distress.

Special arrangements with selected creditors

Payments to creditors of rounded sums which are not reconcilable to specific invoices

Solicitors’ letters, summons[es], judgments or warrants issued against the company

If the creditor-company relationship breaks down then creditors may start pressing for payment, taking further recovery, or changing their terms to cash on delivery. A company may prioritise its business-critical suppliers or make part-payments to keep creditors at bay. In this matter, there were numerous instances where suppliers had placed the Company on stop supply for extended periods and creditors whose debts were increasingly being paid outside of their accepted credit terms. There was extensive evidence of creditors being paid partially against invoices that had not been paid within normal trading terms.

Issuing of post-dated cheques

Cheques forward dated or presented when there is insufficient cash.

Dishonoured cheques

The modern version includes direct debits and scheduled internet banking payments failing due to insufficient funds.

Outcome of the proceedings Based on the facts before him, Black J found that the Company was insolvent within the meaning of s 95A of the Corporations Act for the whole of the relation back period. This solidified the liquidators position surrounding the pursuant of preference payments that

were made during that period to the relevant fourteen (14) named defendant creditors within the proceedings. Not all the noted indicators need to be present to determine the solvency of a company and the judge was careful to note that the individual circumstances of a

matter need to be considered when answering the ultimate question as to whether a company can pay its debts when they become due and payable. *Andrew Blundell Principal, Cathro & Partners GPO Box 3368, Sydney NSW 2001 www.cathropartners.com.au

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 59

DIVISION REPORT

Member anniversaries We recognise those members who achieved membership anniversaries between January and March 2022. Congratulations to these members on achieving such important milestones. Name

Designation

State

Company

Years of Service

Joseph

Gauthier

MICM

Retired

45 years

Henry

Sampson

LICM

VIC

Retired

45 years

Mary

Jeffries

MICM

Retired

40 years

Christine

McMahon

LICM

Retired

40 years

Robert

Brissett

MICM

NSW

David

Jeffs

MICM

Peter

Adams

MICM

Clive

Croxton

MICM

Jason

Louis

Susan

Spehr

Robyn

30 years Retired

30 years

NSW

Adams & Partners Lawyers

25 years

QLD

Resources and Investment Finance Limited

25 years

MICM CCE

BGC (Australia) Pty Ltd

25 years

MICM

Polyaire Pty Ltd

25 years

MacLean

MICM

NSW

Dux Manufacturing limited

20 years

Daniel

Taylor

MICM

NSW

Credit Collection Services Group Pty Ltd

20 years

Bridgette

Allen

MICM

VIC

Vossloh Cogifer Australia Pty Ltd

15 years

Murray

Ashford

MICM CCE

QLD

Hanson Construction Materials Pty Ltd

15 years

Katrina

De Kaste

MICM

TAS

Tasmanian Collection Service

15 years

Marie

Fellows

MICM CCE

NSW

Transurban Limited

15 years

Carolann

Skerratt

MICM CCE

QLD

Cement Australia Pty Ltd

15 years

Andrew

Williams

MICM

VIC

Qudos Bank

15 years

Paul

Wright

MICM

VIC

BP Australia Pty Ltd

15 years

John

Madsen

MICM

Madsen O’Dea

10 years

Rabia

Porter

MICM

NSW

Instant Access Australia

10 years

Nadarajah Ramraj

MICM

NSW

Fuji Xerox Australia Pty Ltd

10 years

Corrine

Riley

MICM

NSW

GrainCorp Operations Limited

10 years

Andrew

Ruigrok

MICM

VIC

Brightstar Logistics Pty Ltd

10 years

Moses

Samaha

MICM

NSW

Equifax

10 years

Belinda

Walker

MICM

VIC

Adidas Australia Pty Ltd

10 years

Shane

Woolley

MICM

VIC

RACV Finance

10 years

Bridgitte

Brown

MICM

QLD

Transurban Limited

5 years

Andrew

Castledine

MICM

NSW

Equifax

5 years

Ian

Gale

MICM

VIC

Adecco Australia

5 years

Beverley

Hartsorn

MICM

VIC

Adecco Australia

5 years

Peter

Hazadonis

MICM

NSW

Risk Consultant

5 years

Julie

Herbette

MICM

VIC

Adecco Australia

5 years

Jennifer

Ker

MICM

VIC

Margaret

Leahy

MICM

QLD

Nutrien Ag Solutions Limited

5 years

Yunfei

Lei

MICM

NSW

Sydney Markets Credit Service Co-Operative Ltd

5 years

Claude

Maroun

MICM

NSW

Equifax

5 years

Rachel

Moher

MICM

VIC

Adecco Australia

5 years

Krystle

Owen

MICM

NSW

Transurban Limited

5 years

Andrew

Paton

MICM

VIC

Sonia

Rosenthal

MICM

NSW

Adecco Australia

5 years

Nicole

Rosenthal

MICM

QLD

Foundation Solutions

5 years

Aimy

Schembri

MICM

NSW

Transurban Limited

5 years

Wes

Smith

MICM

Capricorn Society Ltd

5 years

Gary

Thorley

MICM

QLD

Charter Mercantile Pty Ltd

5 years

60 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

2022

National Credit Team of the Year

Recognising credit excellence in 2022

The National Credit Team of the Year Award is an opportunity for credit teams to be recognised for the outstanding work, results, culture and learning they undertake.

PAST WINNERS

Nominating your credit team has many personal and professional benefits including the chance to: l Demonstrate best practices in credit management l Gain team and individual recognition within the credit industry and internally within your company l Develop personal presentation skills l Build team spirit. Past participants rate this process as one of the most rewarding and fulfilling times in their careers when they take the time to reflect on their team’s achievements.

2021: Synergy

2020: Woolworths

Applications will open in June 2022, applications close 30 July 2022. Equifax has been sponsor of Credit Team of the Year since its inception in 2008.

For more information and entry requirements CLICK HERE or phone 1300 560 996

2019: AGL

PROUDLY SPONSORED BY

2018: Recoveriescorp

APPLIC ATION S

CLOSE 30 JUL Y

DIVISION REPORT

South Australia

Nathan Schwarz, Lesley King (both Deloitte), Krystal Jones (Homestart) and Neil Fennell (SA Division President).

President’s Report We have had a good start to 2022! The SA Division has been busy, having already held our annual Fringe event that started at the Stag Hotel with a few drinks and nibbles. We then went across to Rymill Park to watch a follow-up show at Glutony which is one of the main outdoor venues for the Fringe. We watched the highly entertaining Rouge Circus and were in awe of their amazing acrobatic abilities. It was a thoroughly enjoyable evening and Gemma McGrice from NCI did another great job in organising it. We are pleased to report that in Jan/Feb we have had a good increase in membership numbers. This was largely attributable to Nick Cooper (ex-President AICM) at Oracle Insolvency Services. It’s good to see them return to the AICM. They have been great supporters of the AICM in the past and we look forward to their ongoing participation at events. In addition, we have been busy planning several other events for the year ahead and we are finalising details for the much-anticipated Economic Breakfast. The last one held at the Lion Hotel was a popular and very informative breakfast and we look to emulate that success again this year. We have been fortunate enough to secure a guest speaker from Deloitte Economics. As we all know, there is a tremendous amount of speculation and economic uncertainty about the business community

62 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

in relation to inflation, interest rates, etc. We eagerly await any predictions and forecasts about any future economic activity that Deloittes might be able to offer. We are also in the process of organising the Risk Management Seminar and the very popular and well attended Women in Credit Luncheon (WINC’s). It’s great that Alice Carter (ex-President AICM) from Lynch Meyer will be involved in these important events – she always does a fantastic job! Alice will be assisted respectively by Briana Harris from Oakbridge Lawyers and Gemma McGrice from NCI. They make a great team, and we look forward to these two important functions. We also very pleased to announce that Cameron Henderson from Oakbrige Lawyers will be assisting the SA Council with the membership portfolio. He is a former state YCP winner and was a contender for the 2021 National Young Credit Professional of the Year. Prior to joining Oakbridge, Cameron worked for the South Australian Chamber of Commerce and Industry, a leading Adelaide commercial law firm and as a Ministerial adviser to the South Australian Government. He breadth of experience and capabilities will make a valuable contribution to the SA Division. We have recently held our state elections in SA and Labor won easily. After 16 years of Labor government in SA from 2002-18, the Liberals were defeated after

South Australia DIVISION REPORT

Members and guests preparing to go to the SA Fringe Festival.

a single term. An expected result here in SA and let’s see what implications that will have on the upcoming federal elections in May. – Neil Fennell MICM SA Division President

Fringe Event 2022 On Thursday, 17 March 2022 the SA Division held an event to celebrate the Southern Hemispheres Largest, and Australia’s biggest, open access arts festival – the Fringe Festival. From big names in the world of entertainment to unknown artists looking to build their careers, the Fringe caters for everyone and includes theatre, comedy, dance, physical theatre, circus, cabaret, children’s shows, musicals, opera, music, spoken word, exhibitions, and events. This year, members first had a chance to catchup at The Stag Public House, which was followed by attending Rouge, otherwise known as a “Circus for grown-ups”. Having been awarded Best Circus Adelaide Fringe 2020, and weekly awards for Best Circus at Adelaide Fringe 2018 and FRINGE WORLD 2019, members were dazzled by acrobatics, cabaret, and burlesque performances. The event provided a much-anticipated chance for members to catch up and celebrate the Festival State’s most decadent event.

Members in spotlight The SA Division is extremely fortunate to have a variety of accomplished credit professionals from a range of different backgrounds, and we are proud to introduce them to the other States. For this edition of the magazine, we would like to spotlight some of these members, whose dedication to the AICM and service to the profession as a whole is worthy of celebration and recognition.

Rob Naudi MICM Rob has been a member of the AICM for 27 years and is a Registered Liquidator and Director at Rodgers Reidy. Rob has the following to say about his professional experience and accomplishments: Rob Naudi MICM

What is your biggest professional accomplishment to date? My first thought was winning a very long court battle over 5 years, but even that doesn’t give the same sense of accomplishment as paying a dividend of 100 cents in the dollar plus interest.

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 63

DIVISION REPORT

South Australia What advice can you give to emerging credit/insolvency professionals? Be involved in the AICM by attending training courses, networking with your peers and if possible, attending the national conferences. The AICM is your resource to develop your career and create relationships with like-minded people.

What has been your biggest professional challenge to date? Having just turned 56, I am tempted to say getting up in the morning. I think it has been the last two years like most people have been a real challenge for most. As a liquidator and trustee in bankruptcy there has been a sharp decline in new appointments, a position that was not expected by anyone. Managing the numerous aspects associated with little new work flowing in, keeping talented and valued staff employed and happy, and paying the continuing bills creates a situation where you are advising yourself as a client on cash flow management, forecasting, stress point analysis and options to get through the downturn in new work whilst being mindful that the market will turn and being ready to capture that opportunity when it happens.

What has being a member of the AICM done for you? I originally started in credit management. At the time I moved from auditing, so I had no network of people to discuss issues that faced me. The AICM introduced me to a valued database of like-minded professionals and provided industry specific training on both key issues and developing changes in law. Being a member gave me the opportunity to give my best in my then career change and also gave me the opportunity to give back as a state committee member. Taking on that role further enhanced my network of contacts in the profession and created relationships that I still maintain and value today.

What are your favourite things to do outside of your profession? I have always enjoyed fishing, camping and 4wding. The solitude of these activities is relaxing and a great escape from what can be quite stressful activities associated with insolvency services. More recently I have acquired a specific rifle for long range shooting. I should note that this activity is with the express permission of my partner who in no uncertain terms has permitted this activity on the condition no animals will be harmed in the process. Paper targets and steel plates at 1,000 metres however are fair game.

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Lisa Anderson FICM CCE Lisa is a Credit and Customer Service Manager at Coopers Brewery and has been a member of the AICM for 16 years. Lisa has the following to say about her experience and involvement with the AICM.

What is your biggest professional accomplishment to date?

Lisa Anderson FICM CCE

Every day is a new professional accomplishment, everyday regardless of how repetitive it can be there is always something new thrown your way that you must deal with respectfully and professionally. For me it is not just one thing, I am grateful to have the opportunity to take what I have learnt over the years and pass the knowledge onto the next generation coming up the ranks.

What advice can you give to emerging credit professionals? Never be afraid to ask questions, always be courteous, listen to your customer both internal and external and be open minded as everyone’s situation is different. Trust your training and believe in yourself. Never take it for granted.

What has been your biggest professional challenge to date? Dealing with the challenges of the Covid era, not everyone can work from home, some jobs need you to be hands on, this creates challenges of making sure you and your team have the necessary resources to get the job done with the high quality of customer service that has been expected, and it is done safely. Knowing that safety for yourself and others is at the top of everyone’s list and that it is the hottest and most sensitive topics in our society today.

What has being a member of the AICM done for you? Being a member of the AICM has given me a chance to grow within the Credit Industry and learn from mentors who eventually become your peers. Building a great network of like-minded professionals from diverse cultures and business. The AICM allows you to engage, enquire, learn, and contribute to the changes that affect and influence the Credit world.

What are your favourite things to do outside of your profession? Like most people who answer this question… friends

South Australia

Allison Balkauskas MICM Allison is a Credit Manager for MSP Group of Companies and has been a member of the AICM since 2004. With a wealth of knowledge and experience, Allison has the following to say about her experience with the AICM.

What is your biggest professional accomplishment to date?

supporting our customers on credit so they can complete projects and keep their cash flow going while still limiting our exposure and trading within agreed terms.

What has being a member of the AICM done for you? At the start of my career the AICM provided invaluable training to learn the practices and principles of credit management. Over the years the AICM has also given me the opportunity to connect with like-minded individuals. Making connections in the credit industry is the best way to refine your skills, learn from and support other credit professionals.

What are your favourite things to do outside of your profession?

Allison Balkauskas MICM

After 10 years working in the credit team with the MSP Group, I was promoted to the position of Credit Manager in 2018. I was given the opportunity to oversee the credit management of 16 trading companies leading a team of 5 credit controllers. I regard building and supporting a cohesive, proactive and result driven team as my biggest accomplishment.

My favourite thing to do is to go camping with my family. We love to get away in our caravan to enjoy the fresh air and build family memories. I also love gardening, socialising with friends, reading and a good wine.

The Australian Institute of Credit Management welcomes our Partners for 2022 National Partners

What advice can you give to emerging credit professionals? My advice to any emerging credit professional is to communicate and negotiate while being honest and fair. The best outcome for your business is to recover a debt with the least expense and intervention as possible. I find picking up the phone and having an honest conversation will help you to assess the risk of the situation in a way that cannot be communicated by text or email. Work with your customer for a repayment option that is achievable while also retaining the customer relationship. I believe that treating people fairly and communicating exactly what you expect will generally result in a mutually beneficial outcome.

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Divisional Partners

What has been your biggest professional challenge to date? The biggest professional challenge I have faced is the impact of Covid on the building industry and management of credit exposure. The building and construction industry are experiencing shortages of Timber and Steel pushing the prices high and limiting supply to our customers. From a credit perspective this has been a difficult time to manage as our customers are working with fixed priced contracts while paying unanticipated prices on supplies. In addition to this we have seen a reduction in trade credit insurance limits across the industry. It is a balancing act at the moment,

Official Division Supporting Sponsors

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

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DIVISION REPORT

and family but realistically life and work can get in the way of this too. So, to encourage the friends and family connection, I pull on a Pinny (for those of the younger generation an apron) and bake up a storm of cakes, cupcakes, biscuits, and that odd, unusual recipe I’ve always wanted to try…. And find I will never do it again!

DIVISION REPORT

Western Australia/Northern Territory

Our presenter Daniel Deplazzi from Deloitte Access Economics.

WA Director Rowan McClarty presents Daniel Czaplinski (NCI) with his 5 year achievement certificate.

Kevin Allen (Equifax), Steve Mitchison (BBB Advisory), Steve Thomas (Imdex Credit Services), Jeremy Coote (BGC) and Raff Di Renzo (Nova Legal).

WA Divisional Report The WA AICM held the 2022 Economic Breakfast on 16th of March this year, a bit earlier than last year. It was held again at Doubletree by Hilton in Northbridge. This year’s turnout was more cosy than last year which can be attributed to the current wave of covid cases in WA. The members that could make it were treated to another captivating presentation by Aiden Depiazzi, a Manager of Deloitte Access Colin Wagstaff (QBE), Joylon Ralph, Daniel Czaplinski, Sarah Bracegirdle (all NCI). Economics. We were informed that the Australian Economy These are but a taste of the information on offer is back to growth mode; to the tune of 3.4% in the to members who can join us on these breakfast December 2021 quarter. Inflation in Australia is more presentations. modest than elsewhere in the world, chiefly driven by Speaking of taste, the food at this year’s event was Transport and Housing – these figures taken before the also well presented and complimented by our attendees. current hostilities in Ukraine and the concurrent surge in Meals were brought out promptly and professionally Oil price which would flow through to Transport. And that with special dietary requirements catered for as needed. the Building sector in WA has more work activity in its Overall it was another successful event from the Institute future than it has in many years. and we look forward to seeing you on the next outing.

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Western Australia/Northern Territory

Meet a WA Councillor Cheri Bowater Cheri is the Credit Manager for Summit Rural (WA) Pty Ltd. She specialises in the Agricultural Industry and work with Growers all over Western Australia in remote Wheatbelt & Dairy areas. I have been in the Credit Industry for over 20 years and started as a Credit Manager for United Farmers Cheri Bowater Cooperative Ltd originally. I decided I needed to be amongst like minded people and keep up to date in the industry. I discovered the AICM was a perfect fit for this requirement. I joined in 2008 as an MICM and joined the WA council as Treasurer in late 2021. I have just undertaken the Diploma in Credit Management course offered by AICM in order to increase my knowledge overall. I really respect and admire what the AICM stands for and is trying to achieve in Australia with regards to training, networking, further education opportunities, recognition for achievements and fellowship. I have met some amazing people through the AICM, but I think the highlight was being able to attend my first AICM National Conference in 2019. This has cemented some lasting friendships and great networking opportunities. I originally trained as a Para legal in the United States and spent a few years working for Hughes Aircraft Company processing Security Clearances. I came to Australia and Credit Management and the legislation pertaining to it seemed a good fit for me. One of my favourite movies is Ghostbusters (pop culture nerd alert) and a quote I use a lot is from DR Peter Venkman: “I love this plan! I’m excited to be a part of it! Let’s do it!” I love animal husbandry and grew up with horses, but nowadays, I have swapped my pony for a Cannondale

Bicycle. I frequently travel around WA country towns in my Caravan with my Bike on the back and my Golf Clubs in the boot!

The Australian Institute of Credit Management welcomes our Partners for 2022 National Partners

Trusted Insights. Responsible Decisions.

Divisional Partners

Official Division Supporting Sponsors

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Eric Seignol (AON), Trevor Greenhill, Bobby Stamatoski (both Cloud Payment Group), Cameron Miller (Equifax), Aiden Deplazzi (Deloitte Access Economics), Rowan McClarty (WA Director).

DIVISION REPORT

Queensland

Vanessa Hartwell (KBH Solutions) receives her 15 year membership from AICM CEO Nick Pilavidis.

Renee Dobson (NCI), Kirsty Gray (Stoddarts) and Maria Tisdell (NCI) all celebrating their 5 year membership milestone.

New divisional partner Warwick Ballantine-Jones (CMA Collections) with Toni Sawyer (AICM).

New divisional partner Accessii Group’s Lynne Walton and Ashlee Le Roux celebrate being added to the banners.

President’s report.

On some very happy and exciting news, Qld are very fortunate to have three new partners join our current partners (Results Legal and Vincents.) We wish to welcome Accessii Group, CMA & Esker to the Qld team, It’s great to have you on board! The Qld council has also welcomed a new Councillor to the group, Michael Blonk who is looking after our consumer portfolio. If there are any Qld members who wish to join council, or be involved in some way please reach out, I’m always happy to have a chat. The Economic breakfast kicked off in February with Justin Green from NAB presenting to our CCE’s and members, giving us an insight to 2022. We welcomed our newest CCE Bill Simon and we also recognised

I don’t like starting out this report sombrely, however, this year has not been kind to our Qld members, with large storms and constant rain soaking large parts of Southeast Qld and now into Northern NSW. This meant that once again we were underwater. Now that the rain has cleared, and the waters have receded the Mud Army is back out in force to help clean up the devastating mess left behind. I hope all our members are safe and well during this hard time. This meant that we also had to postpone our first social night of the year to May, when members can attend safely. Keep an eye out for the new date and registration link.

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Queensland

the recertification for CCE’s Fiona Doherty, Julie McNamara & Maria Schandl. This was another sold out event, so please keep this in mind when an event flyer hits your inbox – you need to register early! I’m looking forward to the National Insolvency Seminar which is being held in Brisbane on 8th April at Rydges, Southbank. This event is one not to be missed and I’m looking forward to seeing our members again face to face. Thank you, – Stacey Woodward MICM Qld Division President

Corinne Tran (Vincents), Melissa Hartley (Shell), Ashelee Le Roux (Accessii), Asheleigh Mason (Shell) Nikki Pryor (Marsh) and Decia Guttormsen (University of Queensland).

Economic Breakfast Our Economic Breakfast which was held on the 24th February at Darling & Co in Paddington was well attended this year and is fast becoming a valued event for our members. Andrew Forbes, Partner at Turks delivered an engaging welcome to country and this was followed by an insightful look into 2022 by our key presenter Justin Green, Economic Specialist and Associate Director of Business and Corporate Markets at National Australia Bank.

Maria Schandl (Stramit), Kirsty Gray (Stoddarts), Matthew Joiner (Cor Cordis), Alicia Auden, Daniel Johnson (both JHK Legal), Josephine Decuyper (Cor Cordis) and Fiona Doherty (Councillor).

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Our breakfast celebrated CCE’s: Bill Simon (Fletcher Building), Merv Mahony (Councillor and CCE Chair), Maureen Greaves (Harrington Bobcat & Excavation), Elizabeth Morris (Endeavour Foundation), Linda Risdale (Bolton Clarke), Karen Clarkson (Iplex) and Judith Riley (Toll Group).

DIVISION REPORT

Queensland

Carly Rae-Orth (Councillor), Stacey Woodward (Qld President) and Nick Combis (Vincents). 20 of our 37 State CCE’s attended, which was a great result and a good opportunity to welcome our new CCE’s in Maureen Greaves and Bill Simon. Recertification certificates were presented to Fiona Doherty, Julie McNamara, and Maria Schandl. We were able to recognise members who had reached their 15-year anniversary (Vanessa Hartwell & Erica Barron) and three members who celebrated 5 years with the AICM (Renee Dobson, Kirsty Gray & Maria Tisdell).

Fiona Doherty (Qld Treasurer), Julie McNamara (Qld Director) and Maria Schandl (Stramit) were presented with their CCE recertifications.

The Australian Institute of Credit Management welcomes our Partners for 2022 National Partners

Trusted Insights. Responsible Decisions.

Divisional Partners

AICM CEO Nick Pilavidis with our new CCE Bill Simon.

Official Division Supporting Sponsors

Andrew Forbes of our event sponsor Turks performs an acknowledgement of country.

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Victoria/Tasmania

Councillor and 2021 CCE Dux Ricky Forster receives his certificate from Vic/Tas CCE Chair Mary Petreski.

Kim Radok (Credit Matters) with Terrence Nyadongo (Talefin).

Chris Jurotte and Phillip Cooke (both Australian Pharmaceutical Industries).

President’s report

with the support shown by having people turning up to events too. We have a couple of new faces joining the council this year (formal intros to follow) and will kick off our local Tasmanian subcommittee in a little while. As always, we love hearing from our members and if you would like to get involved in hosting events, welcoming new members or writing articles for the magazine, please get in touch with any of us on Council. We have so many fun events planned this year and the National WINC webinar series running over the next few months. Get involved, come along to events and share your opinion, we want to hear from you. Stay well and we look forward to seeing you at the next event!

What a wonderful start to 2022! We were lucky enough to have our Victorian Golf Day for the first time in 2 years! The weather even held up for us after a bit of a wet start and I got to traipse around on the drinks cart and say hi to every single player. It was a very successful event, definitely one of the favourites for our Vic/Tas members here. A fun event was followed by an educational and informative event with our Economic Breakfast. We had Dean Pearson from NAB somehow make economics funny and relatable. A lovely brekky supplied by the Jasper Hotel too. Of course, neither of these events would have been possible without our partners! We are so grateful for the ongoing support we receive from our sponsors, together

– Catrina Galanti MICM CCE Vic/Tas President

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Allan Kawalsky of event supporter TurksLegal welcomes members and guests to the Economic Breakfast.

DIVISION REPORT

Victoria/Tasmania

And we’re back - 2022 Vic/Tas golf day returns with a fantastic turnout, thank you to our event supporters that allow us to hold such an amazing day! Runners up were Vince and Associates, Ian Grant, James Kerr, Benn Hibell and Dan Burr, and 3rd place was Equifax, Mark Thomas, Tim Ward, Ash Schmaker and Steve Lesta. A huge thanks to our major sponsors for their participation and contribution: NCI, CreditorWatch, Equifax, SV Partners and SPK Glass. A special thanks to Cor Cordis for the putting the “hole in one” prize of $40,000 CASH, and also to the golf Joe Losinno (Nutrien), Vaios Kortikis (Middy’s Electrical), Spiro Pikoulas (ARMA), pro Mitch on the 6th hole allowing Nunzio Settinelli (AWM Electrical & Seadan Group). the golfers to take one of his shots, which resulted in collecting $1,200 for the AICM Education Foundation (didn’t help our team at all as we were left with a 15 foot putt). The day wouldn’t have been as big a success without the help of both Vic/Tas President Catrina Galanti and Vic/Tas Vice President Michelle Carruthers -and assisting on the golf registration desk. Also a massive thank you to Brian Kay for driving all the way from Ballarat to take all the happy snaps while avoiding the barrage of golf balls as the players attempted to take out the cash prize on the 12th hole. – Lou Caldararo LICM CCE

Stopline: Andrew McLeish (Stopline), Rob Sacco (CPS Packaging) and Lachlan McLeish (PwC).

Golf Day – Friday 18 Feb 2022 Southern Golf Club was in pristine condition for the 16th Vic/Tas Golf Day. It was a sold-out event with over 130 people in attendance. A great time was had by all, and we especially thank those that walked the course! The winning team was Select Harvest, David Harris, Dallas Attwell, Suzanna Douglas and Peter Petrophlous. Congratulations again!

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VIC/TAS Director

Economic Breakfast - Friday 4 February 2022 Sponsored by Turks Our first breakfast of the year was a sell out at the Jasper Hotel! We were lucky enough to have the amazing Dean Pearson, Head of Behavioural & Industry Economics at National Australia Bank (NAB) speak to us again.

Victoria/Tasmania

– Michelle Carruthers MICM Vic/Tas Vice President

Special Membership Milestone announcement z Gerrad Harper from Guild Insurance – 15 year anniversary z Mal Pericic from GWA Group Limited – 30 year anniversary

Tell us about your career? I started as a credit officer at Puma for 2 and half years and then I decided to upskill myself through the AICM Diploma of credit management over 2 years and after one of my presentations in the course I was head hunted by a person at Nike and then I became their credit manager. Not long after, through the sports bureau I learnt that my old boss at Puma had left and that his role was available “credit manager”, so I went back at Puma and I’ve been there ever since (14 years).

Advice for young people? Be a part of an association in your industry or profession. The AICM has been a key driver of my learning over the years. It keeps me updated with changes in the industry for example automation, PPSR, EDI for sending invoices and different approaches businesses took during Covid.

What has really impressed me about the AICM

Members in spotlight

is that it has legitimised the industry and turned credit and collections into a profession and made it known that it’s part of every business.

Andrew Wood MICM Credit Manager at Puma Oceania, 15 years of membership with the AICM

How did you manage during Covid? Covid tested how robust our processes are and that really became important to us and I’m happy to say they stood up.

How did you get into credit? I completed a marketing and management degree at the University of Newcastle, then moved to Melbourne to be closer to family and wanted to live in a bigger city. I had family ties in

the credit industry in Melbourne and got a job in debt collection at Total Credit Management (bought by Collection House). I did a lot of Australian collections and then referred a lot of international collections to international agencies in Philippines, Taiwan, Jamaica and New Zealand. In this role I learnt what was accepted in other countries to collect debt for example in South East Asia – they put an ad in the paper to say that somebody owes money or park a truck outside their home, with a billboard on it saying that the person owes money. My clients were big, reputable business and I began to wonder what my client’s job was like, as they were referring this work to me and that’s how my interest in credit came about.

Tell us a little about you outside of work.

Andrew Wood MICM

I enjoy gym, running, swimming and I’m training for “run for the kids” in April this year. I’ve run a couple of marathons too. I have two boys and play a lot of guitar. We are also building a new house at the moment which is taking up a lot of our time.

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Some key highlights from Dean’s statistics include: z Strong employment growth, which suggests that employees will be expecting a pay rise in 2023. z Developers are pulling back on land release as they cannot meet construction demand due to supply issues. z With many Australian’s emerging from extended lockdowns during the final quarter of 2021 wellbeing rebounded sharply to levels last seen in Q3 2019. The improvement in overall wellbeing was led by a sharp uplift in life satisfaction and happiness. z Many habits formed during the crisis are likely to endure well beyond it, presenting businesses with the opportunity to align to changing consumer mindsets and shape emerging habits in the workplace. A big thanks to Turks for sponsoring the breakfast and to Mary Petreski for co-hosting the event with me. Mary Petreski, our Certified Credit Executive (CCE) Portfolio Chair, also presented the CCE Certificates to the below deserving recipients, and a BIG congratulations again to Ricky Forster who received Dux in 2021. Jeffrey Hurst – 2003 Recertification Lou Caldararo – 2003 Recertification Paul Canavan – 2006 Recertification Sherif Hussein – 2015 Recertification Ricky Forster – New CCE’s 2021 & CCE Dux 2021 Mal Pericic – New CCE’s 2021

DIVISION REPORT

Victoria/Tasmania Anthony Mackwell (Tony) FICM from Victorian Managed Insurance Authority (VMIA), 25 years of AICM membership

How did you get into credit? I initially started off in the banking sector and then I worked for a domestic building warranty insurer, Tony Mackwell MICM called HGFL. I started off as a claims officer and then in a recoveries role. Meanwhile, I completed my associate diploma of credit management and worked at the Housing Guarantee Fund for 16 years. I then worked as a credit manager at Reece Group for 7 years and I’m now back with one of the current domestic building warranty insurers, VMIA.

What do you enjoy about your job? I enjoy being a mentor for the younger members of our team and watching their careers grow.

What do you enjoy about the AICM? I’ve been on council for over 11 years and really enjoyed being able to enhance young people’s careers in any way possible, and that was the reason why I went on council. On council my portfolios were young credit professional awards (YCPA), sponsorship and CCE, as well as being the National YCPA Coordinator, a Division President and represented the Division as a Director on the National Board. I was also privileged to be the Master of Ceremonies at Vic/Tas AICM dinners and award nights, for several years.

I’m a crew member on a yacht and we compete down in Hastings in Western Port Bay.

Councillor update The lovely Alan Izra from McMahon Fearnley Lawyers is stepping down to spend more time with his family. Alan has been a fantastic contributor on council and always shares law updates in an easy to understand manner. Thank you Alan, you will be missed!

Alan Izra

The Australian Institute of Credit Management welcomes our Partners for 2022 National Partners Trusted Insights. Responsible Decisions.

Divisional Partners

What challenges are you seeing and future thoughts? We had a record number of certificates issued for builds in 2021. We assist the homeowner in getting their works completed just in case the builder goes bust. In 2022, builders are going to face a lot of challenges, including timber shortages and staffing issues.

Official Division Supporting Sponsors

What advice would you give young credit professionals? Any young members under the age of 30 should apply for YPCA because, through my experience, it’s amazing to see what their profile and CV looks like after going through the application process and/or winning the award. The younger people will get a shock at how experienced they are and how they can expand their careers.

Tell us a little bit about yourself? I’m originally from NZ, so I’m heavily involved in sailing.

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New South Wales DIVISION REPORT

Our amazing MC Balveen Saini with a full house of WINC attendees.

Natalie Hodges (NCI) with Shalini Arora (Sol Distribution).

Jacinta Highfield (Equifax) and Wendy Yip (Verstone).

President’s Report

The NSW council is currently going through some small changes: z Arthur Tchetchenian has stepped down from council to focus on work, I would like to thank Arthur for his contributions to date especially within the Membership portfolio. z Kimberly Watts is starting maternity leave to welcome in baby #4! We wish you all the very best and look forward to meeting bubs! This does however open the door to anyone who is interested in coming along to check out what council is all about or to lend a hand with upcoming events/committees. If interested, please reach out to: theresa.brown@optus.com.au

Firstly, my thoughts and prayers go out to any NSW (or other) flood affected members. It has been devastating to witness firsthand the damages to so many and it appears we are not over it yet, as I write this NSW is being told to brace themselves for another week of heavy rain. Aside from Fires, Floods and Flu NSW has been able to add another “F” word to the 2022 vocabulary…. “FUN”. NSW Council has been successful in hosting 3 events this quarter: WINC, Economic Breakfast and the Social Networking Night at Archie Brothers. It has been such a nice sight to see so many members come together and catch up on missed times and genuinely having some fun.

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New South Wales

Alexis Wolfe (Endometriosis Australia), Debbie Leo (AICM Director), Mandi Gunsberger (Speaker), Theresa Brown (NSW President), Balveen Saini (NSW Councillor and WINC MC).

The NCI team out in force to support WINC - Rebecca Bishop, Jacqui Ross, Anthea Ladeyuowa, Natalie Hodges, Janet Fenech (Atradius), Michelle Cann, Georgina Facchin, Kate McGrath and Eliza Mackenzie. NSW council is looking forward to seeing you at the upcoming Risk Seminar scheduled for 12 April – registrations are now open. – Theresa Brown MICM CCE NSW Division President

WINC, 25 February The Women in Credit Luncheons (WINC) are our renowned networking event where credit professionals meet to connect, recognise, and share the stories and achievements of exceptional women. AICM are committed to recognising and progressing women in the

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credit industry and strive to provide more opportunities to enhance careers. The much-anticipated WINC that was postponed from last year was worth the wait. The 2022 Luncheon on Friday 25 February was truly inspiring, educational, and entertaining. It was held at Dockside in Darling Harbour, and it was a packed event with almost 200 attendees. This year our MC was Balveen from BBW Lawyers. Endometriosis is a health issue that impacts so many women around us. It is often misunderstood and not spoken about, like many other ‘women’s issues. This event was a great chance to raise awareness and funds for Endometriosis Australia.

New South Wales

Melanie Cochrane (Equifax) with Aleks Glisic (Athena).

Debbie Leo from Equifax shared her own personal experience which resonated with so many in the room. It was humbling to have such a powerful story shared amongst colleagues, members, and friends. There were more than a few teary eyes amongst the audience as we could relate to or just appreciate the strength of this woman on stage. What made this more even more powerful was that Alexis Wolfe, the CEO of Endometriosis Australia was there to share in the support and build on the importance of raising awareness and speaking about Endometriosis. The keynote speaker was Mandi Gunsberger, the

founder and CEO of Babyology from 2007-2017, the number one media company for Australian parents. Mandi started the business in her living room and spent ten years building and running the digital media publishing company. The story of how her blog grew to a business and household name was remarkable. Some of the key messages we heard from Mandi were around how nothing happens overnight and need for businesses to continually pivot. Another interesting point the Credit Managers in the room could relate to, was the importance of cash-flow and Mandi’s story about those difficulties were a valuable insight for our members. Mandi was so open and honest in sharing the mistakes and lessons she learnt that the audience could understand how hard she worked. It was also nice to hear about how she rewarded the family after selling the business with 15 months in Tuscany! We had just enough time to question Mandi on her experience before moving onto what seemed like a never-ending series of raffles. Thanks so much to our generous sponsors and audience for their raffle donations! Michelle Cann from NCI, along with our NSW Council President Theresa Brown had a lot of fun handing out all the prizes. After the event many moved onto the nearby bars to socialise with colleagues and friends amongst the AICM. It was the perfect start to the weekend.

NSW 2022 Economic Breakfast 16 March This year’s Economic Breakfast was held at the Rydges Hotel in the CBD. Fortunately, there was good coffee and breakfast (especially for the avocado fans) to

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Natalie Trajcevski, Melissa Girarantano, Tracy Usher (all CCSG) and Nidhi Lamba (Downer).

DIVISION REPORT

New South Wales

Michael Murray (Electrolux) with Ivelina Paneva (AON).

Fiona Reynolds of our event sponsor Turks welcomes attendees to the Economic Breakfast.

A proud Tony Pilimon (Rexel) receives his newly minted CCE from NSW Division CCE Chair Grant Morris.

Libby Simpson (New Balance) with Beth Gray (BG Collections).

wake-up the drowsy eyes and get attention focussed on our speaker, Mark Thirlwell, Chief Economist at the Australian Institute of Company Directors. It was a popular event and was particularly well attended by CCEs who were offered complimentary attendance as recognition of their importance to our Institute. Mark’s presentation was informative and interesting. The content included valuable insights on emerging trends. If there is one message that resonated a lot, it was how the market has continually been

Daniel Turk (Turks) with Barbara Cestaro, Geraldine Case (both AON) and Michael O’Donnell (Panasonic).

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New South Wales

surprised by the scale of actions by the Reserve Bank over the past 2 years. COVID has reminded us that a key competence businesses need is to be adaptable. Following the economic presentation our MC David Hunt introduced several members to receive membership tenure awards so there were smiles all round. Thank you to Fiona Reynolds representing our sponsor Turks for putting on such an informative event.

Members in spotlight

30 year membership certificate recipients: Andrew Le Marchant (AICM), John Field (Reqorq Consulting), Peter Morgan (NSW Director) and Bruce Bills (Metcash).

Julia Fawcett MICM CCE NOUMI Good people bring out the good in other people. Julia is one such person. A long-time AICM member and CCE, one of her daughters is now CEO of Endometriosis Australia. Many of us met her daughter Alexis at the WINC event which raised much needed funds for endometriosis education programs, and Julia Fawcett MICM CCE research. Julia explained to me how Alexis wanted to give back. Her upbringing and nurturing mother clearly had a part in making her the woman she is today.

Julia is another credit manager who ‘fell’ into the role. Initially working in banks where she chased overdue loans and built a knowledge of the lending industry, the early 1990s recession saw her contract expire. A friend offered the chance to do cheques for a little while and that turned into 11 years at Active Hire, now Alcott Hire. By the end of that Julia was a Credit Manager. Julia has worked in several different businesses over the years, but Credit has been the mainstay. Her loyalty to her latest employer is strong. We joked about how she ‘tidied up’ the shelves at Woolies when she saw her businesses products out of place. She tells me one of the best things she did was joining the AICM. The conferences were great, the ability to build up knowledge first-hand was there and the networking has proven itself invaluable. She also sat the exams and became a CCE.

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Christopher Wheatley, Julia Fawcett (Noumi), John Field (Reworq), Ian Smallman (Clarian Consulting), Fabian Sommariva (Allegis Group) and David Jovanov (ARMA).

DIVISION REPORT

New South Wales

Optus team having a great time – Melissa Khalil, Rebecca Mouawad, Monica Cortez, Theresa Brown (NSW Division President) and Alex Simmons.

Joseph Safi (ARMA), Ledia Hanna, Natalie Ledlin and Holly Jackson (all Ledlin Lawyers).

Hayley Hitch, Anica Cunanan, Bonnie McMahon, Andrew Hack and Jodie Rodrigues (all Matthews Follbigg Lawyers).

John Melluish (PCI Partners) and Amara Gardener (The Entourage).

When she isn’t fixing something in Accounts Receivable or Accounts Payable Julia is working on herself. Whether it is the daily gym routine, a swim, run or fixing the backyard in the latest reno she never sits still. She says embrace what you do. “Just be true”.

One of his most rewarding engagements was in 2015 when Stewart sold fashion label SES Fashions when it went into administration. They managed to hold the business together which saved the jobs of most staff and led to positive outcomes for creditors that would otherwise not have been possible. However, his eyes light up when we get to talk about the smaller mum-dad businesses. When they walk in the doors, they have no idea of what will happen. If they can work together make a plan that will save something, whether it be the business, its assets or just the family home, watching the weight lifted off their shoulders is priceless. As a husband and a father, he can relate. Stewart has a big heart. He and his family regularly travel to Vanuatu with cash and equipment for underprivileged children who live there. He loves surfing

Stewart Free MICM Jirsch Sutherland I had the pleasure of chatting to Stewart Free who is a Partner at the Insolvency Firm Jirsch Sutherland based at their Newcastle office. Stewart is a returning AICM member after initially joining in the late 1990’s. He explained how his Insolvency career started after a few years working as a tax accountant. Like most in this field he didn’t plan for it, he fell into it and hasn’t looked back.

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New South Wales

– Gary Poslinsky MICM

was serious and had a good case. This is $2M creditors would not have otherwise seen. Don’t be frightened to not only encourage but also support a Liquidator in pursuit of insolvent trading claims. My one caveat is to be careful not to put information into the hands of the Liquidator which might support a preference claim against you. – Anonymous CCE

The Australian Institute of Credit Management welcomes our Partners for 2022 National Partners Trusted Insights. Responsible Decisions.

NSW Council

Social Networking Event, 24 March The 2022 Archie Brothers social night was another fun event. It was time to let the hair loose and play arcade games, try run down your colleagues in dodgem cars and shoot one another in laser tag. It’s great to see ARMA and Creditorwatch sponsoring this event again. Thanks!

NSW Council Membership – positions available Would you like to join the NSW Council? This is an opportunity to give back to the Credit community whilst creating lasting networks and friendships. If you are interested email our president Theresa at theresa.brown@optus.com.au.

Divisional Partners

CREDIT MANAGEMENT SOFTWARE

Official Division Supporting Sponsors

What really gets my goat? I often hear Credit Managers speaking-up at creditors meetings saying things like “sue the directors, they traded whilst insolvent” and that’s the last I hear. I rarely see any activity from Credit Managers or support of the Liquidator in taking this information and any potential action falls flat through lack of information or funding. Well let me share with you a recent success. I cannot name the company or the Liquidator as a confidentiality agreement has been signed with the Directors however this month an insolvent trading claim has been settled with two directors agreeing to pay $2M. Very little money has been spent in pursuing this through the courts, but strong enough action by the Liquidator for the Directors to know the Liquidator

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over there and heard about schools in need, so they took some supplies to donate. His late father encouraged him to make a difference and keep doing it. ‘Operation Do Something’, as the Frees call it, has raised more than $150,000 and donated more than 300 surfboards to the locals in addition, he has had the pleasure of hosting kids to Australia on lifechanging surf trips. He tells me about a great misconception from our society is to look at the smiling kids and assume they don’t know what opportunities they are missing. This is simply not the case…. they know exactly what they are missing out on and that is why “Operation Do Something” exists, to assist in closing that gap. Stewart is a personable and smart man. His message to others in the credit industry is to operate from a position of empathy, not sympathy. This important distinction will prevent you from making bad decisions.

DIVISION REPORT

New members The Institute welcomes the following credit professionals who were recently admitted to membership between January and March 2022. New South Wales

Queensland

Asha Amatya

Americold Logistics

Ryan Archer

Shell Energy Australia

Jeffrey Brown

Matthews Folbigg Lawyers

Bree Bate

Rodgers Reidy (QLD) Pty Ltd

Anica Cunanan

Matthews Folbigg Lawyers

Michelle Bidesi

Stoddarts Group Pty Ltd

Jacqueline Dickson

Commercial Credit Services

Mark Bolam

Summit Assessors Pty Ltd

Tyler Drayton

Credit Collection Services Group Pty Ltd

Julie Brewood

Kemps Petersons Receivables Pty Limited

Aaron Edmonds

Collection House

Joanna Bridgford

Reward Hospitality

Patricia Francis

Apprenticeship Careers Australia

Gabrielle Burke

Ergon Energy Retail

Stewart Free

Jirsch Sutherland

Jhett Comadira-Smith

Rodgers Reidy (QLD) Pty Ltd

Matthew Gannaway

EC Credit Control (Aust) Pty Ltd

Josephine Decuyper

Cor Cordis

Amara Gardener

The Entourage

Leisa Fisher

QRIDA

Malcolm Gay

EC Credit Control (Aust) Pty Ltd

John Flemming

Euler Hermes Australia Pty Ltd

Jasmine Gee

CCSG

Jo Garcia

Grant Thornton Australia Limited

Joe Glanznig

Euler Hermes Australia Pty Ltd

Lorna Hodgkin

Business Australia

Devyn Grantham

Finstro

Sandi Labinas

Business Australia

Hayley Hitch

Matthews Folbigg Lawyers

Holly Lawler

Ashdown Ingram

Trish Kastanias

Gadens

Emma Luck

BGW Group

Brenda Lester

Commercial Credit Services Pty Ltd

Geraldine Mariano

Cleanaway Waste Management Limited

James Macdonald

Gadens

Anna McConchie

Reward Hospitality

David MacNeil

Goodman Fielder

John McEniery

Sasha Legal

Satish Manandhar

Benedict Pty Ltd

Nicole Munro

BGW Group

Chelsea Maxted

Credit Collection Services Group Pty Ltd

Chris Norman

Reward Hospitality

Bonnie McMahon

Matthews Folbigg Lawyers

Mark O’Driscoll

Reward Hospitality

Stephen Mullette

Matthews Folbigg Lawyers

Amanda Pfeffer

BGW Group

Paul Murray

Finstro

Gabby Pike

Heritage Bank

Richard Nugent

illion Australia

Brooke Pullen

BGW Group

Belinda Panebianco

SDG Pty Ltd

Jemma Scarpellino

Milton Graham

Jodie Rodrigues

Matthews Folbigg Lawyers

Melissa Smith

Finance One Pty Ltd

Athena Rojo

Jaybro Group Pty Ltd

Connie Tam

Vincents

Sailesh Sanghvi

Plutus Investments

Paul Taylor

Wyndham Destinations

Gwyneth Santos-Pham

Eagers Automotive

Kathy Thomson

BGW Group Pty Ltd

Charlotte Stagg

Coates

Tracey Turton

BGW Group

Kylie Summerfield

Business Australia (Apprenticeship

Catrina Wainwright

Recruitment Solutions Group Australia

Careers Australia)

Roger Warren

Reward Hospitality

Bert Thoonen

Aristocrat Technologies Australia P/L

Andrew Veilo

Sanofi Aventis Australia

Michelle Vierboom

Recruitment Solutions Group Australia

Jenny Wang

Metcash Trading Limited

Kathryn Watt

Australian Business Chamber

82 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

South Australia Parmeet Bindra

Oracle Insolvency Services

Nicolas Boyd

New South Wales Business Chamber

Joshua Farrow

Oracle Insolvency Services

Vicki Jenkin

Recruitment Solutions Group

Thoshan Karannagoda

Oracle Insolvency Services

Chloe Monteleone

Mercantile CPA

Neil Tunstall

Thane Commercial

New members

Nicola-Anne Betts

Tasmanian Collection Services

Thiwanka Perera

Rewards Hospitality

John Styles

Tasmanian Collection Service

Kate Taylor

Reward Hospitality

Victoria Jasmina Andonovski

Tyremax Pty Ltd

Maria Angelodemou

Independent Hardware Group

Dean Armstrong

illion

Patrick Blume

Covaler

Damian Chester

illion

Anka Chirica

GWA Group Ltd

Hugh Chu

The Adecco Group

David Johnson

TaleFin Pty Ltd

Stavros Kolokithas

BlueScope Steel Limited

Alistair Lepp

Powershop Australia Pty Ltd

Silvia Li

Calendar Cheese Company Pty Ltd

Georgette Little

Credit Collections Services Group Pty Ltd

Chang Liu

The Adecco Group

Riya Michael

TaleFin

Terrence Nyadongo

TaleFin

Sonny Phanvongsa

Angle Finance

Soni Ravi

Bluescope Steel

Kevin Said

TierONE Capital

Jacqueline Sauzier

Metcash Pty Ltd

Sally Singh

Independent Hardware Group

Tom Trainor

Kemps Petersons Legal Pty Ltd

Jason Valdez

illion

Tiffany Van Heythuysen

Stramit Building Products

Anson Vuong

Acceleon Pty Ltd

Western Australia Agus Halim

Capricorn Society Limited

Steph Ryan

Capricorn Society Limited

AICM Membership 2022/23 Early Membership Renewals Renewals will start in early May 2022 as we’ve just transitioned to a new website. It is now easier than ever to renew! You will receive an email from our member engagement team with a direct link to your renewal form. Be sure to visit the member portal to access exclusive member benefits and resources such as webinars, magazines, articles and more. Additional features will be released in the coming weeks. If it’s your first time logging in to the new website, you will need to reset your password.

Do you manage a team of credit professionals? AICM offer a group membership for organisations to enrol multiple employees as members of AICM at a discounted rate. For more details or to upgrade to a group membership, please contact us via email on aicm@aicm.com.au

Overseas Victoria Dockerty

Findex NZ Ltd

Simon Montgomerie

EC Credit Control (Aust) Pty Ltd

Jayde Rabbaney

illion

To find out more about AICM Membership go to www.aicm.com.au

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 83

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Tasmania

AICM Marketplace

Directory of services

For information, options and pricing please contact Claire Kasses on +61 2 9174 5727 or E: claire@aicm.com.au COLLECTIONS AICM Divisional Partner

COLLECTION SYSTEMS

INFORMATION

AICM Divisional Partner

CREDIT MANAGEMENT SOFTWARE

AMPAC Debt Recovery Level 5, 35 Clarence Street Sydney NSW 2000 Tel: 1300 426 722 Email: info@4ampac.com.au Web: www.4ampac.com.au Trust AMPAC, we guarantee to give you the right advice…… AMPAC provides a complete range of debt recovery and receivables management services to big business, government and thousands of SME’s nationally, so next time you are deciding how to deal with that difficult customer, pick up the phone and call us. We are ready to help you too.

AICM Divisional Partner

Accessii Group

OnGuard Tel: 1800 123 613 Web: www.onguard.com OnGuard’s Credit management solution will help you hit your collection targets – each and every month. By working smarter and providing better visibility, OnGuard will help you reduce your DSOs. Why not give your staff a friendly solution that will make their life so much easier. Contact us to show you how OnGuard has made life a whole lot easier for our customers.

CONSULTANCY

PO Box 1551, Kenmore, QLD 4069 Tel: 1300 831 331 Email: team@accessii.com.au Web: www.accessii.com.au Accessii provides information and technology to businesses that extend credit terms to customers. Our platforms enable users to: l digitally receive and approve applications l assess capacity of customers to pay – multi-bureau decisioning l monitor ongoing creditworthiness l process and manage PPSR We offer end to end credit management in one place.

AICM National Partner

AICM Divisional Partner

CMA Collect Tel: 07 3108 2840 Email: wbj@cmacollect.com Web: www.cmacollect.com Collections: l Online commission free Mercantile demands l Easy online referral option l Full integrated l Access to QCAT claims up to $25,000.00 (Fully funded T&C’s apply) Credit Documents: l Digital Credit Application via the CMA webpage l Approval confirmation and DocSign authorisation l Personal deed of guarantee from l Data stored in the CMA webpage in a historical format

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.

Credit Solutions

CreditorWatch

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

GPO Box 276 Sydney NSW 2001 Tel: 1300 501 312 Web: www.creditorwatch.com.au

Credit Solutions, a division of the Credit Clear Group. A debt collection partner you can trust. Working with some of the country’s leading providers of information management and data intelligence solutions. Since 1965 Credit Solutions has set the benchmark for providing quality collection and recovery services to South Australian businesses and government.

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.

DISTRIBUTION & PRINTING

AICM National Partner

AICM Divisional Partner

Lane Communications

Equifax

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.

84 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

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 MARKETPLACE

AICM Marketplace Directory of services

For information, options and pricing please contact Claire Kasses on +61 2 9174 5727 or E: claire@aicm.com.au INFORMATION

LEGAL

INSOLVENCY

AICM Divisional Partner

AICM National Partner

Trusted Insights. Responsible Decisions.

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

Insolvency Intelligence for Credit Managers 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.

AICM Divisional Partner

TaleFin Tel: 1300 284 193 Email: info@talefin.com Web: www.talefin.com www.linkedin.com/company/talefin TaleFin is Australia’s fully comprehensive credit reporting agency. We can help you to identify the reasons to say ‘yes’ to your customers, increasing your conversion rate, while helping you to reduce your arrears rate. TaleFin – Fit for the 21st century, we’re the home of fair credit reporting.

INSOLVENCY AICM Divisional Partner

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 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.

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

AICM Marketplace 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.

Vincents 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.

AICM MARKETPLACE

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

Claire Kasses

Direct: +61 2 9174 5727 Email: claire@aicm.com.au Tel: 1300 560 996

April 2022 • CREDIT MANAGEMENT IN AUSTRALIA 85

AICM Marketplace

Directory of services

For information, options and pricing please contact Claire Kasses on +61 2 9174 5727 or E: claire@aicm.com.au LEGAL AICM Divisional Partner

AICM National Partner

Results Legal

Turks

Level 4, 183 North Quay Brisbane QLD 4000 Tel: 1300 757 534 Web: www.resultslegal.com.au

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

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.

THE NEW HOME OF CREDIT MANAGEMENT

TRADE CREDIT INSURANCE

LEGAL

National Credit Insurance Brokers

Turks 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.

We are delighted to launch our new and improved website that will provide members with a range of new self-service features that make it easier to access member benefits. The new format has been developed with the member experience front of mind and will be further developed in the coming weeks, including obtaining member feedback.

86 CREDIT MANAGEMENT IN AUSTRALIA • April 2022

National Supporting Sponsor

Tel: 1800 882 820 (freecall) Email: info@nci.com.au Web: www.nci.com.au National Credit Insurance Brokers (NCI) has established itself as the premier trade credit insurance broker in Australia, New Zealand, Singapore and Malaysia. Trade credit insurance is a highly specialised area of insurance and with its 35 years of experience, NCI has developed an unmatched depth of expertise in arranging the right protection at the best price for your particular trading needs.

Features include: z Smooth individual and group event registration process z Easy to navigate menu structures z A new member portal Over the coming weeks we will be releasing additional features. Members will need to reset their password when signing in for the first time.

AICM MARKETPLACE

The Publication for Credit and Financial Professionals

IN AUSTRALIA

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

Credit Management in Australia - April 2022

Articles inside

Financial hardship information included in credit reporting from July 2022

Common mistakes in PPSR registrations

Smart practices to help you optimise your credit control and strengthen cash flow

How do you know if you’re using quality data?

Data – it’s the new gold

PPSR practicalities

Inflation – the dark and stormy cloud