Volume 31, No 1 February 2024
The Publication for Credit and Financial Professionals
IN AUSTRALIA
ATO resumes tough tactics on debt collection:
WHAT YOU NEED TO KNOW ALSO IN THIS EDITION: l Director Penalty Notices: What do they mean for trade creditors? l PPSR Housekeeping – A 12-step checklist for reviewing and updating your registrations l Economic outlook: Lessons from 2023 and what to expect in 2024?
Our 2024 supporters National partners
Divisional partners
CREDIT MANAGEMENT SOFTWARE
Divisional supporting sponsors
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CREDIT MANAGEMENT IN AUSTRALIA | February 2024
Contents Volume 31, Number 1 – February 2024
Message from the President
6
Pathways How to trade with trusts masterclass Recent graduates Training calendar
8 9 9
10 Michael Buscema
Debt Recovery It’s back to business-as-usual: The ATO returns to its strong stance on debt recovery action
14 Kim Radok MICM CCE
10
Michael Buscema
Credit Management 7 enduring lessons for credit managers when creating, rebuilding and operating a successful credit department
14
20 Simon Beck
Kim Radok MICM CCE
24 Adrian Floate MICM
Customer Service & Technology How to reduce DSO and build a healthy balance sheet 20 Simon Beck
How the right payment solution can drive growth and transform your supply chain
24
Adrian Floate MICM
The ‘new’ you: Becoming a credit superhero
28
28 Kirk Cheesman MICM
32 Monika Lacey MICM
Kirk Cheesman MICM
Economic Outlook Update from across the ditch: Arrears still pose a key threat to Kiwi households in 2024
32
Monika Lacey MICM
Looking back on 2023 what should we expect in 2024? Louis Tsang MICM
38
38 Louis Tsang MICM
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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ISSN 2207-6549
DIRECTORS
Contents
Julie McNamara MICM CCE – Australian President Lou Caldararo LICM CCE – Victoria/Tasmania & Australian VP Troy Mulder FICM CCE – Western Australia/Northern Territory Rob Jackson MICM CCE – South Australia Theresa Brown MICM CCE – New South Wales Steven Staatz MICM CCE – Queensland
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CHIEF EXECUTIVE OFFICER Nick Pilavidis FICM CCE Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065 PO Box 64, St Leonards NSW 1590 Tel: (02) 8317 5085, Fax: (02) 9906 5686 Email: nick@aicm.com.au PUBLISHER Nick Pilavidis FICM CCE | Email: nick@aicm.com.au
46
Brendan Sherry
Malcolm Poslinsky MICM CCE
50 Allan Kawalsky MICM
Risk Management What’s an ideal credit risk management process?
42
Brendan Sherry
CONTRIBUTING EDITORS NSW – Gary Poslinsky MICM Qld – Emma Purcival MICM CCE SA – Clare Venema MICM CCE WA/NT – Jeremy Coote MICM CCE Vic/Tas – Alex Hawtin 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, 2024.
PPSR PPSR Housekeeping – A 12-step checklist for reviewing and updating your registrations Malcolm Poslinsky MICM CCE
Legal Director Penalty Notices: What do they mean for trade creditors
50
Allan Kawalsky MICM RITF
Member Anniversaries
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
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
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For ADVERTISING OPPORTUNITIES in
JOIN US ON LINKEDIN Click Here
4
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CONTACT: Claire Kasses, General Manager Ph: 1300 560 996 E: claire@aicm.com.au
Contents
Volume 31, Number 1 – February 2024
56
64
Qld: Winning Team: Jordan McNee MICM CCE, Lachlan
McKinnon MICM and Ashley Leslie MICM, Stacey Woodward MICM CCE and George Wolf MICM.
67
SA: Credit Nexus Panellists: Clare Venema MICM CCE,
Janice Riley MICM, Scott McGrice MICM and Simon Lane.
70
WA/NT: Cameron Miller MICM, Jeremy Coote MICM CCE, Cheri Bowater MICM CCE, Troy Mulder FICM CCE and Rowan McClarty FICM CCE.
Vic/Tas: Thilanga Pitigala MICM, Robyn Erskine MICM CCE, Ivan Lim and Melissa Mann MICM.
Division Reports Queensland
56
South Australia
64
Western Australia/Northern Territory
67
Victoria/Tasmania
70
New South Wales
74
New members
82
Marketplace
84
74 NSW: Andrew Tanna MICM, Christopher Hadley MICM, Andrew Spring MICM CCE and Aaron Smith.
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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aicm
from the president
Julie McNamara MICM CCE National President
W
elcome to the February 2024 edition of the AICM’s Credit Management Magazine and Happy New Year, I am very excited about the year ahead as the AICM evolves to meet and support our members’ needs for a great year ahead. A huge welcome and thank you to our national sponsors Equifax, Turks, illion and CreditorWatch for their ongoing support and to our divisional partners and sponsors. I look forward to working with you all throughout 2024. It seems like such a long time since we enjoyed the amazing National Conference in Adelaide last October and we are already in the swing of organising our conference for this year. It should be an amazing event and venue at Pullman Melbourne on the Park, can’t wait to see the early bird registrations open again for the 16th – 18th October! Our most exciting events to look forward to begin the year with; WINC 2023 was a huge success as we supported international Women’s Day with the theme: “A Catalyst for Change” which saw our states raise a record $20,000 for our chosen charity, “WRC, Women’s Resilience Centre” together with record numbers for both our luncheons and our WINC webinar series. This year, together with our committee we have chosen Empowering Women through Education as our theme which will tie in once again with 6
The UN International Women’s Day theme: “Count her in, accelerating gender equality – through economic empowerment”. It is a great transition from the 2023 theme. z Education comes in many ways and economic empowerment comes from education. z This theme can be quite broad, and we will be able to choose a variety of relevant topics and speakers for the year which will add value for our members and their networks. z In this endlessly surprising world, it is still so relevant that we continue to recognise and support women experiencing domestic violence and financial abuse/coercive control which remains of critical importance and aligns with the 2023 charity partner. z We also hope to be able to touch on superannuation equality as we plan our calendar for our WINC events, far too often women are not planning or able to ensure they are in good stead for their retirement. z Our AICM committee is strongly in favour of AICM Education Foundation playing the role in the WINC series as it supports women in credit with their education and career progression. Risk & Economic Seminars For six consecutive years, our annual Risk seminar series has brought together highly experienced credit, insolvency, and legal professionals to navigate and respond to unfolding risk.
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
from the president
aicm
“In 2024, we’re ambitiously planning for a grander and more impactful Risk Seminar, aiming to exceed the benefits of our previous events by merging the Economic Update and Risk Seminar into a singular, more comprehensive event...”
In 2024, we’re ambitiously planning for a grander and more impactful Risk Seminar, aiming to exceed the benefits of our previous events by merging the Economic Update and Risk Seminar into a singular, more comprehensive event – the Risk and Economic Seminar. Registrations for all events are now open: 2024 Risk and Economic Seminars (aicm.com.au) How exciting to be involved with our first ever “Virtual Credit Week” From 8-12 April 2024, you can learn from the experts, sharpen your skills, and connect with your peers in the credit industry. We have selected 5 themes across the 5 days: z People and processes z Managing the risk z Powering performance with data and technology z Best practice in focus z Credit profession in focus There will be three punchy seminars each day featuring fantastic credit professionals sharing their knowledge and insights, followed by interactive discussions to dive deeper into issues relevant to you and answer your questions. Each session will be 30 minutes long with recordings available for your convenience on our virtual platform allowing you to access the content from anywhere, at any time. What an amazing opportunity to enhance our knowledge and skills, registrations will open soon. Finally, I do hope everyone is starting
to plan and look for opportunities to nominate a team member or themselves for one of our distinguished awards in 2024, we are looking forward to recognising and celebrating the talent of our members. Applications for the YCP and CP State awards will open on Monday 15 April 2024. Once again, I would like to thank our sponsors CreditorWatch and ARMA Group for their support of the YCP Award together with illion for the CP Award. Applications for the Credit Team of the Year will open in May 2024. Thank you to Equifax for supporting this award. In finishing, as always, thank you to all our members, volunteers and subcommittees who give their time to help build an AICM we are all proud of and to enable us to support each other and provide the services and events to our members. If you feel you have the experience and passion to enable you to help in any way and you feel you could support your council or board, I encourage you all to do so. It is the most rewarding and satisfying experience knowing you can make a difference. We are currently looking to grow in most areas, particularly South Australia and Western Australia, so please reach out, we’d love to chat and answer any questions you may have! All the best to you all for a great 2024!
Julie McNamara MICM CCE National President February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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aicm
pathways
Start your year off on the right foot! Embarking on a career in credit can be both thrilling and challenging, But are you ready for your 2024 credit journey? We want to help you get a head-start on your professional development with our extensive range of credit training
Study styles Our courses are available via a range of flexible learning pathways that will provide you with valuable knowledge and skills no matter at what stage you are with your career.
Distance education Allows learners to advance through the courses at your own pace, distance education provides you with a range of benefits. Consider these advantages as you decide whether to enrol in distance learning courses with the AICM: z Flexibility Many highly motivated and self-disciplined learners prefer distance education programmes. They are well-organised and maintain their performance in the virtual setting. It affords you the flexibility of learning from any place at any time.
Trainer led training Trainer led training is particularly beneficial when the material is new or complex. Having a trainer on-hand to answer questions and demonstrate concepts can greatly enhance the learning experience. Trainer led training allows you to instruct a larger group at once. This means that you can use a variety of techniques such as role-playing, and exercises to enhance the learning experience. Teams may also learn better with instructor-led training, because they can share ideas, work in groups, and debate with their peers. It’s also useful for bonding, team building, and team problem solving. All of this means that instructor-led training can have greater long-term benefits than one-on-one or online training.
Once you develop a passion for learning, you will never stop growing! AICM offers training courses which change according to the needs of the credit industry and with its high level of flexibility enables it to provide practical programs that will provide you
z Adaptability Learners will get the chance to learn the course in any way. 8
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
with valuable knowledge and skills no matter at what stage you are with your career, so get started in 2024.
pathways
aicm
January 2024 Graduates AICM would like to congratulate its recent graduates:
FNS40122 – Certificate IV in Credit Management Fui Lo
VIC
Bowen and Pomeroy PTY LTD
Linzi Sorrell
WA
Mediterranean Shipping Company
Nivani Sandanam
QLD
University of Queensland
FNS51522 – Diploma of Credit Management Roza Muradyan
Western Australia
Medtronic
Training calendar Topic
Type
Dates
Collect with confidence
Toolbox
7 March
Apply risk management strategies to own work
Core unit - Cert IV
12 March
Understanding credit risk
Toolbox
15 March
Certified credit executive (CCE) assessment
CCE
15 -18 March
Legal compliance
Elective: Cert III, Core unit Cert IV & Diploma
19 + 20 March
Understanding financial hardship
Workshop
21 March
AICM credit week
Webinars, toolboxes, classrooms, discussion groups and more
8 - 12 April
Identify and manage credit risk
Elective unit - Diploma
17 April
Establish and manage outsourced services
Elective unit - Diploma
19 April
Evaluate debt collection action and develop recommendations
Elective unit - Cert III
23 April
Utilise the legal process to recover outstanding debts
Elective unit - Cert IV
24 April
Manage People performance
Elective unit - Diploma
7 + 8 May
Fundamentals of credit
Toolbox
9 May
Understanding financial hardship
Workshop
10 May
Assess Credit Applications
Core unit - Cert IV
14 + 15 May
Collect with confidence
Toolbox
16 May
Understanding personal bankruptcy
Workshop
17 May
Manage organisational customer service
Elective unit - Diploma
21 + 22 May
MARCH 2024
APRIL 2024
MAY 2024
Mental health - first aid
22 + 23 May
Understanding credit risk
Toolbox
23 May
Understanding Corporate Insolvency
Workshop
24 May
Emerging Leader Development Program
1, 15 & 29 May February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
9
Debt Recovery
It’s back to business-as-usual: The ATO returns to its strong stance on debt recovery action By Michael Buscema*
Reset This year the ATO has returned to business-as-usual when collecting overdue debts, and many taxpayers are already feeling the impact. No doubt you will have seen more activity over the last 12 months, with an increase in firmer actions, and a willingness to escalate to legal actions, especially for those with large debts who are choosing not to engage. The ATO is resetting the expectations of taxpayers with overdue debts who either pay late, do not pay, or do not proactively engage with them. Practically speaking, this means the ATO will be acting earlier than it has been and will continue to use a
Michael Buscema 10
number of strategies to pursue outstanding debts with focus on the following key areas: z Unpaid super guarantee charge: Super belongs to employees. It’s for their future retirement. It’s not designed to be a cashflow buffer. z Debt arising from ATO audit adjustments: While most unpaid debt is self-assessed, the ATO deliver its audit programs for a reason, and it’s important they enforce payment as an outcome of the audit – it’s not just about raising revenue. z Refund fraud: Unsurprisingly, the ATO views fraud very seriously and taxpayers who engage
“The ATO is resetting the expectations of taxpayers with overdue debts who either pay late, do not pay, or do not proactively engage with them.”
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
in refund fraud can expect serious consequences. This is nothing more than blatant theft against the community. z Aged, high-value debts: For these taxpayers, concessions are no longer available, and their debts will progress to firmer actions. Taxpayers unable to get back on track and demonstrating signs of insolvency can expect legal recovery actions. z Employers with new self-assessed debts: The time is now to maintain positive payment behaviours. That’s why for businesses with new self-assessed debts, the ATO will take swift action and uphold the consequences and impacts of delaying payment.
“We’re committed to supporting clients who genuinely need it and will work with clients to understand their situation and provide tailored help and assistance...” Approach to debt The ATO’s debt management strategy sits under the following categories: z Prevention: Underpinning the ATO’s debt management strategy is a focus on prevention. Preventing debt is the best way for businesses to stay on track, and the ATO has seen that leaving debts unchecked and unmanaged for prolonged periods of time rarely improves future viability of a business. The ATO seeks
to empower taxpayers with the information and resources they need to meet their obligations promptly. This is achieved through several proactive measures which include SMS reminders and online services. z Help and assist: We’re committed to supporting clients who genuinely need it and will work with clients to understand their situation and provide tailored help and assistance specific to their
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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Debt Recovery
circumstances. Clients who make a choice to engage with us early, will be best placed to discuss options that are available. z Firmer action: The ATO has resumed firmer actions that will continue to become increasingly visible within the community. For the small percentage of taxpayers who do not engage, the ATO employs a set of firmer actions designed to address escalating tax debt situations. These actions can include garnishee notices, director penalty notices and disclosure of business tax debts to credit reporting bureaus. z Legal action: The ATO does not make the decision to commence legal actions lightly, and this is only after clients have been afforded ample opportunity to re-engage and address their debts.
Firmer action outcomes z Director Penalty Notices: In the 2022-2023 financial year over 23,000 DPNs were issued in respect of over 17,000 company liabilities for a total debt value of almost $2.9 billion. $858.4 million of this has since been collected. The ATO are actively reminding directors of their obligations and since March 2023 have issued over 100,000 awareness letters advising directors of its intention to take steps to recover the debt from them personally. z Disclosure of business tax debt: Businesses will receive 12
“The ATO expects taxpayers to pay in full and on time. Taxpayers have a responsibility to manage their cash flow to ensure they meet all their tax debts when those debts fall due for payment.” a formal Notice of Intent to Disclose when they meet the criteria for disclosure, advising that they have 28 days to take the necessary action. Since August 2021, we have issued over 50,000 intent to disclose notices and over 20,000 entities have subsequently had their tax debts disclosed to credit reporting bureaus.
Payment plans The ATO expects taxpayers to pay in full and on time. Taxpayers have a responsibility to manage their cash flow to ensure they meet all their tax debts when those debts fall due for payment. Taxpayers experiencing financial difficulties may be eligible to set up a payment plan and may be able to set up their own payment plan using ATO online services or self-help phone service. Payment plans require an up-front payment and should be completed within the shortest possible timeframe to minimise GIC which will continue to accrue. Before setting up a payment plan taxpayers need to consider their capacity to pay and business viability and will need to ensure all future payments and lodgments can be made on time.
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
Taxpayers should not rely on remissions and the ATO will only consider them in very limited circumstances. Taxpayers who make a choice to contact the ATO early will be best placed to discuss options that are available – and early means before missing the due date.
Support in difficult times The ATO is focused on helping taxpayers to get it right and providing tailored support to those who genuinely need it. It knows most businesses do the right thing or want to do the right thing, but sometimes require assistance when circumstances arise outside of their control. The ATO encourages these taxpayers to proactively engage so they can discuss their situation and what support may be needed, including deferrals, payment plans and remission of penalties and interest. In certain circumstances, individuals can also seek release from some or all tax debt on the grounds of serious financial hardship. *Michael Buscema Assistant Commissioner, Lodge and Pay, Integrity Australian Taxation Office E: LodgeandPayIntermediaryProgram@ ato.gov.au
Esker ANZ unveils the winners of the Esker Impact Awards 2023 Every year, the Esker Impact Awards honour exceptional customers for their exemplary utilisation of Esker Source-to-Pay and Order-to-Cash solutions. The winners in the Order-to-Cash award categories of Best Results, Biggest Champion, and Advocate of the Year showcased exceptional achievements by effectively automating and optimising diverse Accounts Receivables processes, leading to substantial impacts on their respective businesses. Here are the winners in the Order-to-Cash category:
Best Results “The automated reporting function within the Esker solution has decreased the amount of time spent manually chasing our debt. Freo Group has achieved significant reduction of 20% in our DSO over the last 12 months and being able to forecast incoming payments has assisted the business to satisfy KPI requirements that come with our supplier contracts. We’ve also seen significant improvement in productivity.”
Biggest Champion – Accounts Receivable
Advocate of the Year “A remittance that would take 3 to 4 hours to clear due to complexity now takes 15 minutes or less, thanks to Esker. Esker has not only revitalised AR and gave us time back to operate in a forward-looking manner rather than chasing our tails but has also enabled us to provide better customer service to thousands of our wholesale customers.” Noel David True Alliance
Biggest Champion – Order Management
“The Esker solutions have made a significant improvement to our daily tasks. Payments are allocated much quicker and easier now with a few clicks. The dashboards within Cash application and Collections Management are easy to use and follow.”
“The robustness of the Esker solution, its integration with our SAP system, and the intuitive interface for all levels of user ability has made Esker a delightfully easy application to champion within NCI. Esker has reduced manual data entry and has greatly minimised the risk of input errors.”
Rosetta Rocca True Alliance
Daniel Kennedy NCI Packaging
www.esker.com.au • info@esker.com.au • +61 2 8596 5100 • linkedin.com/company/esker-anz
Credit Management
7
enduring lessons for credit managers
when creating, rebuilding and operating a successful credit department
By Kim Radok MICM CCE*
Introduction This article is based on the “Seven enduring lessons from the Fast 100” by James Thomson in the AFR’s Special Report dated 29th of November 2023. Reference: https://www. afr.com/work-and-careers/ management/seven-enduringlessons-from-the-fast-10020231113-p5ejpn After reading this article, I wondered whether these principles would also apply to credit managers. The following is my attempt to put forward the same principles and information for your consideration. After all, managing a successful credit department, or understanding the principles of credit management, is one of the
Kim Radok MICM CCE 14
core functions for any business, irrespective of its size. In addition, no manager, whatever their role within the business, can continue to keep their head in the sand and rely only on their own profession for knowledge, inspiration, and up-to-date business ideas. The fact is that all professions are finding that great business ideas can come from anywhere within a business or profession, irrespective of whether that be from sales, marketing, credit, administration, the warehouse/ distribution area, fraud, debt collection, or entrepreneurship. The business world is far more complex today than it ever was, and 2024 looks like it will be a world of turmoil,
“... managing a successful credit department, or understanding the principles of credit management, is one of the core functions for any business, irrespective of its size.”
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
“The fact is that all professions are finding that great business ideas can come from anywhere within a business or profession, irrespective of whether that be from sales, marketing, credit, administration, the warehouse/distribution area, fraud, debt collection, or entrepreneurship.”
dangers, and nasty problems for many. However, there will also be wonderful opportunities for success for those with the ability to take advantage of them. It is therefore encumbered on all business owners, administrators, and professional managers to liaise with other professions in order to try and help their business be successful in the future.
THE SEVEN ENDURING LESSONS READAPTED FOR CREDIT PROFESSIONALS Live and die by your people In one sense, credit managers are no different from other professionals which manage
people. We all have to learn how to manage and deal with people and find ways of recruiting, educating, and motivating our employees. Our efforts are of particular importance as we ask them to do the best they can, often under often trying conditions. Unfortunately, senior management does not always understand or assist credit managers with this mission.
Too often, credit managers are restricted with attitudes from the past that we are just “accounts people or debt collectors” and have recognised we are actually sales facilitators. Therefore, we often are subject to financial and technology limitations which make our task of managing and keeping the best people even more difficult. A professional credit manager understands these situations and does the best they can. When we do it well, the results can be outstanding. I understand from my peers in the credit and debt collection world, that the recruitment of competent credit personnel is even more difficult today.
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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Credit Management
It behoves credit managers therefore to think outside the normal recruitment and employment methodologies in order to find the best people available which are already well educated in the world of credit management. In addition, they also need to find people which can be motivated and educated into the world of credit and find out what an interesting and great profession it can be within the right business setting.
Innovation matters “New products and new services are great, but new ways of delighting customers matter most.” It goes without saying, credit management is always on the lookout for new ways of doing business which supports our work and encourages customers to pay with as few hassles as possible. Our efforts may not always “delight” our customers as might a great product or service in a traditional manner.
We can however certainly help our customers to appreciate that our business values their custom by offering great customer service, answering their enquiries promptly, reducing mistakes and offering additional assistance in difficult times when required. Credit managers also try to get management and salespeople to see what we see and that we are there to support them in their endeavours for the good of the business. After all, a credit manager which deliberately denies the business an opportunity to sell more, and to different types of customers, will not add value to either themselves or their business. Management and salespeople unfortunately do not often understand that our efforts can be proactive in sales growth, or why at times we have to say no. The strategies that credit managers need to concentrate on in the above situations is to show management and others within our business: 1. on why we need new ideas about doing business, 2. that we need technology products designed by credit managers to show how our work adds value, to foster better communication and cooperation across all departments within the business.
“Management and salespeople unfortunately do not often understand that our efforts can be proactive in sales growth, or why at times we have to say no.” 16
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
Don’t get lonely Credit managers are people, and all people get lonely at some stage of their lives, or at least have a feeling of loneliness. Therefore, credit managers need access to mentors, peers, and fellow credit professionals. In that regard, the AICM is an organisation dedicated to the needs of all credit and accounts receivable professionals. It is therefore an excellent resource facility for knowledge and for finding people that can understand and can support you as required. In addition, I suggest it is worthy to seek professional acquaintances from other business areas of marketing, sales, accounts payables, customer service, purchasing, fraud and cyber protection, plus of course, our friends from debt collection. It is by cultivating these professional acquaintances which add value above and beyond for your own professional development. The best of these professionals understand they can give you further insights into how people do business from their perspective. As a perfect example, many years ago I read a story about a purchasing manager who attended a sales conference. When questioned by the sales
presenter on why he hadn’t asked any questions like other attendees, he replied, “I attended the conference to find out what sales peoples’ strategies would be used against myself as a purchasing manager”. In another example, when you develop a good relationship with your accounts payable contacts, they are usually forthcoming with all sorts of valuable information. For instance, they may advise of the importance of purchase order numbers, the correct email address for invoices, etc.
Be careful who you partner with As a professional credit manager, you also need to be careful when you cultivate professional relationships. There are some people, even in the credit profession, which will lead you astray, or use you for their own professional needs and give you nothing in return. When this happens, it is all too easy to get disheartened and say that creating relationships are not worth the effort. However, if you persist in talking with more people, you will find helpful acquaintances which will help you with your career. You also need to be wary not to become too friendly with
“... be wary not to become too friendly with your customers and end up giving them advice that could be deemed biased, or reveals you provided specific information and therefore might be deemed to be an associate of that customer.” your customers and end up giving them advice that could be deemed biased, or reveals you provided specific information and therefore might be deemed to be an associate of that customer. For instance, one of your customers may ask you for help because they are in financial difficulties. Be very careful on the type of information you provide. In fact, as was recommended previously to an experienced credit professional by their company lawyer, it would best to suggest they contact government services, and make sure you never recommend any other party.
Cash is still king This is a valid today as it was in the past, and will be so into the future. In fact, as an accountant once said, “… a business without cash is not a business.”
It is one of the roles of the credit manager to encourage customers to buy from their business and then to pay us as quickly as possible. It is no good delivering a product or service to a customer only to waste your business’s funds, to encourage them to pay. That just wastes your business’s cash. In the modern business world, it would be wise to understand the principles of risk and the importance of different sources of income. For instance, a professional investor, is likely to split their funds in to different types of shares, property, cash, perhaps in super, and other funds in bank deposits. They may also have a small portion of your investments in highrisk investments which offer a potentially high return outcome. A business is no different. Unfortunately, today, it seems to be the norm that many businesses seem only interested in selling on credit, or to a specific market category, or to high-return customers etc. It also appears that many of these businesses almost never seem interested in selling on a cash or on an
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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Credit Management
“Another cash protection exercise is to wage war against mistakes, particularly those that are of a repeated nature. Mistakes causes more cash to be spent on resources to solve the problems which create mistakes.” upfront payment basis. When such thinking succeeds in good times, businesspeople can become lazy. As a result, when tough times eventuate, they seem unable or unwilling to change from their past and perceived successful strategies. One of the best ways to increase the accumulation of cash therefore, is to increase your selling options, to different markets, and include a small proportion of total sales to potentially high-risk customers. Credit managers can motivate management and salespeople to understand that they are ideally placed to help with these different sales options. After all, professional credit managers KNOW that different types of customers and sales strategies are the key bringing more cash to the business. If sales and collection of outstanding invoices are completed wisely, these strategies may also reduce the chances of preferential payments should their customers subsequentially become insolvent. Another cash protection exercise is to wage war against mistakes, particularly those that are of a repeated nature. Mistakes causes more cash to be spent on resources to solve the 18
problems which create mistakes. In addition, mistakes give your customers an excuse to delay their payments, and sometimes to never pay you.
Debt can be dangerous As many a business has found, debt has led to cashflow problems that inhibit the business’s ability to take advantage of opportunities as they occur, or to expand their business. Worse still, too much debt has caused a number of businesspeople to lose their business. Every business faces two
different debt types of debt. That which is owed by the business and that which is owed to the business. Debt owed by the management is caused by management’s belief that debt is manageable and adds value to the business. In addition, the interest payments are tax deductable. These thoughts can be true to some extent, however there are other factors at play for which the cost is often not anticipated. The problem with debt is that in bad times, the payment of that debt often becomes problematic when there are unintended consequences. One of these consequences is when the debt owed to the business is not paid by its customers. In the first instance, credit managers are not responsible for the debt owed by the business. It is when debt owed to the business, that an experienced credit manager has a chance to shine. The management of debt owed is often mismanaged in good times, and as explained previously, leads to the development of bad habits which become difficult to resolve quickly in the bad times. Credit managers therefore need to be encouraging
“As many a business has found, debt has led to cashflow problems that inhibit the business’s ability to take advantage of opportunities as they occur, or to expand their business.”
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
management and sales to assist with every customer relationship to reduce the size and age of debt owed by their customers. As we have been informed from various sources, many businesses have hidden and accumulated debt, which they may be unable to clear. Furthermore, insolvency practitioners, government bodies and business advisors advertising now is the time to be proactive and seek professional help to resolve any financial problems. As a consequence, and as has been talked about in the media, businesses and consumers are likely to start reducing their spending. If this situation persists, a number of your own customers are likely to enter some form of insolvency administration with little hope of the debt owed being paid.
“Celebrating success is one of the best strategies to help maintain both corporate and self-motivation strategies that encourage employees in the belief that their services are valued. Celebratory rewards do not need to be expensive.” Celebrating success is one of the best strategies to help maintain both corporate and self-motivation strategies that encourage employees in the belief that their services are valued. Celebratory rewards do not need to be expensive. These rewards can range from a simple thank you, a mention within the company, gift vouchers etc. Whatever celebratory strategies are used within your business, they need to be consistent across the whole business and for every department.
Conclusion
Celebrate success All employees need to be recognised for their successes. Credit and accounts employees are no different, especially when their work leads to better-than expected-results, or exceeds set KPI’s.
After reading the article “Seven enduring lessons from the Fast 100”, I wondered whether these principles would also apply to credit managers. The information presented above is my attempt to put forward the same principles and information for your consideration. Today, managing a successful credit department, or understanding the principles of credit management, is one of the core functions for any business, irrespective of its size.
The fact is, as history shows, businesses have found that great business ideas can come from anywhere within a business or profession, irrespective of whether the profession is in sales, marketing, credit, administration, the warehouse/distribution area, fraud, or debt collection. We can also find great ideas from entrepreneurs. The business world is far more complex today than it ever was. In 2024 and the years ahead, there will be dangers and nasty problems for many. However, there will also be wonderful opportunities for success for those with the ability to take advantage of them. It is therefore encumbered on all business owners, administrators, and professional managers to liaise with other professions to try ideas that offer opportunities to help their business be successful in the future.
*Kim Radok MICM CCE Credit Matters E: info@creditmatters.com.au www.creditmatters.com.au
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Customer Service and Technology
How to reduce DSO and build a healthy balance sheet By Simon Beck* Reducing DSO can improve cash flow, shorten your cash conversion cycle and boost your bottom line. Learn how to reduce DSO and build a healthy balance sheet.
Simon Beck 20
Sufficient cash flow is incredibly important to business success. If your business hopes to meet stakeholder, investor and peer expectations, hitting your key performance metrics is crucial. However, presenting a strong, cash flow-intensive balance sheet can be a challenge, especially if working capital is stuck in accounts receivable (AR). For small to mid-sized suppliers, lengthy customer payment terms are common, particularly during times of economic uncertainty. If you’re waiting months for invoices to clear accounts receivable, your working capital is most likely depleting – potentially jeopardising business continuity and growth. Fortunately, there are ways to disrupt long payment cycles and improve your company’s metrics
quickly and easily. If your goal is to boost cash flow, one of the most important metrics to track is days sales outstanding (DSO). What exactly is DSO and how can you improve (lower) this metric?
What is days sales outstanding? Days sales outstanding is a measure of the number of days it takes for accounts receivable to collect cash from outstanding invoices. In other words, DSO measures how quickly it takes your customers to pay invoices. DSO goes hand in hand with the cash conversion cycle (CCC), a metric that is used to evaluate the efficiency of a company’s operations and management, and which measures how long it takes to convert inventory investments into cash. The cash conversion cycle is calculated using the following formula:
“If you’re waiting months for invoices to clear accounts receivable, your working capital is most likely depleting – potentially jeopardising business continuity and growth.”
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
“DSO goes hand in hand with the cash conversion cycle (CCC), a metric that is used to evaluate the efficiency of a company’s operations and management, and which measures how long it takes to convert inventory investments into cash.”
CCC = Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) – Days Payable Outstanding (DPO) The Cash Conversion Cycle Where: z DIO is the time it takes to sell inventory. z DSO, as described, is the time it takes to collect receivables. z DPO is the time it takes to pay bills without incurring penalties. A low CCC indicates that you have a healthy cash flow and sufficient working capital, while a higher CCC indicates that you may lack the cash flow needed to operate and grow.
Maintaining a low DSO is crucial for keeping the cash conversion cycle to a minimum. There is no magic DSO number to aim for, but you can evaluate average DSO values among competitors and other businesses in your industry. Benchmarking your DSO against similar companies can help you determine what values are achievable. In 2020, many customers began extending payment
terms with suppliers – some as long as 90 to 120 days or more – to maintain cash flow as the economy slowed. Lengthy payment terms continue to challenge suppliers today as rising inflation and other market factors prompt customers to hold on to working capital. If your business has experienced lengthened payment terms, you may have a high average DSO and a longer cash conversion cycle as a result.
Days sales outstanding equation Days sales outstanding measures the average collections time across your customers. It’s a metric that is usually tracked
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Customer Service and Technology
monthly, quarterly or annually. To calculate DSO, divide accounts receivable by total sales in a given period, then multiply this number by the number of days in that period:
DSO = (AR / Total Credit Sales) x Days The Days Sales Outstanding Equation For example, imagine that over 90 days, Supplier A amassed $100,000 in its accounts receivable and made $250,000 in sales. Supplier A’s DSO is 36, because: $100,000 / $250,000 = 0.4 x 90 days = 36 DSO With a DSO of 36 days, Supplier A is close to the average DSO value across industries of 37.3 in Q3 2022.
How to improve days sales outstanding 1. Evaluate customer credit risk How thoroughly do you assess customer creditworthiness? A high DSO can signal customers that make late payments. Doing your due diligence with new customers is a proactive way to avoid late or nonpayments. Start by determining the level of credit risk your business is willing to accept. If you already have customers that pay late, you can apply these criteria to them. Ensure that your sales team is on board so that new customers with inadequate credit history don’t slip through the cracks, or consider using trade credit insurance to mitigate risk without turning away new business. 22
2. Manage your AR closely How does your business keep track of outstanding invoices? As part of your collections strategy, establish processes for prompt follow-ups. Investigating reasons for late payments is also valuable. For example, it may be possible to negotiate a payment plan or early payment incentive for customers that have cash flow issues of their own. Setting clear terms for late or nonpayment can also deter customers from missing due dates and reduce DSO. Negotiate financial penalties for late payments and consider dropping customers that consistently pay past the agreed term. 3. Send timely, accurate invoices Customers are more likely to pay on time, or even early, if you send invoices as soon as possible. Invoicing software helps expedite the process, providing templates and automated payment reminders to streamline invoice creation and follow-ups. It can also help detect and correct errors that may otherwise extend payment timelines and raise DSO. Some businesses opt to time invoices strategically, sending them when customers are more likely to open emails and make payments – such as in the middle of the business day, midweek. 4. Provide flexible payment options Four out of 5 US firms still use paper checks to pay bills. To avoid the delays caused by manual processes and
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
paper-based systems, offer customers card, automated and/or online payment options. When customers can choose the payment method that’s most convenient for them, you’re more likely to get paid faster, increasing cash flow and lowering your DSO. 5. Negotiate payment terms strategically If you land a big customer, you may be tempted to accept its preferred payment timeline because you don’t want to harm the relationship by negotiating shorter terms. However, neither party benefits when extended terms deplete your working capital. Without sufficient cash flow, you might not be able to deliver goods or services on time and in full, which could jeopardise your financial stability or even create supply chain disruptions. The first step is to assess your financial statements and determine how flexible you can afford to make your payment terms. Try to negotiate terms that suit the customer without putting your cash flow at risk. You can also leverage early payment incentives to reduce an otherwise lengthy DSO, especially if customers have rigid terms. 6. Offer early payment incentives Early payment incentives are a cost-effective way to reduce DSO while strengthening your customer relationships. Put simply, these incentives give your customers a small
“Early payment incentives are a cost-effective way to reduce DSO while strengthening your customer relationships. Put simply, these incentives give your customers a small discount in exchange for early payment.” discount in exchange for early payment. Many large customers already participate in early payment programs, making it easy for you to reduce DSO immediately. Here’s how it works with C2FO’s Early Payment program: 1. Participating customers upload approved supplier invoices to C2FO’s online platform. 2. Suppliers log in to review their outstanding invoices, choose which ones to accelerate and set a desired discount rate. 3. If the discount offer is accepted, the customer funds early payment to the supplier upfront, minus the discount cost.
Unlike traditional early payment approaches, this model enables suppliers to choose when to request early payment and at what cost. This puts you in control of your DSO and increases cash flow – usually at a much lower cost than other working capital solutions such as borrowing, lines of credit or invoice factoring.
The bottom line Days sales outstanding is a crucial metric for evaluating cash flow and ensuring your business has the working capital required to operate, meet customer demands and grow. Many small to mid-sized suppliers struggle to keep DSO at a reasonable level, especially
as customers lengthen payment terms to raise their own bottom lines. The good news is that you can use simple strategies – from assessing customer risk to offering flexible payment options – to shorten DSO. If you need to take control of your DSO right now, early payment incentives are a good place to start. Click here to learn more about early payment programs – or find out whether your customers already use C2FO so you can request early payment today.
*Simon Beck Senior Director ANZ, C2FO
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Customer Service and Technology
How the right payment solution can drive growth and transform your supply chain By Adrian Floate MICM*
Adrian Floate MICM 24
Despite the disruptions of recent years pushing businesses to move as much of their operations online as possible, friction still exists in business-to-business (B2B) payments. This friction causes late payments, has flow-on effects across the supply chain, and increases credit risk, particularly when companies rely heavily on trade credit to make sales. Alarmingly, almost half of all business invoices are paid late, and 40 per cent of accounting professionals still spend half their time on manual tasks. Taken holistically, late payments hinder the cash flow cycle and can result in significant operational disruptions, even business failure.
The gravity of the problems that late payments cause highlights the opportunities available to businesses through the transformation of financial systems and processes. This transformation can have wide-reaching benefits, from empowering finance and credit management teams to be more strategic and making work more efficient for warehousing and supply chain management professionals – but only if the right solution is implemented.
Leveraging digital solutions drives a competitive advantage and reduces payment friction The typical sales process fits into three categories: the trading window, trade credit,
“The gravity of the problems that late payments cause highlights the opportunities available to businesses through the transformation of financial systems and processes.”
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
“In a traditional scenario where the sales process remains fragmented, the supplier needs to wait for payment, while structured credit allows them to continue buying inventory and supporting customers.” and structured credit. These categories often operate independently, with a lack of integration or alignment between the business’s inflows and outflows. If trade credit is overextended and customers are paying late, businesses become reliant on structured credit (credit lines, invoice finance, an overdraft facility, or traditional debt) to drive their cash flow. In a traditional scenario where the sales process remains fragmented, the supplier needs to wait for payment, while structured credit allows them to continue buying inventory and supporting customers. Bringing
trade terms into each transaction with digital technologies reduces friction between the trading window, trade credit, and structured credit. This allows for a more seamless experience, efficient information exchange, and, ultimately, better payment flow across the supply chain. Everyone in a business ecosystem should benefit when a company implements a new system. By implementing solutions that focus on eliminating errors through collaboration and effective data interchange, companies gain a competitive advantage by delivering a better experience to both suppliers and customers.
And, most importantly, everyone can get paid on time.
Mutually beneficial systems boost collaboration and productivity There are several things businesses can do to automate their transaction lifecycle and reduce friction. Implementing an automated payment system is about your accounts receivable team creating collaboration with your customers’ accounts payable teams. Similarly, it’s about your accounts payable team creating electronic remittance advice that can be automatically integrated into every supplier’s financial systems.
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Customer Service and Technology
Further, with systems in place to automate data integration and reduce B2B payment friction, credit decision-making can be automated, too, with more data available to analyse and proactively prompt action when a customer’s creditworthiness may damage the business’s financial stability.
Easily optimise payment terms and extensions Having the tools to collaborate on payment terms and extensions with customers without sacrificing cash flow drives strategic, financial, and operational transformation. By offering a variety of payment options with flexible terms, such as the ability to pay later with on-demand finance solutions, suppliers can close bigger deals. Similarly, buyers are also more likely to buy from suppliers that offer flexible payment terms. For example, when a customer chooses buyer finance to pay for their purchase over time, the supplier gets paid in full and on time, while the customer can schedule their payments to better align with their cash flow. This boosts cash flow across the supply chain, making transactions beneficial to all parties. With a tech-driven solution, businesses can easily offer better and more flexible payment terms, and easily collaborate on every transaction. But
“With a tech-driven solution, businesses can easily offer better and more flexible payment terms, and easily collaborate on every transaction. But it’s not just about the end benefits.” it’s not just about the end benefits. Businesses need to think about having the right communications in place, too. When a new payment solution is implemented, the business should develop effective communication plans to discuss and update existing payment terms. This may take the form of templated materials for relevant people to send to their customers or setting up short phone calls or demo sessions to show customers and suppliers how the technology is going to make it easier for everyone to transact. Over time, the transaction data gathered through the system can be analysed to assess customer payment behaviour so credit limits and other payment terms can be adjusted proactively.
They’re designed to improve cash flow, lower the cost of carrying accounts receivables, and reduce reliance on structured credit. Importantly, with the right integrated payment solution, an ESD can be either supplier or buyer originated. The key buyer benefits of ESD include cost savings and enhanced supplier relationships. And for suppliers, ESD reduces risk and improves cash flow. By implementing ESDs, business suppliers can encourage customers to make prompt payments. Similar to communicating the benefits of a new system when it is implemented, businesses should also outline the advantages of early payments through targeted activities, such as emails and phone calls to key customers and suppliers.
Consider early settlement discounts to amplify mutual benefits
Selecting the right payment service provider
Early settlement discounts (ESDs) are an incentive offered between trading partners in exchange for faster payment of invoices.
“By implementing ESDs, business suppliers can encourage customers to make prompt payments.” 26
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
Selecting the right technology partner is critical when you’re embarking on any kind of digital transformation. Your company and the vendor need to be aligned on priorities, and the vendor needs to demonstrate their understanding of your business’s problems. Further, the vendor should have a consistent commitment to innovation. Their
innovation plans should be clear so that the investment made today continues to deliver longterm benefits to the business as its needs evolve. One of the most important aspects of vendor selection is finding solutions that deliver benefits not just to your business but to your trading partners, too. In the world of payments, businesses should be looking for solutions that offer end-toend data integration so that information is shared efficiently across the supply chain. For example, with an integrated payment and procurement solution, a price rise can be communicated with the entire supply chain through the company’s digital catalogue that reflects price updates in realtime. A process review may be a necessary part of vendor selection, too. At this point, your business needs to understand if your vendor can adjust their processes to meet your specific needs or if your processes need to be revised as well. Finally, transaction fees, security features, and integration capabilities are other important things to consider when choosing a provider. The right provider will be able to work collaboratively with you to ensure you’re both aligned, and the solution works for everyone.
Reduce credit risk and boost cash flow across the supply chain with integrated payments The ideal payment technology partner will provide software
“The ideal payment technology partner will provide software that takes the friction out of your B2B payments and removes fragmentation between the trading cycle, trade credit and structured debt.” that takes the friction out of your B2B payments and removes fragmentation between the trading cycle, trade credit and structured debt. By implementing solutions that deliver benefits not just to your business but across your supply chain, you can reduce the creditto-cash conversion cycle, which reduces trade credit risk and reliance on structured credit to deliver your products and services. The longer integrated payment solutions are active in the business, the more valuable data is gathered. This data can help drive stronger commercial
decision-making, delivering wide-reaching benefits to your business and its suppliers and customers. As with any wave of innovation, the early adopters come out in front. Using technology to transform your payments and deliver benefits across the supply chain is no different. Start looking at ways your business can transform its payments today to drive growth and efficiencies across your entire supply chain in the long term. *Adrian Floate MICM Managing Director at Spenda www.spenda.co
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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Customer Service and Technology
The ‘new’ you: Becoming a credit superhero By Kirk Cheesman MICM*
In the fast-paced business landscape of today, time is money. Now it’s your time to be your company’s accounts receivable superhero. Businesses continually grapple with the challenges of invoicing, tracking payments, and ensuring a steady cash flow. However, implementing an Accounts Receivable tool that not only streamlines these processes but also promises to save valuable time and accelerate your payment cycle is a no brainer. That’s why we’ve created the new superpower ‘easyAR’.
1. Real-time tracking and visibility AR software should offer realtime tracking of invoices and payments, providing you with an unparalleled window into your financial transactions. Instead of waiting for manual updates or reconciling accounts, you can
Kirk Cheesman MICM 28
monitor your accounts receivable status on a daily basis. This level of transparency empowers you to make more informed decisions, identify potential issues early on, and proactively manage your cash flow. Superpower: Superman had x-ray vision, now you can see through problem payers.
2. Customisable reports for strategic insights In addition to real-time tracking, software should offer customisable reports that cater to the specific needs of each business. These reports offer insights into payment trends, outstanding balances, and customer behaviours. Equipped with this information, you can make strategic decisions to optimise your accounts receivable processes, allocate resources more effectively, and enhance overall financial performance. easyAR, for
“In addition to real-time tracking, software should offer customisable reports that cater to the specific needs of each business.”
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
“Businesses continually grapple with the challenges of invoicing, tracking payments, and ensuring a steady cash flow. However, implementing an Accounts Receivable tool that not only streamlines these processes but also promises to save valuable time and accelerate your payment cycle is a no brainer.” example, has inbuilt reports that help manage the requirements of a Trade Credit Insurance policy, like running reports for overdues and claims lodgement. Superpower: Spiderman had web to capture baddies… now you can create your own web of data links.
3. Automated reminders for timely payments Late payments can be a significant headache for businesses, affecting cash flow and potentially straining relationships with clients.
Software will mitigate this risk by automating payment reminders. The software can send reminders to customers before or on the due date, reducing the likelihood of late payments. This not only saves time spent manually following up, but also fosters a smoother and more professional payment experience for both parties. Superpower: The Flash had speed, empathy, and temperature manipulation… now you can speed up payments and turn up the heat on late paying customers.
4. Streamlined payment processing The payment process becomes seamless for both you and your client. The software supports various payment methods, making it convenient for customers to settle their invoices promptly. By offering flexibility in payment options, you can cater to the preferences of your diverse clientele, ultimately expediting the payment process. Superpower: Cat Woman had speedy reflexes… now you can offer speedy flexible payment options.
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Customer Service and Technology
5. Enhanced cash flow management The efficient management of accounts receivable directly impacts a company’s cash flow. By automating invoicing, tracking payments, and optimising the collection process, businesses are empowered to maintain a healthier and more consistent cash flow. This, in turn, provides the financial stability needed for growth, investment, and overall success. Superpower: Green Lantern could hypnotise people and become invisible… now you will stand out and not be invisible with extra cash in the bank account.
6. Reduced manual workload and human error Manual handling of accounts receivable processes is not only time-consuming but also prone to errors. Significantly reduce the need for manual intervention, minimising the risk of data entry mistakes, miscalculations, or oversights. By automating routine tasks, you can free up your resources to focus on more strategic activities, boosting overall productivity. Superpower: Wonder Woman had strength and speed to fly through her work… now you can speed through manual tasks, which gives you more time.
7. Improved customer relationships Efficient accounts receivable processes contribute to positive customer experiences. Timely and accurate invoicing, coupled with automated communication, enhances the professionalism 30
“Manual handling of accounts receivable processes is not only time-consuming but also prone to errors.” of a business. Customers appreciate the convenience of streamlined payment processes and timely reminders, leading to improved satisfaction and loyalty. Superhero: Batman did not possess any superpowers, but built relationships on intellect, skills and wealth… your customers will welcome increased communication and ease of making payments. easyAR emerges as a game-changer, offering a comprehensive solution to the challenges associated with managing accounts receivable. By automating invoicing, providing real-time visibility, and optimising the payment process,
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
easyAR not only saves time but also accelerates the payment cycle, leading to improved cash flow and enhanced financial stability. Businesses that embrace easyAR position themselves for success in a market where efficiency and agility are key. What Superhero will you and your team become with more free time each month?
*Kirk Cheesman MICM Group Managing Director National Credit Insurance (Brokers) Pty Ltd E: kirk.cheesman@nci.com.au T: 1300 654 500 www.nci.com.au
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Economic Outlook
Update from across the ditch:
Arrears still pose a key threat to Kiwi households in 2024 By Monika Lacey MICM*
Monika Lacey MICM
With a new year and new government, all eyes are on New Zealand’s economic climate and how consumers and businesses will fare against a fragile credit lending backdrop. Whilst consumer credit demand in December and January rose across both personal and BNPL products, there was a simultaneous increase in arrears for December 2023.
This increase is aligned to seasonal trends with 439,000 individuals falling behind on payments, which is up 4,000 accounts month-on-month. There has also been a rise in mortgage accounts past due in December 2023, exceeding 20,000 to a four-year high, coming off artificially low, coviddriven trends. The real estate sector has experienced an increase in first
Credit Demand by Product Type
32
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
Consumer Arrears Trends
Year on Year Change %
Mortgages
-8.1%
Auto Loans
-13.0%
Credit Cards
+4.7%
Personal Loans -5.9% BNPL
+5.9%
Retail Energy
+5.8%
home buyers, who made up 24% of all new residential mortgage lending in the fourth quarter of 2023. There has been a recent 11% dip in loan conversion rates compared to the previous year, following the introduction of new CCCFA regulations in 2021. Since then, the CCCFA has had an impact on credit approval. Commerce and Consumers Affairs Minister Andrew Bayly recently announced the reformation of the CCCFA as a priority for the new government. We also saw company collapses grow year-on-year, with construction feeling the pinch particularly – 26% of all company liquidations in the last year came from this sector. Business credit defaults remain elevated with sectors such as property, transportation and retail notably grappling with financial challenges. 2024 is not set to be plain sailing for Kiwi households and businesses alike. Financial resolutions will need to stretch
December 2023
1+ Days in Arrears
30+ Days in Arrears
60+ Days in Arrears
90+ Days in Arrears
# Consumers
439,000
162,000
105,000
83,000
5 Credit Actives
12.01%
4.43%
2.87%
2.28%
vs Dec 2022
+6.1%
+5.6%
+5.2%
+2.6%
vs Dec 2021
+17.1%
+24.5%
+26.2%
+22.5%
vs Dec 2020
+14.7%
+20.1%
+19.8%
+14.9%
vs Dec 2019
+4.5%
+5.0%
+6.4%
+2.4%
vs Dec 2018
+4.4%
–4.5%
–4.8%
–8.6%
vs Dec 2017
–1.7%
–7.5%
–6.3%
–14.6%
Home Loan Arrears
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
33
Economic Outlook
Credit Card & Auto Loan Arrears
far beyond January to ensure financial security over the course of the year and beyond.
Demand for BNPL, personal loans up over holiday season
Telco & Utility Arrears
Consumer credit demand was up 3% year-on-year in January 2024, driven by increased demand for personal loans and BNPL products for the holiday season. Furthermore, auto loan and mortgage applications were down 13% and 8% respectively year-on-year.
Arrears climb in December As 2023 closed, consumer arrears climbed to 12.01% of the credit active population in December (up from 11.90% in Nov 2023). The number of people behind on their payments has risen to 439,000 (compared to 435,000 in November).
Mortgage delinquencies climb
Personal Loan & BNPL Arrears
The proportion of home loans reported in arrears rose in December, with 1.40% of accounts now in arrears (up from 1.29% in October). There are over 20,800 mortgage accounts past due, which is up 21% year-on-year, with many loans due to be repriced in the next 3-6 months. We also saw both credit card and auto loan arrears rise in December.
Telco arrears reach four year high For the first time since February 2020, telco arrears have risen to 34
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
double digits as 10.1% of accounts were reported in arrears in December. The number of households behind on retail energy payments also rose in December 2023 to 4.9%, compared to 3.5% in December 2022. Personal loan and BNPL arrears also rose in December (9.3% and 8.4% respectively).
New Consumer Lending (Indexed to 2019)
Overall credit lending down Alongside climbing arrears, overall lending was also down in December 2023. New mortgage lending in December 2023 was down 8% year-on-year as sale volumes remain relatively low across the country compared to prior years.
“The number of households behind on retail energy payments also rose in December 2023 to 4.9%, compared to 3.5% in December 2022.” Conversion Rates by Credit Type
open accounts as a proportion of application enquiries made
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Economic Outlook
Average Mortgage Amount for FHB’s
2021: $535K
2022: $575K
2020: $455K 2019: 2018: $400K $370K
2023: $550K
Additionally, non-mortgage new lending (credit cards, vehicle/personal loans, BNPL and overdrafts) is down 12% year-on-year, reflecting lower volumes of new vehicle loans and unsecured personal loans compared to 2022. Overall new household lending is 8% down on a year-onyear basis.
Credit conversions remain impacted by CCCFA changes Since the CCCFA changes came into effect in December 2021, conversion rates have been on the decline with overall credit conversion rates 11% lower in 2023 compared to 2021.
First Home Buyer snapshot Taking a look at the first home buyer market, the average mortgage loan for these buyers
Credit Demand by Product Type
36
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
126
has increased by 50% over the 5 year period from 2018 to 2023. After peaking at $594K in the first quarter of 2022, this figure has since dropped back to $540K in the fourth quarter of 2023 (down 9%).
Sector
Business credit defaults, liquidations up
Construction
-1%
+22%
763
+26%
2.2X
Hospitality
+19%
+4%
745
+13%
2.2X
Retail Trade
+8%
+32%
773
+74%
1.3X
Transport
+7%
+34%
735
+17%
1.6X
Property/ Rental
-5%
+65%
821
+7%
0.8X
All Sectors
+3%
+27%
790
+16%
1.0X
Avg Credit ∆ Company Liquidation Score Liquidations Rating
Note: The above table shows change on a year-on-year basis
Business Credit Demand: 2020 to 2023 Company Liquidations
250 250
200 200
150 150
100 100
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
Jan-24 Jan-24
Jul-23 Jul-23
Jan-23 Jan-23
Jul-22 Jul-22
Jan-22 Jan-22
Jul-21 Jul-21
Jan-21 Jan-21
Jul-20 Jul-20
0
Jan-20 Jan-20
50 50
Jul-19 Jul-19
*Monika Lacey MICM Chief Operating Officer Centrix Credit Bureau of New Zealand www.centrix.co.nz
∆ Credit Defaults
Jan-19 Jan-19
Business credit defaults climbed in December 2023, reaching 27% year-on-year while company liquidations rose up 16% year-onyear. Construction companies are twice more likely to fail (2.2X) than the typical NZ business, with 26% of all company liquidations in the last year coming from this sector. Credit defaults are rising fast for the sector, particularly for small sized construction firms (up 47% in the last year).
∆ Credit Demand
37
Economic Outlook
Looking back on 2023 what should we expect in 2024? As credit managers consider volatile market conditions in 2024, illion’s Head of Analytics, Louis Tsang MICM* has summarised key data points from the past 12 months. In this article he also suggests what to watch closely as we head further into the year.
Commercial Risk Company Insolvencies In 2023, businesses have gone through a turbulent ride. No surprise, a higher number (+43%) of businesses becoming insolvent in 2023 compared to prior year. Over a quarter of insolvencies came from the construction
Louis Tsang MICM 38
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
(28%) industry, followed by accommodation and food services (15%). We should see a small seasonal reprieve in early 2024 numbers but expect the elevated monthly trend to continue through 2024 as built-up stress which businesses are facing to materialise as company failures.
“Accommodation and food services and Retail were amongst the worst performing industries (up 30% and 42% Y-O-Y), being heavily impacted by unexpected events and consumer spending downturns.” Trade Late Payments Average late payment days1 have increased sharply in the first half of 2023, although since Aug-23 we have seen this trend flatten somewhat. Overall, the year ended 60% higher year-on-year. Accommodation and food services and Retail were amongst the worst performing industries (up 30% and 42% Y-O-Y), being heavily impacted by unexpected events and consumer spending downturns. The deteriorating trends (across most sub-groups e.g. pubs, cafes, restaurants, hotels) is likely to continue into 2024. Construction had a historical 6-year high, but average late days have tapered in the past 3 months. It hasn’t been even across the segment as well, with February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
39
Economic Outlook
electricians and plumbers seem to be managing better compared to painters and tilers. Some sectors are, however, diverging away from the
deteriorating trend and doing relatively well. We’re seeing manufacturing and wholesale trade performing much closer to long-term numbers.
“We’re seeing manufacturing and wholesale trade performing much closer to long-term numbers.” Trade Late Payments
2022 Average
2023 Average
Average Days Late
Historical Average (‘18-21’)
Accom. and Food
14.6
12.8
16.7
Construction
10.7
10.9
13.5
Manufacturing
12.0
10.5
12.2
Retail
11.6
10.2
14.5
Wholesale Trade
11.5
10.3
11.7
Consumer Risk Consumer Delinquencies2 Credit cards delinquencies have been trending to seasonal expectations – the sharp increase seen in personal loans in early 2023 have seasonally subsided but still ended the year 14% higher. The number of home loans with payments behind have increase 25% Y-O-Y. Recent vintages written after mid-2022 are driving this increase (i.e. some loans going to arrears much quicker). The increases observed in early 2023 seem to be tapering off, but it seems like home loan 30+ delinquencies will stabilise at a higher base in 2024. Hardship More consumers have entered into Hardship arrangments2 in 2023, especially in the home loans portfolio where 0.4% of all home loan accounts (roughly 23,000 accounts) are in some sort of temporary hardship arrangement. Even though inflation has slowed if credit repayments remain high throughout the year, we will see more consumers seeking support from their lenders in 2024. Consumer Spending Despite the clear challenges consumers are facing, there has been no significant decrease in consumer spending. Spend at cafes and restaurants over the last 6 months of 2023 have been roughly the same compared to the same period in 2022.
40
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
Spend data at department stores in the months leading to Black Friday/Holiday sales showed signs of slowing down – but consumers have been out in force spending (roughly 3% more in the last 6 weeks compared to the same period last year). *Louis Tsang MICM Head of Analytics illion www.illion.com.au
FOOTNOTES: (1) Trade late payments measure how late, beyond agreed terms, business are paying other business. Average Days Late measures the average of all companies in AU / NZ. (2) 30+ Delinquencies are calculated as [number of accounts 1 payment behind] / [number of accounts]. (3) Hardship % calculated as [number of accounts flagged as “A” (Temporary arrangement)] / [number of accounts]. Mandatory reporting of Hardship volumes started in July 2022. (4) Indexed to the average weekly spend in 2021.
AREAS TO LOOK OUT FOR IN 2024 Built up stress will materialise further into higher insolvencies across troubled sectors. Accommodation, Food Services and Retail are the sectors to watch for. Monitoring hardship trends will be important for home loan portfolios. 75% of home loan accounts prior to entering Hardship are not yet behind in their payments. Consumers with multiple credit commitments will struggle more and will have to prioritise repayments so monitoring risk across portfolios is vital.
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
41
Risk Management
What’s an ideal credit risk management process? By Brendan Sherry*
Whether you’re a freshfaced graduate or a seasoned credit manager, a clear, consistent credit risk management process is key to doing more business, with the right customers, and getting paid faster. Let’s take a look at what a best-practice credit risk management process looks like.
Benefits of a proper credit risk management process An effective, well-designed credit risk management process will save you time, deliver your customers a better experience, increase employee satisfaction, support compliance with government regulations, protect your assets and help secure your cash flow. In a nutshell, with an efficient credit risk management process you can do away with the ambulances at the bottom of the credit cliff. Any issues should be quickly identified as they crop up,
Brendan Sherry 42
giving you the opportunity to proactively manage your risk exposure.
What does an ideal credit risk management process look like? So, you’re sold on building a proper credit risk management process, but unsure of what one actually looks like. Underpinning an ideal credit risk management process is exactly that – a process. Map out all the steps a customer takes as they journey through your purchasing process. From everything they must do to become a customer, to the steps you take to collect repayment for the goods or services provided. Once you’ve written them all down, you should be able to group them into the following overarching customer relationship stages: 1. Onboarding 2. Account management 3. Receivables
“... with an efficient credit risk management process you can do away with the ambulances at the bottom of the credit cliff.”
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
BEST PRACTICE CREDIT RISK MANAGEMENT
1 2
APPLY ONLINE Make it quick and easy for customers to do business with you with an online application form.
7
CREDIT HISTORY Ensure your customer’s level of risk is acceptable to your business by checking credit history.
3 4 Onboarding: The goal of the onboarding stage of the journey is to ensure you start your relationship with customers with eyes wide open and having completed a thorough risk assessment. This stage is where you gather all the decision-making information you need to onboard them as a customer, complete a credit assessment and do due diligence checks. And, if successful, set the tone for the relationship going forward with appropriate credit terms. This is also a key area impacting customer experience – fast, easy onboarding can make all the difference in
6
PPS REGISTER Secure your assets by registering them on the government PPSR register.
MONITOR Proactively monitor customers’ ongoing risk by setting up alerts for when material changes occur.
5
DEFAULT Submit default information to credit bureaus to make other businesses aware of a risky customer.
GET PAID Remind customers of overdue invoices or an approaching due date to ensure timely payment.
ADJUST TERMS Adjust trade and credit terms proactively as customers’ circumstances change.
“The goal of the onboarding stage of the journey is to ensure you start your relationship with customers with eyes wide open and having completed a thorough risk assessment.” creating the right tone for a productive, respectful relationship. Key onboarding steps include: z Gathering customer information for credit applications z Identity verification z Credit history checking Reviewing payment default data z PPSR check and registration
Account management: Account management is like your ongoing homework. You’ve moved past the new customer honeymoon period and now your sales and marketing team are likely working hard to keep them engaged and making repeat purchases. This is the time where a strong credit risk management process comes into its own.
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
43
Risk Management
Being proactive is the difference between a credit team that ticks the boxes and one that is gold standard. Proactive monitoring of your customers so you’re aware of real-time changes in a customer’s creditworthiness or risk of default can have a significant impact on profitability and getting paid. Being agile here and acting on real-time knowledge is crucial – when a customer’s credit score changes, their credit limits or your credit policy should adjust with this. Core steps on your checklist here should include: z Routine credit rating monitoring z Setting up automated rules to be alerted when a customer’s risk profile changes 44
“Proactive monitoring of your customers so you’re aware of real-time changes in a customer’s creditworthiness or risk of default can have a significant impact on profitability and getting paid.” z Regular health checks of your credit portfolio z Mitigating risk by amending credit terms as required Accounts receivable: Crunch time. If all has gone well, then the accounts receivable stage of the journey should be transactional – job completed, invoice sent, payment received. Unfortunately, for a variety of reasons this is often not the case.
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
However, strong credit risk management can go a long way to smoothing this part of the journey for both businesses and customers and ensure payment is collected in a timely manner. Building in automation to this part of the process can save you valuable time. Cash flow can be better protected with easy debtor prioritisation based on real-time debtor risk and trade payment insights. An ideal credit risk
management process should include: z An automated accounts receivable management system z Debtor risk insights z Trade payment insight z Templated, consistent collections communications.
How do you know if your credit risk management process is a good one? There are clear signs that you have built, and are running, an effective credit risk management process: ONE: Fast, easy onboarding Having a good process will speed up new customer set-up. Doing business with you will be easy for customers using an online application form. And, with all the customer information you need to hand every time, you’ll complete due diligence faster. Customer credit decisions will be equally quick and easy, with your tools doing the hard work, making credit recommendations to you based on criteria you’ve previously set. TWO: Real-time creditworthiness monitoring A robust process will have automation baked in. Realtime alerts will let you know if a customer’s potential risks
“A well designed, effective credit risk management process will reduce the amount of manual receivables tasks you are burdened with.” or probability of default has changed, or if an adverse event has been logged against them. Taking it one step further, the true value of this stage of the process is action. With real-time credit risk knowledge to hand, your credit terms will be adjusted as required to mitigate risk more effectively. THREE: Minimal manual accounts receivables tasks No sticky notes reminding you to call a customer on a particular date. A well designed, effective credit risk management process will reduce the amount of manual receivables tasks you are burdened with. Automation tools that form the foundation of your process will prioritise who you need to chase day to day. They’ll remove the juggle between systems with all financial information, customer contact information and communications history in one place. Chasing customers should be faster and only those extremely tricky debtors should require human intervention.
“Customer credit decisions will be equally quick and easy, with your tools doing the hard work, making credit recommendations to you based on criteria you’ve previously set.”
Bottom-line, you’ll be getting paid faster.
How’s your process looking? If you still have a few lingering questions about your own credit risk management process, now is the time to act. Not sure where to start? Map your current process out. Identify the area that causes the most internal pain or is particularly hard for customers to navigate. Some questions to ask yourself are: z Do you use the PPS register? z Can you quickly and accurately register assets on the PPS register? z Are your customer application forms digital or paper? z Have customers raised concerns or frustration with the steps they must complete to start trading with you? z Are you automatically alerted to changes in customers’ financial situations? z Do you have a consistent, automated accounts receivable process? z Is chasing payment a series of time-consuming, manual tasks for you? *Brendan Sherry Corporate Specialist CreditorWatch www.creditorwatch.com.au
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
45
PPSR
PPSR Housekeeping
A 12-step checklist for reviewing and updating your registrations By Malcolm Poslinsky MICM CCE*
Malcolm Poslinsky MICM CCE 46
With the start of a new year, it’s prime time to think about implementing a maintenance housekeeping process to make sure you’re always on top of your registrations on the Personal Property Securities Register (PPSR). Keeping your registrations current isn’t just a one-time task – it’s an ongoing commitment to safeguarding your interests. The PPSR is important for businesses that hire, lease, finance, sell goods on credit or extend credit to customers. It’s there to protect your business so you can recover property rightfully belonging to you or get paid in case of a customer insolvency. Since the 2012 introduction of the Personal Property Securities Act (PPSA), you need a correctly registered security interest to protect goods that you have an interest in. Even a minor error during PPS registration can invalidate your security interests.
For example, an unnoticed mistake made when identifying the grantor might render your claim worthless when attempting to recover goods from an insolvent customer. Beyond registration errors, changes in customer details pose risks if they go unnoticed and are not corrected. Often, customers fail to communicate changes like a new trading entity, placing the responsibility on your business to monitor and update accordingly. Here’s a 12-step checklist for how to keep your registrations updated.
STEP 1: Match and register accounts z Check that all current accounts (or accounts within your “selection criteria”) are registered. z Match the PPSR registrations to your debtors listing. z Register missing accounts.
“Keeping your registrations current isn’t just a one-time task – it’s an ongoing commitment to safeguarding your interests.”
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
z If any accounts are no longer active and have no outstanding balance, consider discharging the registration.
STEP 2: Check the grantors match the customer records
“Since the 2012 introduction of the Personal Property Securities Act (PPSA), you need a correctly registered security interest to protect goods that you have an interest in.”
z Check grantors are correctly described. The PPSR regulations are very specific depending on the entity type and available identifiers. The following table is simplified but should suffice for the majority of cases:
There are special requirements for other entities such as trustees, registered schemes, foreign companies, clubs, charities, associations, and unincorporated entities.
STEP 3: Validate ACNs and ABNs
Information required
Source
Ltd or Pty Ltd companies
ACN
ASIC
Individual and sole trader
Full name and date of birth
Driver’s License
ABN of the partnership
ABN Register
ABN of the trust
ABN Register
Debtor/Grantor Type
Partnerships Trusts
z Confirm ABNs are still active and ACNs registered. Entities might undergo changes such as cancelling their ABN, deregistering their ACN,
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
47
PPSR
or entering some form of administration.
STEP 4: Ensure accurate asset description z Check that assets are correctly described (if applicable). The rules for describing serial numbered goods are very specific. For example, Motor Vehicles are described in the following order: — VIN, and if there is no VIN, — chassis number, and if no VIN or chassis number, — manufacturers number.
STEP 5: Check Secured Party Group (SPG) z Review SPGs to see if there have been business changes like mergers, acquisitions, or divestments. A new SPG may be required. z If you have multiple SPGs, consider whether one consolidated SPG would be more efficient. 48
STEP 6: Review internal hire or lease agreements z Where applicable, update the internal Business Hire Agreement or Operating Lease. z Update the asset listing and ensure serial numbered assets are registered.
STEP 7: Check that registration details are correct z Review the accuracy of the checkboxes filled out during registration, including collateral type, class, and description. z Ensure you have responded to all the questions about whether proceeds are claimed and provided a description. Ensure proper completion of checkboxes for inventory, subject to control, subordinate and PMSI. z For serial numbered goods, check the serial number,
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
number type, vehicle registration number and descriptive text.
STEP 8: Renew expiring registrations z Registrations must be renewed prior to expiry. z Identify registrations set to expire in 2024 by checking their expiration dates. z Check that customer details are still valid. z Detect and rectify any anomalies that might invalidate a registration. z Consider whether transitional registrations are still required. z Allow registrations on closed accounts to expire.
STEP 9: Document your PPS policy z Develop a comprehensive policy governing registry management procedures so that your PPS procedures are consistent and not dependent
on the knowledge of just one team member. This should include: — new registrations — amendments — renewals — discharges — reporting — checking and housekeeping.
STEP 10: Review registrations against your business A clean register is important when raising finance or selling a business or certain assets. z Search the PPSR for registrations placed by other entities on your business. z Reach out to the secured party to clarify any uncertainties or discrepancies about specific registrations. z Request discharges for registrations that aren’t necessary or have no security interest.
Additional considerations for PPS Compliance Regularly revisiting and updating these checkpoints helps ensure accurate registrations and shields your business from potential risks. Remember, each business is unique, and not all items on this checklist may apply universally. Additional considerations may include whether you have a registrable security interest, the timing of registrations, the need to send verification statements, and your PPS strategy/policy. In case of a customer insolvency, vigilance with PPS registration and maintenance processes will protect your position as a secured creditor. It’s important to know your rights and act quickly. The insolvency practitioner is not there to just look after your interest. Their role is to look after all the business’s creditors. Seek professional advice from a PPSR expert when required.
*Malcolm Poslinsky MICM CCE PPSR Specialist, EDX Equifax T: 0401 991 917 E: malcolmp@edxppsr.com.au
ABOUT EDX For purpose-fit guidance and exceptional support in benefiting from the PPSR, contact our PPSR specialists at EDX by Equifax. We assist with everything from the advisory and initial set-up to bulk processing and ongoing registration management with alternate solutions for different business requirements. EDX is a subsidiary of Equifax established to help businesses take the complexity out of the PPSR. Our team comprises PPSR veterans with long-standing expertise in registering security interests, insolvency and credit management in Australia and New Zealand. Detect compliance issues with our Assurance Review and register your security interests seamlessly with our purpose-built software solution. Learn more at https://www.edxppsr. com.au/ Disclaimer: This article covers general matters. The PPS Act is complex. There may be circumstances where other considerations apply. We recommend obtaining advice and support from PPSR experts.
STEP 11: Extend coverage to New Zealand z Register on New Zealand’s PPSR when dealing with customers there. The NZ register is similar but not the same as the Australian PPSR.
STEP 12: Maintain system security z Manage access to your PPSR platform, safeguarding user access, SPG access codes and registration tokens to prevent unauthorised access and malicious activities. February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
49
Legal
Director Penalty Notices:
What do they mean for trade creditors By Allan Kawalsky MICM RITF* Since the end of the COVID-19 lockdowns, the Australian Taxation Office (ATO) has been progressively increasing enforcement activity for unpaid tax debts which has risen to quite alarming levels. The ATO’s enforcement tool of choice to recover unpaid PAYG, GST and SGC appears to be the director penalty notice (DPN). In this article we examine what a DPN is, what it means for a director who receives one and why trade creditors need to know about them.
Introduction Between the period from June 2019 to June 2023 tax debt to the ATO has increased by 89%, from $26.5 billion to $50.2 billion.1 $45 billion of this debt is owed by businesses, and a whopping $33 billion is owed by small businesses.2 It is no
Allan Kawalsky MICM RITF 50
wonder that the ATO sees this as an ‘unsustainable trend’ and are working on measures to address it. Of this $33 billion tax debt owed by small businesses, $23 billion is unpaid GST and PAYG withholding tax and $1.8 billion is unpaid SGC. A significant proportion of the total tax debt owed by companies in Australia is therefore tax debt which falls under the ambit of the DPN regime.
“It is reported that the ATO is issuing an average of 60 DPNs a day. Between 1 July 2022 and September 2023 the ATO issued over 24000 DPNs to over 18000 companies.3”
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
It is reported that the ATO is issuing an average of 60 DPNs a day. Between 1 July 2022 and September 2023 the ATO issued over 24000 DPNs to over 18000 companies.3
“Between the period from June 2019 to June 2023 tax debt to the ATO has increased by 89%, from $26.5 billion to $50.2 billion.1”
The Director’s obligation Company directors have an obligation to cause their companies to meet their own obligation to lodge and pay the following: z pay as you go (PAYG) withholding tax; z goods and services (GST) tax instalments; and z the superannuation guarantee charge (SGC). There is a day when these lodgements are first required to be lodged, called the initial day, and another day when the lodgements and
payments are due, called the due day. The initial day and due day vary depending on the tax. Importantly, the personal obligation on a director to cause the company to comply with its obligation to lodge and pay starts on the initial day. This is a personal responsibility which runs parallel to the company’s own responsibility. Directors continue to be under this personal obligation until the company takes one of four actions:
1. the relevant business activity statement, instalment activity statement or superannuation guarantee charge statement is lodged and the relevant amount is paid; 2. an administrator is appointed; 3. a small business restructuring practitioner is appointed; or 4. the company is wound up. Directors are liable to pay a penalty if, by the end of the due day, they are still under the obligation; i.e., if no action has been taken.
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
51
Legal
The Director’s Penalty Notice regime The legislative framework which governs the DPN regime is found in Division 269 of Schedule 1 to the Taxation Administration Act 1953 (Cth). Once a director is liable for a penalty, the ATO can then issue a DPN. 21 days after the date of the DPN, the ATO can then commence recovery proceedings against the director personally. There are two types of DPNs: non-lockdown DPNs and lockdown DPNs.
Non-lockdown DPNs A non-lockdown DPN is issued when a debt is unpaid, AND: z for PAYG withholding and GST, when the relevant statement has been lodged within 3 months of the due date; or z for SGC, when the SGC statement has been lodged within 1 month and 28 days after the end of the relevant quarter. The key is that the company must lodge the relevant statement within the timeframes specified. A non-lockdown DPN requires
that a director to take one of four actions to remit, i.e. cancel, the penalty. 1. Pay the debt; 2. Appoint an administrator; 3. Appoint a small business restructuring practitioner; or 4. Appoint a liquidator (i.e. wind the company up). Lockdown DPNs The key DPN for you to be aware of is the lockdown DPN. A non-lockdown DPN transforms into a lockdown DPN if the non-lockdown DPN is not complied with within 21 days.
“The director’s debt obligation will continue until it is paid. Effectively, this means that trade creditors will need to compete with the ATO in any actions for recovery from a director under a director’s personal guarantee.” 52
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
“The ATO will know well in advance if a company has not made its lodgements for an extended period of time ... Trade creditors will usually only become aware of a distressed customer when they are outside payment terms.” Alternatively, lockdown DPNs are issued from the outset if the relevant statements are not lodged within the timeframes stipulated above and they remain unpaid. The only way for a director to remit a lockdown DPN is to pay the penalty. If the director does not pay, the ATO can issue proceedings against the director to recover the debt.
Consequences for trade creditors A lockdown DPN effectively creates a personal guarantee on the part of the director for their company’s tax debts. The director’s debt obligation will continue until it is paid. Effectively, this means that trade creditors will need to compete with the ATO in any actions for recovery from a director under a director’s personal guarantee. The ATO has one significant advantage over a trade creditor in this regard. The ATO will know well in advance if a company has not made its lodgements for an extended period of time, indicating that it may not be able to pay its tax debts. Trade creditors will usually only become aware of a distressed customer when they are outside payment terms. We expect that companies with significant tax debt
may seek to trade out of it by purchasing more goods from their suppliers on credit. This may end up increasing their overall debt owed to the ATO and their trade credit suppliers. If a company pays its ATO debt when insolvent and subsequently enters liquidation, a liquidator may be entitled to claw this back from the ATO as an unfair preference. Keep in mind, however, that the ATO has an indemnity from the directors if this occurs and under section 588FGA(2) of the Corporations Act 2001 (Cth) can seek to recover any preference repayments made to liquidators from the company’s directors. The recent increasing use of DPNs is also likely to result in: 1. An increase in voluntary administrations, liquidations and small business restructurings; 2. An increase in personal debt owed to the ATO by directors of distressed companies; 3. An increase in bankruptcies as a result of (2) above; and
4. An increase in payment plans between distressed debtors and the ATO over DPN related debts. Given these consequences, the spike in ATO debt and the use of DPNs mentioned in this article, trade creditors should be vigilant about signs of ATO distress and ensure they have sufficient security from their customers and director guarantors for trade debts. The most effective security from guarantors is generally a charge over their real property which can be protected via a caveat, or a mortgage.
*Allan Kawalsky MICM RITF Partner at Turks E: Allan.Kawalsky@turkslegal.com.au www.turkslegal.com.au
FOOTNOTES: 1
Vivek Chaudhary, Deputy Commissioner (Lodge and Pay) Speech at Tax Institute 2023 Tax Summit, 7 September 2023.
2
Ibid.
3
Ibid
“... trade creditors should be vigilant about signs of ATO distress and ensure they have sufficient security from their customers and director guarantors for trade debts.” February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
53
DIVISION REPORT
member anniversaries We recognise those members who achieved membership anniversaries between October and December 2023. Congratulations to these members on achieving such important milestones. Name
Designation
Division
Company
Years
Retired
55
Raymond
Wright
LICM
VIC/TAS
Barrie
Mansom
MICM
SA
MC Chartered Accountants
55
Wayne
McPhail
MICM
QLD
Retired
50
Emile
Chidiac
MICM
NSW
Retired
45
Aivars
Bogdanovs
MICM
SA
Beyond Bank
35
Ralph
Ziccarello
MICM CCE
VIC/TAS
Amtrade International
30
Paul
Menara
MICM
VIC/TAS
Fantech Pty Ltd
30
Laurence
Torpy
MICM
WA/NT
Westrac Pty Ltd
30
Paul
Canavan
MICM CCE
VIC/TAS
Simplot Australia Pty Ltd
30
Cheryl
Morgan
MICM
WA/NT
Morgan Hiabs
25
Ian
Warner
MICM
NSW
Raj
Shanmugham
MICM
VIC/TAS
QBE Trade Credit
20
Sharon
McGrath
MICM
NSW
Epson Australia Pty Ltd
15
Prudence
Chang
MICM
VIC/TAS
NCI (Brokers) Pty Ltd
15
Pauline
Dey
MICM CCE
QLD
BDO
15
Amanda
Campbell
MICM CCE
SA
NCI (Brokers) Pty Ltd
15
Laura
Fuentes
MICM
VIC/TAS
A & L Windows Pty Ltd
10
Ross
Casey
MICM
VIC/TAS
Dahlsens Building Centres Pty Ltd
10
Justin
Watson
MICM
QLD
Credit Clear Pty Ltd
10
Craig
Jones
MICM
SA
NCI (Brokers) Pty Ltd
10
Susan
Craig
MICM
NSW
amaysim Australia
5
David
Catley
MICM
VIC/TAS
Invoice Money Pty Ltd
5
Archna
Rani
MICM
NSW
Rentokil Initial Pty Ltd
5
Cecilia
Nguyen
MICM
NSW
Rentokil Initial Pty Ltd
5
Julie
Rojas
MICM
NSW
Rentokil Initial Pty Ltd
5
Khushali
Patel
MICM
NSW
Rentokil Initial Pty Ltd
5
Lavanya
Dara
MICM
NSW
Rentokil Initial Pty Ltd
5
Melinda
Prouse
MICM
NSW
Rentokil Initial Pty Ltd
5
Patricia
Santa-Ana
MICM
NSW
Rentokil Initial Pty Ltd
5
Bradley
Baker
MICM
NSW
Rentokil Initial Pty Ltd
5
54
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
25
member anniversaries
Designation
Division
Company
DIVISION REPORT
Name
Years
Colin
Smith
MICM
NSW
Rentokil Initial Pty Ltd
5
Jarrod
Faunt
MICM
NSW
Equifax
5
John
Martin
MICM
NSW
Rentokil Initial Pty Ltd
5
Shirley
Ranger
MICM
VIC/TAS
Rentokil Initial Pty Ltd
5
Kerrie
Voigt
MICM
VIC/TAS
CollectAU Pty Ltd
5
Tracey
Wilkie
MICM
VIC/TAS
CollectAU Pty Ltd
5
Harriet
Yates
MICM
VIC/TAS
Treasury Wine Estates
5
Jacob
Maiore
MICM
QLD
Tutela Business Solutions
5
Barbara
Cestaro
MICM CCE
NSW
AON
5
Susan
Ross
MICM
NSW
Sydney Catholic Schools
5
Michael
Criss
MICM
NSW
Equifax
5
Elizabeth
Armstrong
MICM
VIC/TAS
Cummins South Pacific
5
David
Coyne
MICM
VIC/TAS
BRI Ferrier
5
Janine
Sebek
MICM
VIC/TAS
Cummins South Pacific
5
John
Ngu
MICM
VIC/TAS
Spicers Australia Pty Ltd
5
Rick
Setterfield
MICM CCE
VIC/TAS
Bluescope Steel Ltd
5
Julie
Palmer
MICM
WA/NT
AMCAP - Eagers Automotive
5
Brittany
Bowd
MICM
VIC/TAS
Carpet Court
5
Aijay
Lamela-Villasenor
MICM
NSW
Ecolab Pty Ltd
5
Gregory
Aroutunian
MICM
NSW
Ecolab Pty Limited
5
Bill
Simon
MICM CCE
QLD
Tradelink
5
Tegan
Turner
MICM
SA
EMT Legal
5
Daniella
Tanasic
MICM
WA/NT
Southern Steel WA Pty Ltd
5
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queensland
Winning Team: Jordan McNee MICM CCE (University of Queensland), Lachlan McKinnon MICM and Ashley Leslie MICM (Vincents), Stacey Woodward MICM CCE (President) and George Wolf MICM (CreditorWatch).
President’s Report Just like that, it’s 2024! Welcome back to all our members, I hope you all had a wonderful Christmas and New Year. Reflecting on the past few months, we’ve experienced remarkable events that have strengthened our community and showcased the outstanding achievements of our members. We started with our Barefoot Bowling Social Night sponsored by CreditorWatch in September and then we finished the year with our first Credit Nexus event, both offering opportunities for networking, professional insights and a bit of fun. Conference, what an event! I personally had a lot of fun in Adelaide, thank you to the amazing SA Council for hosting us all. A huge shout-out to Jordan McNee who has been crowned the 2023 National Young Credit Professional of the Year. I know how much effort went into his presentation to the judges and it’s a very well-deserved win, you’ve got a bright future ahead of you. We can also proudly say that Jordan is now an official team member on the QLD Council. Congrats to Emma Purcival for earning the prestigious title of CCE Dux in 2023! Your hard work and dedication have truly paid off. Well done! I also want to give a special shout-out to Kirsty Gray, MICM CCE our QLD Credit Professional of the Year finalist, who did an amazing job and has set 56
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Some of the skills on the green.
the bar for the award next year. And finally, to the incredible team at Tradelink, who were a runner up in ‘Credit Team of The Year Award.’ I’m thrilled to announce that the QLD Council have won our fourth consecutive title for the prestigious President’s Trophy at the National Conference in Adelaide. I couldn’t be prouder of this incredible team. It is such a joy to work with them throughout the year, bringing to life wonderful events year-round for our members here in the Sunshine State. The President’s Trophy is a symbol of recognition for our unwavering commitment to the credit industry, and it reflects our continued drive for excellence. Winning this award for the fourth time
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Bowlers heading out to play.
is a true reflection of our passion and dedication. Looking forward, we have our first event happening in February with our most popular social event, Trivia. We then have our Economic & Risk Seminar being held in April. Thank you to the board, national office, our partners, sponsors and most importantly our members for your year round support. Here’s to an amazing 2024!! – Stacey Woodward MICM CCE Queensland Division President
Justin Watson MICM (Credit Clear), George Wolf MICM and Nathaniel Smith (CreditorWatch).
Barefoot Bowling 22/9/23 – The Boo – Newstead Our September Social Night was held at The Boo in Newstead. The night started with a casual dinner of gourmet burgers and a couple of beverages and plenty of networking and catching up. It’s always a great night catching up with new and old friends in Queensland. The friendly competition and banter started on the green in teams of 4 in knock out rounds of Barefoot Bowls. There was not too much barefoot bowling going on that evening as it was slightly chilly with the wind coming through as spare
Madison Ryan MICM (Dynamic Supplies Group), Zandalee McKenzie MICM (Enyo Lawyers) and Emma Purcival MICM CCE (Elders). February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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queensland
George Wolf MICM (CreditorWatch) and Emma Purcival MICM CCE (Elders).
Time to refuel.
Council members.
jumpers and jackets were being handed around. We soon warmed up as we all worked on our skills and trying to keep our bowls in our own lane and get close to the Jack. We were sure that some of the bowls had been labelled incorrectly as they curved off in the wrong direction! Despite some crazy shots being taken and a few of the rules being bent a little, Jordan, Lachlan, Ashley and Stacey’s team came away victorious and were presented with their prizes by George Wolf from CreditorWatch. To finish the evening off we all participated in one bowl each, whoever got closest to the Jack was the winner. This turned into an interesting event of trying to hit other people’s bowls, how fast can you roll and in general who can get the bowl the furthest. It was all good fun and we had plenty of laughs. Another great event organised by the Qld 58
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Council. Look out for the details of our next Social Event early in 2024 to start the AICM calendar of events.
Qld Council Members Another amazing year for the Qld Council taking out the Presidents Trophy for the fourth year in a row. We are all very thankful to be a part of such an amazing team and look forward to what we can achieve in 2024 for Qld members.
Current Council Members z Stacey Woodward MICM CCE– President, WINC, Co-Awards z Steven Staatz MICM CCE – Director, Treasurer z Emma Purcival MICM CCE– Media z Melissa Kirk MICM – PD chair z Jordan McNee MICM CCE – Co-Awards, PD sub committee
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Council members celebrating another President’s Trophy win.
Credit Nexus: Engaged room of Credit Professionals.
Merv Mahony LICM CCE– Membership Ashleigh Mason MICM CCE – CCE Madi Ryan MICM – Events Chair Zandalee McKenzie MICM – Minutes and Events Sub Committee z Sam Goddard MICM – Events Sub Committee z Carly Rae-Orth MICM CCE – Minutes z Fiona Doherty MICM CCE – Council Member z z z z
Qld Credit Nexus Friday 24th November, Grant Thornton Office We finished off the year with our final Personal Development Session, our Credit Nexus event.
Cameron Crichton MICM from Grant Thornton and Jordan McNee MICM CCE from University of Queensland.
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queensland
Stacey Woodward MICM CCE our Qld President, Josh Panash from CreditorWatch, Steven Staatz MICM CCE from Vincents, Jordan McNee MICM CCE from University of Qld and Kirsty Gray MICM CCE from Stoddart Group.
Josh Panash from CreditorWatch, Fiona Reynolds MICM from Turks, Zandalee McKenzie MICM from Enyo Lawyers, Stacey Woodward MICM CCE from Covetrus, George Wolf MICM and Nathaniel Smith from CreditorWatch.
Kirsty Gray MICM CCE – Qld Credit Professional of the Year, Jordan McNee MICM CCE – 2023 National Young Credit Professional of the Year, Stacey Woodward MICM CCE – Qld President, Emma Purcival MICM CCE – CCE Dux 2023.
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A time to reflect on the year that was and share some insights into the challenges, successes, and expectations for the coming year by our panel of experts. The afternoon started with table networking and discussions on the challenging year of 2023. It’s great to hear so many credit professionals sharing their wealth of knowledge, experiences, and ideas. Our panel of experts was made up of Kirsty Gray, Credit
queensland
Team University of Queensland: Delia Human MICM, Nivani Sandanam MICM CCE, Decia Guttormsen MICM CCE and Jordan McNee MICM CCE.
Manager at Stoddart Group, Jordan McNee, Credit Services Team Leader at The University of Queensland, Steven Staatz, Director at Vincents and Joshua Mann, National Key Account Specialist at CreditorWatch. They all shared with us their view of 2023 from their area of specialty and kept the room engaged. There were plenty of questions asked especially on the topic of Small Business Reform and the action the ATO is taking post Covid. Congratulations to all the recertified and new CCE’s for 2023. It is great to see so many credit professionals becoming certified and recognised for their expansive credit knowledge.
Julie McNamara MICM CCE our National President and Ina Arama MICM CCE from Boom Logistics. February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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Emma Purcival MICM CCE, Ina Arama MICM CCE, Toni Sawyer LICM CCE, Julie McNamara MICM CCE, Simon Dawson MICM CCE and Fiona Doherty MICM CCE.
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queensland We had the pleasure of celebrating their successes and presenting their awards during the evening. To end the evening, we were treated to the spectacular city views from the Grant Thornton office and enjoyed networking and an assortment of delicious canapes and a selection of beverages.
View from Grant Thornton.
Member interview
enablement scores in my team is something I am extremely proud of.
Michelle Kirkby MICM Credit Manager Shell Energy
You have had a lot of involvement with YCP, why would you recommend the experience to our young credit professionals?
Current Role
YCP and WINC are two areas I feel very strongly about. Our younger people benefit so much from support, guidance, an ear to lean on and shared experiences. Opening up your network to the younger crowd can make a world of difference to the speed they develop. As a leader it is my responsibility to ensure that the younger people in the team are given opportunities to grow and develop. The YCP initiative has helped support and produce some stellar individuals and I have thoroughly enjoyed working with them all. I keep in touch with many and follow their journeys with absolute respect. If someone takes the brave step to stand up it should be celebrated. I will certainly miss my involvement in this space, but I will still be around if any of them need me.
I am currently the Credit Manager at SHELL Energy Australia for retail, B2B and B2C
How long have you been a member of the AICM? I have been a member of the AICM for around 5 years.
What is your biggest professional accomplishment to date? It would have to be stepping outside of my comfort zone and public speaking, be it around high performing teams in front of 100s of people at work, speaking at national conference and being the MC at events, particularly the Women in Credit Luncheons. Having a record breaking WINC event made me very proud. Getting comfortable being uncomfortable has been a standout for me and I loved having the opportunity. Having excellent engagement and 62
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What has been your biggest professional challenge to date? Gosh, there have been a few. I would have to say that one that tested my resilience more than anything was due to personal and professional challenges colliding. My husband was working
queensland
The Australian Institute of Credit Management welcomes our Partners for 2024
National Partners
How has being a Qld Council Member and Vice President assisted you in your credit career? Being a council member/VP has opened a robust and meaningful network of peers and experienced professionals. Being able to share experiences, ask questions and be supported is great. Having access to the magazine content along with the webinars is an invaluable piece of material and has helped me out no end over the years. It has also been a great platform to raise awareness and advocacy for areas of passion IE: YCP and WINC.
What are your favourite things to do outside of your profession? I put alot into my work and voluntary roles and I equally put in the same energy outside of work, I love cooking, wine matching, visiting wineries, entertaining friends, reading, spending time with my two Dashies, raising money for charity and when I am not doing those things I put my
Divisional Partners
Official Division Supporting Sponsors
Our National, Divisional and Professional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.
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on the Bushfire project in NSW, my Dad was in intensive care in the UK, the borders were closing then COVID hit. I relocated from Brisbane to NSW and lived in the middle of nowhere for a few months, knowing no one and at the same time navigating our customers, my team and risk. Businesses were forced to close down and we had to keep energy on. I recall taking calls (whilst my husband drove) on the journey down to NSW with the dogs in the car and what felt like half of my possessions not knowing when I would return. Navigating all of that was an experience I will never forget and it was dealt with well however I never want to go through that again.
energies into “rest harder” and enjoy walking, swimming, float tanks and practicing mindfulness. Work hard, play hard and rest harder is my outlook. It has been an absolute honour to have worked on Council this last 4 years and I am extremely grateful for the time and energy that people put into it. Being a part of the QLD Council who have gone from strength to strength year on year has been a truly remarkable journey. The QLD Council is a diverse, passionate, and focused group of people (lead by the dedicated Stacey Woodward) who put their members in the forefront of the decisioning. I will really miss being a part of it. After 4 years though it is time for me to step back and let someone else step up. I am quite looking forward to attending the events next year and sitting back as a participant. Thanks to Head Office for the support and all the other amazing Councils around the country you are all brilliant.
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south australia
Credit Nexus Panellists: Clare Venema MICM CCE, Janice Riley MICM, Scott McGrice MICM and Simon Lane.
President’s Report What exciting times ahead for SA! The SA council has been putting their heads together, thinking of exciting ideas for the division for 2024. Kicking off events for 2024 is the SA Twilight Croquet event on 22 February 2024 which looks to be a fun evening of croquet and connecting with our colleagues in credit. I would like to give a big thank you to Lisa Anderson from Coopers Brewery for her hard work in organising this event. Lisa has recently Cameron Henderson MICM - Oakbridge Lawyers - MC. re-joined council in the Events portfolio after a hiatus, and we are so happy and the rising cost of living means that navigating to have her onboard with her great ideas and financial difficulty for consumers is very topical at energy, and she has truly hit the ground running this time. in this role. I would also like to acknowledge two The SA division also had a great event in extremely important figures in SA’s credit space, November of last year with the Credit Nexus, Trevor Goodwin from NCI (former National held at Deloitte. I was extremely pleased to see President), and Gail Crowder from Credit Clear the engaging interactions between attendees (former Division Director). We were able to and panellists, specifically with respect to the celebrate their contribution to the AICM at the consumer credit space - noting that interest rates Credit Nexus, but it can’t be stated enough how 64
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Scott McGrice MICM - Deloitte - Panellist.
Clare Venema MICM CCE - Panellist.
Simon Lane - Lane Printing - Panellist.
Credit Nexus audience.
much I appreciate the passion and dedication that they have shown for the AICM. Looking forward into the new year, something that I would really like to focus on is highlighting the wonderful credit minds in this state. That being said, I would encourage you, or any of your colleagues/employees that come to mind, to participate in the fabulous award programs that the AICM has on offer, such as the Young Credit Professional of the Year and Credit Professional of the Year awards, as well as certifying/recertifying
for your Certified Credit Executive accreditation. Your council are here to support you, and we’d love to hear from you. Speaking of council, if you might be interested in joining council, I would encourage you to attend an upcoming council meeting. Not only do they provide an opportunity to engage with like-minded professionals, but they also provide you with a great opportunity to voice ideas for our fantastic division. I hope that you all had a relaxing and wellFebruary 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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south australia deserved break over Christmas, and look forward to catching up with you all at upcoming events.
SA’s Credit Nexus On 22 November 2023, the SA Division had its inaugural Credit Nexus event, which was kindly held by Deloitte at their lovely city office. Cameron Henderson from Oakbridge Lawyers MC’d the event, which kicked off with a Credit Forum, allowing attendees to reflect on the year that was, celebrate their professional successes, and discuss the challenges that they anticipate for 2024. Following this, Cameron led a panel discussion with Clare Venema from People’s Choice Credit Union, Janice Riley from Bridgestone, Simon Lane from Lane Printing, and Scott Rob Jackson MICM CCE receiving his CCE. McGrice from Deloitte. The panellists discussed various topics relating to their respective The Australian Institute of fields of expertise, including trends of financial Credit Management hardship in the consumer credit space, commercial welcomes our Partners for 2024 uncertainty, insolvency trends, and technological developments for collections. National Partners Attendees were then able to celebrate some of the division’s high achievers for 2023, such as Georgia Gray from Lynch Meyer Lawyers, who represented the SA Division wonderfully at the Young Credit Professional of the Year national competition, as well as Janice Riley, who took home the inaugural National Credit Professional of the Divisional Partners Year Award. We then celebrated the membership milestones of Alice Carter from Lynch Meyer Lawyers for 10 years of membership, and Lindsay Chuck, for his amazing 40 years of membership. SA also had their Certified Credit Executives to celebrate, including Lisa Anderson from Coopers Brewery who recertified, and Rob Jackson from Official Division Supporting Sponsors Beaumont Tiles who obtained his CCE last year. The SA council would like to give a big thank you to Deloitte for hosting the event, as well as Our National, Divisional and Professional Partners support and work with the AICM to promote the Institute’s activities, represent the attendees who were so engaging and asked some Credit Industry and develop the careers of all Credit Professionals. really thoughtful questions of the panellists. As these organisations support your Institute and your Industry please consider them when you require assistance. The event was a great way to wind up the year and to ask what’s next for credit. 66
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western australia | northern territory
DIVISION REPORT Cameron Miller MICM, Jeremy Coote MICM CCE, Cheri Bowater MICM CCE, Troy Mulder FICM CCE and Rowan McClarty FICM CCE.
President’s Report Greetings from the WA Council of the AICM! As we embark upon another exciting year, I hope this article finds you in good health and high spirits. It’s undeniable that the landscape of credit management is ever-evolving, and nowhere is this more evident than in our own backyard here in Western Australia. From the bustling urban centres to the remote regions, the challenges and opportunities facing credit professionals in our state are both diverse and dynamic. But fear not, dear members, for we are fully committed to supporting you through these turbulent waters. We’re not just here to weather the storm; we’re here to thrive in it! With that spirit in mind, I’m thrilled to share some exciting updates and plans for the year ahead. First and foremost, let me assure you that the council is working tirelessly to provide unparalleled value to our members. Whether you’re a seasoned veteran or just starting out in your credit career, we’re dedicated to offering resources,
education, and networking opportunities to help you excel. Speaking of opportunities, mark your calendars because we have an array of events planned throughout the year that are sure to inform, inspire, and entertain. From workshops and seminars to networking mixers and social gatherings, there’s something for everyone. Keep an eye on your inbox and our website for updates and announcements. Now, let’s talk shop. As credit professionals, we know that staying informed about the latest trends and issues is crucial to our success. And right now, there’s no shortage of hot topics in the West Australian market. From the impact of global economic shifts to local regulatory changes, navigating the credit landscape requires vigilance and adaptability. But amidst the challenges, there are also tremendous opportunities. As the world becomes increasingly interconnected, there’s never been a better time to leverage technology and innovation February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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western australia | northern territory members to delve into the latest trends, risks, and economic forecasts shaping the credit landscape in Western Australia. With industry experts and thought leaders sharing their insights, attendees can expect to gain valuable knowledge that will empower them in navigating the dynamic world of credit management.
May: Cheri Bowater MICM CCE.
to streamline processes and drive efficiency in credit management. Let’s embrace the change and position ourselves as leaders in our field. In closing, I want to extend my deepest gratitude to each and every one of you for your dedication to the profession and your support of the AICM. Together, we’re stronger, smarter, and more resilient. Here’s to a year filled with growth, learning, and success. Wishing you all the best, – Cheri Bowater MICM CCE
A Swing into Networking – Golf Day at Collier Park In May, members can swap spreadsheets for golf clubs at the “Golf Day” held at Collier Park in Como. This event is not just about perfecting your swing; it’s an excellent opportunity for credit professionals to network in a relaxed and enjoyable setting. Building connections on the green can lead to meaningful collaborations and partnerships, reinforcing the AICM’s commitment to fostering a strong and supportive credit community.
Divisional report: As the Australian Institute of Credit Management (AICM) continues to champion excellence and collaboration within the credit industry, the events lined up for 2024 promise to be both exciting and enriching. From insightful seminars to golfing extravaganzas, the AICM is set to host a variety of engaging events throughout the year. Let’s take a closer look at what awaits our esteemed members in 2024.
February: WA Risk and Economic Seminar Kicking off the year with intellectual vigor, the AICM is hosting the “WA Risk and Economic Seminar” at the Doubletree in Northbridge this February. This event will provide a platform for 68
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June: Empowering Women in Credit – Luncheon at QT Hotel Diversity and inclusion take centre stage in June with the “Women In Credit” luncheon at QT Hotel in Perth. This event provides a platform for recognising and celebrating the achievements of women in the credit industry. Attendees can expect inspirational talks, insightful discussions, and the chance to connect with like-minded professionals. The AICM believes in empowering all members, and this luncheon exemplifies our commitment to supporting women in credit.
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December: Wrapping up the Year – End of Year Credit Nexus
August: Recognising Excellence – YCP & Credit Professional Awards Night Come August, it’s time to roll out the red carpet for the “Young Credit Professional and Credit Professional Awards Night.” This gala event is a celebration of excellence within our credit community, recognising the outstanding contributions of both seasoned professionals and emerging talents. It’s an evening of glamour, acknowledgment, and a chance for members to come together and applaud each other’s successes.
Closing out the year on a high note, the AICM presents the “End of Year Credit Nexus” in December. This event is the perfect occasion for members to reflect on the year gone by, forge new connections, and set the stage for a successful year ahead. It’s a festive culmination of the AICM’s commitment to fostering a vibrant and supportive credit community. The AICM’s 2024 event calendar is a testament to our dedication to providing our members with valuable opportunities for learning, networking, and celebration. As we navigate the dynamic landscape of credit management, these events serve as pillars of support, uniting professionals and empowering them to thrive in their roles. Be sure to mark your calendars and join us for a year filled with growth, connection, and success.
The Australian Institute of Credit Management welcomes our Partners for 2024
National Partners October: AICM National Conference in Melbourne As the year progresses, the anticipation builds for the National Conference in October. The flagship event in the AICM calendar, the National Conference brings together credit professionals from across the country for a three-day immersion in industry trends, best practices, and networking opportunities. This year, we are excited to travel to Melbourne for the conference to be held at Pullman Melbourne on the Park. With its sophisticated ambiance, strategic location, luxurious accommodation and outstanding service, this hotel has consistently received positive reviews. Attendees can anticipate an event that seamlessly blends professionalism with a touch of Melbourne’s hospitality. It›s a not-to-be-missed event for those seeking to stay ahead of the curve in the everevolving world of credit management.
Divisional Partners
Official Division Supporting Sponsors
Our National, Divisional and Professional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.
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victoria | tasmania
Melbourne Credit Nexus Event.
Presidents Report Welcome to 2024! We hope you all had a restful break, enjoying time with family and friends. The end of the year is a good time to reflect, as we look back at 2023, the VIC/TAS council, along with National Office, worked swiftly and continuously and brought our VIC/TAS members a jam packed calendar of events. We were very excited to see you, and we hope to continue to see you in 2024. Thank you all for your continuous support. To continue providing our members with a great Robyn Erskine MICM CCE presenting at Vic Credit Nexus. experience in 2024, we have jam packed a lineup of events, professional Vic Credit Nexus Event development seminars and workshops. Keep a look Thursday the 30th of November was our final event out for our calendar of events on the AICM website. of the year, the Credit Nexus. The credit forum gave Our first event for 2024 will be held on 20th VIC/ everyone the opportunity to reflect and discuss the TAS Risk and Economic Seminar. I encourage below questions. you all to join this event. We have a great agenda z What challenges have you overcome this year? planned for the day. If you would like to register, z What wins/achievements are you most proud please jump on the AICM website, and register for of? the event. z How have your collections result performed? On behalf of the VIC/TAS council and myself, we z What are you preparing for next year? look forward to seeing you all at all our events. After we shared our experiences, we had the – Mary Petreski FICM CCE opportunity to hear from a panel of experts that VIC/TAS President spoke about insolvency, credit scores, consumer 70
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Thilanga Pitigala MICM, Robyn Erskine MICM CCE, Ivan Lim and Melissa Mann MICM.
Carole McTavish FICM CCE with Lou Caldararo LICM CCE.
Carla Morales MICM from recoveriescorp, Credit Team of the Year Finalist with Mary Petreski FICM CCE.
savings, collections strategy, AI, technology advancements, budgets and so much more. A big thank you to Robyn Erskine from Brooke Bird, Melissa Mann from Visy, Thilanga Pitigala from CEVO and Ivan Lim from AGL. Overall, the night was a huge success with everyone asking questions and walking away knowing that next year is going to be tougher. We are going to see more insolvencies, more zombie companies, consumers with less share of wallet and in the meantime, we are going to still try and perfect a working from home policy. This event equipped everyone in the room with
knowledge to adapt, improve and be more willing to question internal processes and budgets in 2024. A big congratulations to our new and recertified CCE members; z Amaran Navaratnam – Congratulations on recertification z Ruth Hamour – Congratulations on being a new CCE! We would like to say thank you to Chartered Accountants for hosting our amazing Credit Nexus event! – Michelle Carruthers MICM VIC/TAS Councillor February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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Lou Caldararo LICM CCE with Robyn Erskine MICM CCE.
Lou Caldararo LICM CCE with Amaran Navaratnam MICM CCE.
Member in Spotlight
What are some challenges you’ve faced during your time in credit?
Ruth Hamour MICM CCE Ruth Hamour is the National Credit Manager at Penrite Oil. We sat down with her to learn more about her career and experience in the credit industry:
How did you get into Credit? My journey into credit started about 15 years ago, I moved to Australia after finishing university, and have been at Penrite Oil for 8 years now. The company, being an Australian family business, has been a fantastic environment to work in. It values growth, a familial atmosphere, and has almost doubled in size during my time here! Originally with a background of Business and Administration, I started working in accounts receivable and gained a solid foundation in numbers. It wasn’t until I joined Penrite Oil that I transitioned into a more focused credit role. My first responsibilities involved dealing with consumers and prepay, gradually evolving into a broader credit role under the guidance of supportive managers. 72
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Managing a credit team with over 2000 direct accounts, while handling both retail and trade customers, presents unique challenges and joys. The challenges often revolve around finding the right balance between sales and credit. However, the supportive team and a focus on effective communication help navigate these challenges. During the COVID-19 pandemic we saw many people stuck at home and servicing their vehicles, so we actually had a lot of debtors in a good position. Only in the past year or so have we seen people struggle with inflation and the cost of living. It’s incredibly rewarding to see the team working together as a family, irrespective of titles, contributing to the company’s overall success. Technology is fundamental in our role. Automation has also been a game-changer, allowing us to streamline processes. As the company has grown, we’ve had to assess and adapt our systems and processes, especially as we have more and more allocations to perform! It’s about finding ways to make the credit process more efficient.
What have you enjoyed about being involved with the AICM? The webinars have been excellent, providing valuable insights even when I can’t attend them in
victoria | tasmania
person. The AICM toolbox sessions, where you get a chance to delve into specific topics in a small group, have been particularly helpful. I’ve also very much enjoyed all the WINC seminars and
DIVISION REPORT
Lou Caldararo LICM CCE with Ruth Hamour MICM CCE.
Rhys Buzza MICM CCE with Lou Caldararo LICM CCE.
The Australian Institute of Credit Management welcomes our Partners for 2024
events, I find them to be a fantastic opportunity to network and learn!
National Partners
What are some career highlights of yours? I’m particularly proud of the progress we have achieved in collaboration between sales and credit. Seeing that greater and greater levels of cohesion between other has been rewarding. It’s not just about numbers; it’s about fostering a culture of teamwork and mutual support!
Divisional Partners
What do you do when you’re not working? I’ve been married for 15 years, and we have two kids – a 14 year old daughter and a 12 year old son. Balancing work and family life has its challenges, especially with the demands of
Official Division Supporting Sponsors
a full-time credit role. Moving from Egypt to Australia was a significant cultural change, but the multicultural nature of Australia and the supportive community have made it feel like home. Weekends are family time for us. We catch up with friends, attend church on Sundays, and enjoy walks together. Travelling is a passion, and we make it a point to create lasting memories as a family. It’s all about cherishing those moments
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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new south wales
AICM Credit Nexis 2023 at the Equifax Office.
NSW Credit Nexis.
Presidents Report Happy New Year. Another year has passed, and the October 2023 conference seems so long ago. What a great conference, well done to Head Office and the SA team for putting together a very insightful and educational conference. We also had our first Credit Nexus which was held at the Equifax offices in North Sydney, a big thank you to Equifax for hosting the event. The panel of 4 professionals, Richard Gannon, Tony Pilimon, Chris Hadley and Tehani Legeay presented a great insight to what they are expecting and experiencing in collections, fraud and AI. We also recognised members who have 74
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contributed to the credit industry and presented Joe Laban with his elevation to a Life Member (LICM) and presented Emile Chidiac his 45 year anniversary certificate. NSW Divisional council has hit the ground running in 2024, with some exciting events coming up in NSW. This year, AICM has combined the Economic Breakfast and the Risk Seminar into one huge event with some special guests and insight into what to expect in 2024. We also have a few new members on council, who bring with them their knowledge and passion for credit. A big welcome to Leila Vanner, Andrew Tanna, Julie Hunt, Maria Grigoriadis, Pieter Le Roux and Georgia Barbera.
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NSW Council dinner.
We will soon be hosting another round of CCE examinations so if you don’t already have your accreditations, I encourage you to participate because it is a very valuable experience. Looking forward to seeing everyone at the Risk Seminar. Until next time “Be good”. What did the dollar say to the coin during an Andrew Tanna MICM, Christopher Hadley MICM from Holman Webb Lawyers with Andrew Spring MICM CCE and Aaron Smith from Jirsch Sutherland. argument? “You’re not making any ‘cents’.” – Sev Indrele MICM CCE NSW President
NSW AICM Credit Nexus The inaugural NSW AICM Credit Nexus event on 16 November was another success. Held at the new Equifax office in North Sydney, it lived up to the marketing as we all had the chance to connect, reflect and discuss what’s next. Delegates arrived in the afternoon to a beautiful new events room with views of
Joe Laban’s elevation to LICM Status, CCE; Julie Hunt MICM. February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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new south wales
Miral Sarvaiya MICM CCE, Gary Poslinsky MICM, Antony Pilimon MICM CCE and Sev Indrele MICM CCE.
Sydney Harbour. We enjoyed the drinks and snacks as we connected with fellow delegates. There was a structured credit forum arranged. Our NSW President Sev Indrele thanked the National Partners – Turks, Equifax, illion and CreditorWatch and then our NSW Divisional Partners, AMPAC, Esker and Onguard. The forum included table discussions and sharing insights with the room. Our NSW Councillor Andrew Tanna facilitated a panel discussion with Richard Gannon, Tony Pilimon, Chris Hadley and Tehani Legeay from Equifax as our panellists. John Banfield MICM from illion with Credit Professional of the Year National Finalist Pieter Le Roux MICM and AICM National President Julie McNamara MICM CCE. We recognised our members who have served the industry over the years which was a highlight to a Life Member. Those of us who know Joe of the event, especially the long-time member understand his huge contribution to the AICM awards. Emile Chidiac was presented with a and Credit Industry as a whole. It was well 45-year anniversary certificate. He explained deserved. how much value he placed on the institutes he The event continued with further canapes, is a member of, and we were humbled to have drinks and networking which capped off a great him attend. Joe Laban FICM CCE was elevated evening, hosted by Equifax. 76
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
new south wales
DIVISION REPORT
Julie Hunt MICM and Keith Deer MICM CCE.
Julie Hunt MICM, Dr Emile Chidiac MICM 45 years membership milestone and Nick Pilavidis FICM CCE.
AICM NSW Council dinner The AICM NSW Council enjoyed another year of hard work, with new and some past members joining our team event. Its important for the team to reconnect and strategise for the 2024 year. The team is energised and ready to go. Thanks again to Treacy Sheehan for arranging dinner at the beautiful Theatre Bar at The End of The Wharf. Nikola Razmovski’s elevation to FICM status, Dr Emile Chidiac’s MICM 45 years Membership milestone and Joe Laban’s Elevation to LICM Status.
Members in Focus Miral Sarvaiya MICM CCE Can you please confirm your current position and the company you work for? I am currently serving as a Relationship Manager at AMPAC.
Could you share some insights into your career journey? My career journey has been quite diverse. I’ve been involved in sales since the age of 18, starting with selling American Express credit cards at airports while pursuing my Masters in Business. I transitioned from working at the Sydney Cricket Ground bar to corporate sales in a software company, where I focused on pre-sales activities such as arranging leads and seminars. February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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new south wales Later, I ventured into selling data at a
How did you become involved in the AICM?
commodities research company, catering to
I’ve been involved with the AICM for eight years,
banks, mining companies, and the Reserve
starting during my time at Austral. The networking
Bank of Australia. I then moved to Thompson
opportunities and meeting like-minded
Reuters, selling cloud portals used by
professionals have been invaluable. The AICM
accountants.
events, particularly the WINC, have been a great
My credit journey began in 2013 when I joined
platform for learning and networking. I’ve attended
Austral Collections. It was a part of the QBE
every one of them, often bringing clients along for
insurance business. At Austral I was the Sales
an enjoyable experience.
Manager for NSW. Here I learnt all about debt collection and the credit world. After 4.5 years the
What advice would you offer to emerging credit
business closed, and I started at AMPAC.
professionals?
I’ve been with AMPAC for the past five years,
My advice is to dive in and learn. Networking is
which has become like family. My old Austral team
crucial so the AICM is an excellent platform for
came with me and working with the team here
connecting with industry professionals. Don’t
has been great. It’s a fantastic group of people who
underestimate the value of a strong network.
make this business great.
Secondly, find a good mentor who can guide
I enjoy the service based industry. It’s all about
you through the intricacies of the field. Having
people. Getting that right is crucial. Anyone with
someone like that has been instrumental in my
an overdue account can be your customer. I get to
own growth. I’ve been lucky to have Mark who has
meet with new faces and learn about interesting
taught me so much in the last 5 years. If you can
businesses.
find a good mentor, hold on to them!
What do you consider your most significant
Beyond your profession, what are your favourite
professional achievement to date?
activities or hobbies?
The move from QBE to AMPAC was a big story in
I keep quite busy. Most time is spent with my
itself.
two energetic boys. Outside of work, I do boxing
I spent 4.5 years at QBE when, unexpectedly,
training at the gym, I take part in a few running
they decided to shut down the business, on the
groups, and generally try to maintain an active
basis that Trade Credit debt collection work didn’t
lifestyle. Balancing physical and mental well-
align with their insurance business. Rather than
being is essential to keep up with the little ones.
attempting to sell it, they opted for a sudden
I also help with my sister’s skincare business.
closure, giving us only 60 days’ notice. Given our strong presence and successful operations, this decision came as a surprise.
Pieter Le Roux MICM
I reached out to Mark Logue, explaining the predicament. With numerous clients left in limbo,
Could you please confirm
there was a need for a solution. Mark presented
your current position and
an offer, inclusive of our team. We collectively
the company you work
made the move, ensuring seamless continuity for
for?
our clients. Anthony and I, along with two other
I am currently the Group
colleagues, formed a cohesive package deal. The
Manager Shared Services
decision was obvious, and since then, five years
at Coates, and I have
have passed. This period marked a pivotal and
been at Coates for almost
formative phase in my career.
7 years.
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CREDIT MANAGEMENT IN AUSTRALIA | February 2024
new south wales and career opportunities for staff and a better
I studied to become a lawyer in South Africa but
understanding by all of each team’s responsibilities,
the first professional role I got after completing
which in turn creates more empathy and
my degree was as a Credit Controller. This was for
co-operation between the structure.
NetTel Cellular, a mobile business. I felt a natural
I had the opportunity to introduce technology
flair for credit management – I was like a duck to
and automation, transforming the team’s
water. Businessmen who thought they could use
efficiency. For example, in Accounts Payable, the
their experience to outsmart me came up short
shift from manually processing 27,000 invoices
as my legal background equipped me to counter
per month to a streamlined process showcases
their challenges effectively. I invested in credit
the significant progress we’ve made. So much
training, eventually becoming a team leader in the
workload is reduced. Accounts Payable can focus
business and 4 years later became the Retail Credit
on things like assisting suppliers rather than just
Manager.
data capture.
After this I transitioned to Emergency Services
Its mind boggling to compare the tech that the
with ER 24, a private ambulance company. Later,
2024 team has helping them do their jobs today
I became a National Credit manager for Holcim,
compared to 2017.
a Swiss-owned company. There I met a man who would become my professional mentor. Dave King
Why do you believe the judges selected you for the
– CFO of Holcim
Credit Manager of the Year award?
In 2009 my family nd I took the big leap by
I think Credit Managers have fantastic skills
emigrating to Australia and my career took a
that are becoming recognised more broadly in
bit of a reset. I performed various credit roles in
the business community. I suspect the judges
companies like Tyco ADT, Onesteel, Kanji, and
appreciated my ability to transition into various
finally, Coates, where I started as the National
areas of transactional services beyond credit. This
Credit Manager in March 2017.
adaptability reflects the applicability of our Credit
At Coates, after 2 years, I took on the
skill sets in broader managerial roles.
responsibility of managing both Accounts Payable and Accounts Receivable, leading to the creation
How long have you been a member of the AICM?
of a shared services management role. Over time,
I have been a member of the AICM for over 10 years.
I also took on payroll responsibilities and currently hold the position of Group Manager for Shared
What has being a member of the AICM done for you?
Services.
The AICM provides me with a valuable network to consult when I have challenges. The connections
What do you consider your biggest professional
I have made within the AICM guide me towards
accomplishment to date?
optimal solutions and suppliers, enhancing my
Building the shared service structure at Coates and
professional credibility. It also allowed me to seek
introducing automation stands out as my biggest
advice and collaborate with peers, offering insights
accomplishment.
into problem-solving and industry challenges that
Managing Accounts Payable, Accounts
would have been challenging to navigate alone.
Receivable, and Payroll involves working with the
Without the AICM, Credit Managers would all be on
various subject matter details and engaging with
their own little islands.
subject matter experts (SMEs) to effectively lead the teams. In Coates, this encompasses a team that
How did you get involved in the NSW AICM Council?
today stands at 40 people. Having these functions
After receiving the 2023 Credit Manager of the Year
in one group fosters cross-functionality training
award, I was invited to join, and I gladly accepted. I February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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Can you share a bit about your career journey?
DIVISION REPORT
new south wales wanted to contribute by offering mentorship and
by backing it up by the hard work I mentioned.
assistance to younger professionals, helping them
Essentially walk the talk
navigate the industry effectively.
What are your favourite things to do outside of your What advice can you give to emerging credit
profession?
professionals?
I enjoy taking my motorbikes for a ride, as I’m a bit
This is something I’m passionate about. I find
of a petrol head. Spending time with my family,
younger credit professionals have such limited
including my wife and dogs, and engaging in
networks. They should diversify their skill sets and
activities like paddleboarding on the lagoon, allows
networks. They should know this, but I think it’s
me to experience and appreciate life beyond work.
often missed. While the traditional career path involves roles such as Credit Controller, Manager, and National Credit Manager, it’s crucial to apply those skills to other environments. My advice is: 1. Get qualified. A qualification such as a degree, certification, or diploma is the start of a
The Australian Institute of Credit Management welcomes our Partners for 2024
National Partners
resume. It tells the employer what you know about. This serves as the foundation for your resume, showcasing your knowledge and expertise. 2. Embrace hard work and work hard. Commit to working diligently, recognising the enduring value of hard work. Others will acknowledge and appreciate your efforts, contributing to your
Divisional Partners
professional reputation. 3. Build your brand. Promote yourself. It’s tricky to do. Be cautious about negative actions, as reputations take a lifetime to establish but can be
CREDIT MANAGEMENT SOFTWARE
quickly tarnished. Ask yourself the question – Does my Manager’s boss know who I am? If the answer is No – then you need to create more visibility
Official Division Supporting Sponsors
of who you are and what you can bring to the business (your brand). 4. Have a network. A robust professional network will expose you to diverse opportunities. It will assist you to deal with challenges in your current environment and ultimately add to your credibility as a Credit Professional 5. Develop soft skills. It’s completely underrated but essential. Learn effective communication and presentation skills, especially in group settings. The ability to convey ideas clearly is essential because if you have good idea and cannot convey it in a concise and relatable manner you will lose the room. Lose the room and your idea goes nowhere Once you’ve sold an idea, ensure you can deliver 80
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
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.
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
FNS51522
FNS40122
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 visit aicm.com.au
DIVISION REPORT
new members The Institute welcomes the following credit professionals who were recently admitted to membership between October and December. New South Wales
Elspeth Schirmer
Pantex Roofing Systems Pty Ltd
Renee Amor
illion
Cathy Sferratore
Ergon Energy Retail
Arian Bahmiyari
Holman Webb Lawyers
Patricia Tanuvasa
Shine Lawyers Pty Ltd
Kanwaljeet Kaur Bhamrah Americold
Marc Upperton
Mahnaz Bokan-Razi
Holman Webb Lawyers
Michelle Burakowski
Optus
South Australia
Wendy Collins
Transurban
Tiffany Allen
KeyInvest Ltd
Christopher Cornwell
Illion
Craig Brooke
KeyInvest Ltd
Safaa Darwich
Realty Assist
Julian Budden
KeyInvest Ltd
Mona Digregorio
Nepean Building & Infrastructure
Jason Cooke
Keystone Capital
Mitchell Donovan
illion
Sarah Crawley
Samuel Smith & Son
Paul Dubuisson-Perrine
Bryant & Bryant Chartered Accountants
Tom Dolman
illion
Vincent Dumas
Rexel
Kylie Fiebig
Viterra Operations Pty Ltd
Sean Goonan
Holcim
Jodie Hallion
Andersons Solicitors
Daniel Hensman
Boral Australia
Kathleen Lenton
National Credit Insurance
Hina Keshwani
Valvoline Australia
Sarah Lindsley
Grant Thornton Australia
Stephanie Liesure
Finstro
Elizabeth Mitchell
R.M. Williams Pty Ltd
Joycelyn Locano
Metcash
Megan Papadopoulos
Bendigo and Adelaide Bank
Milena Malev
illion
Jack Pillion
KeyInvest Ltd
Marita McCarthy
Credit Corp
Lynda-Sue Purvis
Brice Metals Australia Pty Ltd
Peter Miller
Rexel
Katrina Robson
Weber Stephen Products Co Australia
Peter Mooney
Holman Webb Lawyers
Bill Morakis
Holcim
Suganthini Sasikumar
Viterra Operations Pty Ltd
Andrew Negline
Spenda
Dion Silvy
KeyInvest Ltd
Justine Northcott
Equifax
Geoff Vogt
KeyInvest Ltd
Shanelle Ogden
Angle Finance
Tom Waltham
Keystone Capital
Jack O’Hagan
Finstro
Tapasya Patel
Americold
Victoria/Tasmania
Lachlan Perks
Keystone Capital
Lisa Andronescu
Tasco Petroleum
Tahlia Robinson-Barbara
Transurban
Lisa Arnfield
Brandt Tractor Ltd
Priya Sharma
Transurban
Nicholas Barclay
Transurban
Anne Thai
Coates
Marshall Clarke
RedZed Lending Solutions
Hiba Tleis
Transurban
Mitch Connors
Transurban
Philip Wallace
Holcim
Phillip Cooke
CollectAU
Janet Corcoran
RedZed Lending Solutions
Pty Ltd
Philip de Boers
Queensland
Richie De Oliveira
RedZed Lending Solutions
Taran Kaur
Transurban
Nicole Debrincat
New Era Cap Australia Pty Ltd
Janice King
Cement Australia
Adam Forster
Angle Finance
Brianna Krabbe
Stramit
Laura Gangemi
Brendan Long
Celtic Legal
Ebony Gilbert
Transurban
Tony Meredith
illion
Valentin Grosjean
mecwacare
Yalanda Peters
Ergon Energy Retail
Patricia Harte
Elantis Premium Funding Ltd
Barrett Hasseldine
illion
Jake Peters 82
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
new members Equifax
Lara Horobin
Choices Flooring Hobart
Vikrant Jindal
RedZed Lending Solutions
Tony Jones
RedZed Lending Solutions
Arvind Kale
Viva Energy Australia Pty Ltd
Jayne Kerford
RedZed Lending Solutions
Stephen Lawrence
Keystone Capital
Patricia Moles
Choices Flooring Hobart
Kate Moulton
illion
Saman Nadeem
Recoveries Corp
Nuwi Neunhella
Mecwacare
Kate Paton
illion
Peter Perla
Sumo Power
Lisa Peters
Citywide Service Solutions Pty Ltd
Ash Pillay
RedZed Lending Solutions
Eliana Polias
adidas
Maree Royal
Waste Services Group
Christine Sayers
GWA Group Ltd
Allaine Sta Monica
RedZed Lending Solutions
Christine Tsamasiros
Team Global Express
Jawad Usman
illion
Shipra Wadhwa
Transurban
Ashley Williams
RedZed Lending Solutions
Five reasons to become an AICM Member! 1 Industry news and insights Members continue to be informed of the latest news in credit, regulatory changes and receive insights to best practice from leaders in the industry.
2 Complimentary registration to our
webinar series
Members receive complimentary registration to our webinar series valued at over $300! The value from this member benefit alone covers the majority of your membership fee.
3 Discounts for all AICM activities
Receive a member discount for all AICM events and training courses. The more engaged you are with us, the more you’ll save and have your membership to thank for it.
Western Australia/Northern Territory
4 Access to resources
Ayushi Bhatt
Capricorn Society
Melanie Bluntish
Realty Assist
Nicole Cosoleto
Capricorn Society
Susan Howe
Fremantle Port Authority
Michelle Parker
Capricorn Society
Aiden Reilly
Spenda
5 Be part of our professional community
Fiona Stanley
Capricorn Society
Olivia Wilson
Realty Assist
Last but not least, join our growing professional credit community which has reached over 2800 members for the first time in the last 17 years! Interact with fellow credit professionals to build relationships and tap into credit management insights.
Overseas Alex Bursak
WTW
Balaji D
adidas
Vignesh M
adidas
Amit Narayan
Fletcher Building Limited
Viswanath Rajendran
adidas
Surendran Rajendran
adidas
Jagadeesh Selvam
adidas
Deborah Sowden
Wyndham Destinations Consumer Finance Asia Pacific/Travel and
DIVISION REPORT
Vivian Yuwei He
Being a member will provide access to resources that will assist in navigating the ever-changing business economic and regulatory environment. This includes articles, reports, webinars and our quarterly magazine.
BONUS: More value for teams! Do you manage or work within a team? AICM offer a group membership for organisations to enrol multiple employees as members at discounted rate.
To find out more about AICM Membership go to www.aicm.com.au
Leisure February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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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
AMPAC Debt Recovery
COLLECTIONS
COLLECTIONS AICM Divisional Partner
Divisional Supporting Sponsor
Commercial Credit Services
Level 5, 35 Clarence Street, Sydney NSW 2000 Tel: 1300 426 722 Email: info@4ampac.com.au Web: www.4ampac.com.au
National Collection Services
AMPAC Debt Recovery is a specialist debt collection practice supporting organisations around Australia and in over 180 countries worldwide. With decades of experience and global reach, AMPAC is a trusted partner to some of Australia’s highest profile private and public sector organisations. Call or email us to next time you are reviewing your debt recovery needs.
AMPAC Debt Recovery is a specialist debt collection practice supporting organisations around Australia and in over 180 countries worldwide. With decades of experience and global reach, AMPAC is a trusted partner to some of Australia’s highest profile private and public sector organisations. Call or email us to next time you are reviewing your debt recovery needs.
Divisional Supporting Sponsor
Divisional Supporting Sponsor
Tel: 1300 888 758 Email: info@natcollection.com.au Web: https://natcollection.com.au/
Tel: 02 9671 0400 Email: jamesvp@commercialcredit.com.au Web: www.commercialcredit.com.au/ Commercial Credit Services Group is a professional debt collection agency that provides debt recovery services across Australia and New Zealand, working closely with our clients to understand their needs and provide the best solutions tailored to suit.
COLLECTION SYSTEMS AICM Divisional Partner
Esker Australia Pty Ltd National Mercantile
ARMA Tel: 02 9154 7010 Email: info@armagroup.com.au Web: www.armagroup.com.au/ ARMA is a specialist provider of contingent debt recovery solutions, outsourced accounts receivables and litigation services. ARMA was started with the aim to have fewer customers and provide better service. We provide big agency expertise with a boutique service.
AICM Divisional Partner
Tel: 1300 096 407 Email: info@nationalmercantile.com.au Web: www.nationalmercantile.com.au National Mercantile are proud sponsors of the AICM. We have been providing quality debt recovery services for over 20 years. Our onshore team of professionals are highly experienced and are backed up by our in-house law firm. This means you’re in good hands when it comes to getting your debts paid! If you need any assistance managing your receivables portfolio, please reach out to see how we can tailor a strategy to meet your needs.
Divisional Supporting Sponsor
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 tools they deserve! Esker’s AR solutions help companies reduce cost for invoice delivery, accelerate 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.
Divisional Supporting Sponsor
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
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Spenda Tasmanian Collection Service Tel: 03 6213 5555 Email: connect@tascol.com.au Web: https://www.tascol.com.au/ With over 140 years’ experience, branches in Hobart, Launceston and Burnie and a database on the Tasmanian population that is second to none, there is no one better placed to handle your Tasmanian debts. Why not consider outsourcing to a local expert, you’ll be glad you did.
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
Tel: 1300 682 521 Email: info@spenda.co Web: https://spenda.co/ Spenda is an ASX listed company with over 20 years’ experience in delivering smart B2B software applications, flexible payment and lending solutions, and integration services that help improve the way businesses trade and get paid. Our solution enables businesses to transform with fast, error-free digital efficiency and aims to boost cash flow across the entire supply chain.
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 COLLECTION SYSTEMS
INFORMATION
INFORMATION
AICM Divisional Partner
AICM National Partner
CREDIT MANAGEMENT SOFTWARE
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.
Building Industry Credit Bureau Tel: 07 3852 1342, 1800 931 222 Email: bicb@bicb.com.au Web: https://bicb.com.au If your business supplies the building industry, we have industry-specific data that will raise your credit management decision-making effectiveness and perhaps prevent/minimise loss. We know you like to do your job well. Let us help you do it even better. For more info, call today.
AICM National Partner
CONSULTANCY AICM Divisional Partner
illion Tel: 13 23 33 Web: www.illion.com.au Renowned for our expertise in credit risk management, we pride ourselves in providing market leading products and services which securely store and analyse the unique data of millions of individuals and commercial entities. While we specialise in credit risk assessment and decisioning software solutions, we also provide a full suite of products that span the entire credit lifecycle. This includes lead generation and sales prospecting tools and receivables optimisation solutions.
Divisional Supporting Sponsor
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 DEMO of any of products.
DISTRIBUTION & PRINTING
AICM National Partner
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.
AICM Marketplace Lane Communications Tel: 08 8179 9900 Web: www.laneprint.com.au Lane are widely regarded as one of the largest and most technologically advanced print production and distribution companies in Australia. We are an industry leader in digital and offset print, point of sale signs, complex embellishments and print finishing, storage, kitting and mailing. With innovation at our core, our services extend beyond transactional mail and promotional print production to include SMS, bulk email communications, and electronic billing solutions. Lane are your partner in print and multi-channel communications.
Equifax 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
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
February 2024 | 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 INSOLVENCY
INSOLVENCY
Divisional Supporting Sponsor
LEGAL
AICM Divisional Partner
AICM Divisional Partner
Results Legal 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
Vincents Level 34 Santos Place, 32 Turbot Street Brisbane QLD 4000 Tel: 1300 VINCENTS (07) 3228 4000 Web: www.vincents.com.au Vincents is a firm of highly specialised experts delivering comprehensive insights into complex situations, enabling our clients to take control of decisions and get the best possible results. We cater for every business need where numbers are involved, including Insolvency & Reconstruction, Corporate Insolvency, Turnaround & Restructuring Solutions, Solvency & Investigative Reports, Informal Arrangements and Personal Insolvency.
Level 4, 183 North Quay Brisbane QLD 4000 Tel: 1300 757 534 Web: www.resultslegal.com.au Results Legal is a national firm with a focus on promoting and protecting the rights of trade creditors. Our clients are some of Australia’s largest trade credit companies who rely on our assistance for legal recovery, dispute resolution, preference claim defence and PPSA rights. Results Legal are the obvious first choice for companies seeking a national solution to resolve commercial disputes and pursue swift, successful and cost effective legal recovery action.
AICM Divisional Partner
LEGAL Divisional Supporting Sponsor Rothwell Lawyers Tel: (03) 9329 3500 Email: admin@rothlaw.com.au Web: www.rothlaw.com.au
Oracle Insolvency Services Tel: 1300 391 330 Email: info@oracleis.com.au Web: https://oracleis.com.au/ For those in financial difficulty we offer formal insolvency services, such as voluntary administration and bankruptcy alternatives, or devise turnaround strategies. For those that seek to recover value, we act as Liquidators, Trustees in Bankruptcy and Receivers of debtors. We maximise returns through our bespoke asset recovery strategies including, when needed, by pursuing litigation.
AICM Divisional Partner
Holman Webb Lawyers Tel: 02 9390 8000 Web: www.holmanwebb.com.au/ Email: christopher.hadley@holmanwebb.com.au Holman Webb is a commercial and insurance law firm with over 60 years’ experience and the scale to provide a top-tier level of legal services. We deliver unique insights and bring relevant, real world experience to you from our offices in Sydney, Melbourne, Brisbane and Adelaide.
At Rothwell Lawyers, we are a commercial team of solicitors and other legal support staff that are experts within our field. We pride ourselves on our ability to provide sound legal advice to individuals and businesses of all sizes, from sole directors and shareholder companies and large national corporations. Whether it is basic debt recovery, commercial law and litigation, insolvency advice to agreements and contracts, the team at Rothwell Lawyers can help you today.
AICM National Partner
AICM Divisional Partner
Turks Tel: 02 8257 5700 Web: www.turkslegal.com.au Contact: Daniel Turk
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.
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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.
CREDIT MANAGEMENT IN AUSTRALIA | February 2024
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 marketleading, 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.
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 RECRUITMENT Divisional Supporting Sponsor
Byron Thomas Recruitment Tel: 02 8677 3020 Email: info@byronthomas.com.au Web: www.byronthomas.com.au/ As Sydney’s leading Executive Accounting and Finance recruitment service, we offer access to our exclusive relationships, networks and database of over 80,000 Accounting and Finance Candidates. We are a privately-owned Australian company that have been operating for over 10 years. We work with a variety of public, private, family owned and private equity-backed companies.
TRADE CREDIT INSURANCE Divisional Supporting Sponsor
Aon Australia Tel: 02 9253 7000 Email: barbara.cestaro@aon.com Web: www.aon.com.au/australia/default.jsp
EMPOWERING WOMEN THROUGH EDUCATION
Aon is the world’s leading credit insurance broker providing innovative solutions against nonpayment risks, improving working capital and helping businesses to grow. Our deep experience across industries, investment in IT and network of credit specialists in 55 countries, provides us with the scale and expertise to deliver powerful solutions which enable businesses to identify and mitigate credit risks, sustain growth strategies with new and existing clients and optimise working capital and improve liquidity
National Supporting Sponsor
PROUDLY SPONSORED BY
Major Sponsor
Supporting Sponsors
THE 2024 WINC SERIES: Our 2024 Women in Credit (WINC) theme is ‘empowering women through education’ and continues to celebrate AICM’s actions towards a gender-equal future.
SAVE THE DATE: National Credit Insurance Brokers Tel: 1800 882 820 (freecall) Email: info@nci.com.au Web: www.nci.com.au National Credit Insurance Brokers (NCI) has established itself as the premier trade credit insurance broker in Australia, New Zealand, Singapore and Malaysia. Trade credit insurance is a highly specialised area of insurance and with its 35 years of experience, NCI has developed an unmatched depth of expertise in arranging the right protection at the best price for your particular trading needs.
National Webinar 1 - Wednesday 6 March 2024 Melbourne luncheon -Friday 3 May 2024 Sydney luncheon - Friday 17 May 2024 Adelaide luncheon - Friday 24 May 2024 Perth luncheon - Friday 14 June 2024 Hobart luncheon - Friday 21st June 2024 National webinar 2 - Wednesday 7 August 2024 Brisbane luncheon - Friday 23 August 2024 National webinar 3 - Wednesday 30 October 2024
AICM MARKETPLACE
February 2024 | CREDIT MANAGEMENT IN AUSTRALIA
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The Publication for Credit and Financial Professionals
IN AUSTRALIA
Level 3, Suite 303 1-9 Chandos Street St Leonards NSW 2065 PO Box 64 St Leonards NSW 1590 Tel: 1300 560 996 Fax: (02) 9906 5686 www.aicm.com.au