Credit Management in Australia - March 2017

Volume 24, No 3 March 2017

IN AUSTRALIA

The Publication for Credit and Financial Professionals

 Collect or sell your debt – a debt buyers perspective  ATO to report outstanding liabilities  PPSA claims another victim plus much more…

It’s 2017 and we’re

50!

Come join us in Canberra to learn and celebrate – SEE INSIDE FOR DETAILS

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Volume 24, Number 3 – March 2017

42 Message From the President

6

AICMQ

8

NSW Division: NSW 2016 Pinnacle Award recipients.

First AICMQ awarded to Coates Hire

Leadership and High Performance

10

Home hubs the future for credit teams Alexandra Cain

44

Credit Management

Qld Division: Lucinda Bell and Stacey Woodward.

13

Collect or sell

By Alan Harries

Lack of financial literacy in Australian households

16

By Amaran Navaratnam

A guide for credit managers – from the other side

19

Lessons from a national debt collection agency

By Roger Mendelson

46

Legal

SA Division: Sean Brady with Kay and Kevin Hollister.

22

Government announces ATO able to report taxation liabilities

By Robyn Erskine and Adrian Hunter

25

Electronic contracts – what’s new?

Part 2 – Subject to contract

By Peter Mills and Robert Gallagher

Guarantees in the age of electronic signatures: What credit managers should know

28

48

By Frank Gambera Vic/Tas Division: Jeff Hurst (Trade Bureaux Australia) Presents Toolbox 1 Fundamentals of Credit: Part 2 – The Credit Application.

PPS

30

PPSA claims another victim

By Oliver Shtein, Karen Wong, Gavin Stuart and Ben Hardy

13 Alan Harries

16 Amaran Navaratnam

28 Frank Gambera

52 WA/NT Division: Lisa Marr presents Rex Matthews with his 25 year service pin.

Insolvency Exercising your creditor rights to get the most from personal insolvency

32

By Paul Shaw

DIRECTORS Australian President – James Neate MICM CCE Australian VP, Finance – Gregg Odlum MICM CCE

Insolvent trading costs creditors over $1.3bn in 15/16

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AICM training news

35

Professional Development – Ben McCallum MICM YCPA & CCE – Trevor Goodwin MICM CCE Legal Affairs – Greg Young MICM CCE Member Services – Jeff Hurst FICM CCE CHIEF EXECUTIVE OFFICER

Economy

Nick Pilavidis MICM CCE 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 Email: nick@aicm.com.au

160 countries under the magnifying glass

EDITOR/PUBLISHER

Customer credit limits and risk categories

36

By Graham Crozier

Software

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Nick Pilavidis | Email: nick@aicm.com.au CONTRIBUTING EDITORS

2017 Conference Promotion

Colin Magee NSW Stacey Woodward Qld Gail Crowder SA Lisa Marr WA Donna Smith Vic/Tas

Around the States

ADVERTISING

South Australia

Andrew Le Marchant LICM CCE Phone Direct 02 8317 5052 or Mob 0418 250 504 Email: andrew@aicm.com.au

Victoria/Tasmania New Members

42 44 46 48 52 54

Credit Marketplace

56

New South Wales Queensland

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, 2017.

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Click Here EDITORIAL CONTRIBUTIONS SHOULD BE SENT TO: The Editor, Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065 or email: nick@aicm.com.au

41

Western Australia/Northern Territory

This issue we launch our new marketplace initiative Cover image courtesy of: www.steveparish-natureconnect.com.au

For advertising

opportunities in Credit Management In Australia

Contact: Andrew Le Marchant Ph: 1300 560 996 E: andrew@aicm.com.au

aicm

From the President

James Neate MICM CCE National President

2

017 is well underway with all

a protégé towards the AICM to see the

Divisions having launched their

broad range of training and career options

programs of activities with great

available simply by becoming involved.

success. This year is special

The Board has recently renewed

for the AICM as we celebrate the 50th

its commitment to the Certified Credit

anniversary of the formal incorporation

Executive award (CCE), as being the

in Canberra of the Australian Institute

ultimate recognition of a modern credit

of Credit Management and the 75th

professional. Now is the perfect opportunity

anniversary of the AICM’s predecessor

to reflect upon your own career and

organisation, the “Institute of Credit

understand that your skillset, standing and

Men”. There have of course been so many

leadership ought be recognised by your

changes since those early days and this

credit industry peers and importantly all

year will allow us the opportunity to

others in your work place, by you attaining

reflect on our proud history of educating

CCE status. It is commended to you and

and supporting our members to build their

with flexible essay and mini exam options, it

careers and to drive broader commercial

is not a daunting task.

change as the voice of Australia’s Credit professionals.

Across the year each Division will

Much work continues to build a very special and content rich National Conference to be held this year in Canberra,

recognise key players who have contributed

11th to 13th of October 2017. More details

to the Institute’s growth. It is also a good

will follow soon as the program is finalised

time to reflect on what a modern career

but people should start planning to ensure

in credit now involves. We are all aware

that all businesses recognise the absolute

that the pace of change is relentless and

necessity of having their teams completely

the technology and complexities that

up to date with all credit industry

face us on a daily basis, would have been

developments. The unrelenting pace of

unimaginable to our credit forbears, not

change dictates that extra effort is made to

that long ago.

keep ahead of the curve, to always be using

In keeping with this year’s theme of “Engagement”, I encourage members to

current best credit practices, systems and compliance.

reach out and reconnect with the AICM

Your National Board and all of the

if you are not currently actively involved.

Division Councils of volunteers welcome

The AICM has a proud tradition of our

your engagement in this anniversary year’s

members supporting and encouraging their

program of events and ideally having you

colleagues and teams. I encourage people

introduce a new colleague into the AICM

to recognise all the AICM can offer in terms

credit family. Bring them along and they will

of training, Young Credit Professional and

be made welcome!

National Credit Team of the year awards

Every best wish,

and to engage in these programs and

6

attend Division events. There is no more

– James Neate MICM CCE

powerful influence than a mentor prompting

National President

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

We’re

50 this year

Q

AICM Accreditation

First AICMQ awarded to Coates Hire

‘Congratulations to Coates Hire the 1st company to achieve AICMQ Accreditation from the Australian Institute of Credit Management awarded under licence from the Chartered Institute of Credit Management.’

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CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Q

T

he AICM and CICM Congratulate Grant Morris, National Credit Manager and the Accounts Receivable Team at Coates Hire Operations Pty Ltd as the first organisation to be awarded the AICMQ Quality Accreditation delivered under licence with the Chartered Institute of Credit Management, UK. Coates were chosen as the pilot candidate for the AICMQ based on their high engagement with the AICM and the Teams professional development including most of the team holding Certificate IV in Credit Management qualifications or higher,

10 Certified Credit Executives and team members regularly attending industry events, seminars and training.

“In addition to achieving industry leading results, interviews with Coates CEO Jeff Fraser and other executives confirmed that the Accounts Receivable Team is a valued and proactive business partner and a core part of the business,” said Nick Pilavidis AICM CEO. “We are thrilled to have all the training, development and management practices adopted at Coates Hire recognised as good

and best practice by the AICM and CICM. The training and practices have in no small way been developed from learning’s at AICM seminars, conferences and education courses combined with hard work and a desire for continual improvement.”

Grant Morris, National Credit Manager.

“We pride ourselves on the contribution of our Accounts Receivable Team to the health and growth of our business and are pleased to see them recognised with the first Quality Certification issued in Australia and in fact outside the UK by the AICM and CICM.” Jeff Fraser, CEO Coates Hire.

The awarding of the first ever AICMQ signals the completion of the implementation phase of the Quality Accreditation process in Australia.

“The support of Philip King, CICM CEO, and Chris Sanders CICMQ Head of Accreditation has been invaluable in getting to this point and we look forward to developing on this partnership between the CICM and AICMQ to further the credit management profession in the UK and Australia,” said Nick Pilavidis.

“We are very pleased that the Coates Hire credit management team have become the first organisation to gain AICMQ,” says Chris Sanders, FCICM, Head of Accreditation – CICMQ for the Chartered Institute of Credit Management, “an excellent result congratulations! Welcome to the CICM’s Best Practice Network!”

For more information on AICMQ please contact aicm@aicm.com.au

Q

‘Improving Standards in Credit Management’

CICM

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

9

Leadership and High Performance

Home hubs the future for credit teams

By Alexandra Cain* A more flexible working environment is a fait accompli for credit teams.

A combination of the increasingly multinational nature of the credit environment and a desire for a better work life balance means more credit departments are starting to offer staff the option to start early and finish early, or start late and finish late.

But enabling credit teams to work at home requires some planning given security and privacy challenges.

Firms need to be assured hackers entering the system through their staff member’s home computer could not compromise their customer’s sensitive personal data.

While this is a particular challenge for credit team to work through, it is unlikely to be an insurmountable one. Nevertheless, this is one of the main issues credit managers are confronting as they plan the credit teams of the future.

...it’s also important to be sensible about allowing staff to take time off to do personal tasks during work hours such as going to the dentist.

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Facing the future Melissa Mann, National Credit Manager at Visy Industries, explains how she approaches flexible working with one of her staff members with a young family.

“One of my staff members starts around 7.00am and is finished around 2.30pm. The employee benefits because she is available to pick up her kids from school, and Visy Industries benefits as well.”

Mann says cross-training staff to do other people’s roles for coverage enhances the customer experience as the covering staff are aware in advance of some of the nuances of the customer and their trading account to ensure continuity of customer service.

She adds that the business is discussing how it might be able to offer flexible working to other staff.

“The “best fit” arrangement needs to be viewed on a case-by-case basis.

We’re all looking for a better work/life balance and we all have commitments outside work. The priority is to ensure that the solution is a win-win for both the employee and the employer.”

Aside from this formal flexible arrangement, Mann says it’s also important to be sensible about allowing staff to take time off to do personal tasks during work hours such as going to the dentist. Her belief is that in turn this leads to reduced absenteeism and increased productivity.

However, allowing staff to work from home proves to be a little more

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Melissa Mann difficult. This is due to the associated licensing costs for VPN intranet, but incremental steps can be taken until a permanent solution is found. Visy recently switched its email from Outlook to Gmail so employees can access their email account remotely.

While her staff can’t access the business’s major financial systems or intranet from home, Mann, as part of the Visy Management team, is able to do this via VPN. Says Mann: “we are all working toward a situation where we can enable staff to work more flexibly.”

She believes advances in technology contribute to this.

“If we are going to be a progressive business in this space, these are the sorts of challenges we have to manage and work through because flexible working hours will be expected to a viable option in the nottoo-distant future,” she says.

Leadership and High Performance

differently to responsibility. Some will take advantage of more flexibility and become less productive,” he says.

The best way to manage this comes down to making sure you have the right people in your business and clear metrics to manage performance.

“If targets are not achieved then flexibility is tapered,” Morgan adds.

Peter Morgan

Gradual changes Peter Morgan, director, Byron Thomas Recruitment, says he has seen an increase in flexible working in credit teams in recent years.

“We work with a number of companies that do not have set start and finish times for their credit teams.

This is not quite Virgin’s, ‘unlimited leave’ model of flexibility that was introduced in 2014, but it is going in that direction. Businesses expect deliverables as opposed to employees spending hours at their desk,” he says.

Morgan explains some international organisations already run a roster system to incorporate international time zones into their working day.

This can be a win/win scenario for the company and the employee.

He says the most successful flexible teams have the right people to start with and are managed on deliverables such as process improvement, DSO and aged date.

Morgan notes offering flexible working creates a culture of responsibility and flexibility.

“If managed in the correct way with the correct people it can increase retention, engagement and results.

Employees require a work/life balance and if a company can support them, the employee is likely to be more engaged and productive.”

“But I have seen large credit teams go through teething issues if they offer too much flexibility to employees who are not ready for it.

This is because individuals respond

Tarnya Lowe

Taking stock According to Tarnya Lowe, general manager of accounting, banking and finance, Randstad, flat conditions in the financial services sector has prompted more businesses to use more novel approaches to staffing.

This is one reason why credit teams are looking into how to offer flexible working “In the last two years some areas in financial services have taken advantage of contract staff who require flexible working conditions.

These include people returning from parental leave,” she says.

Lowe agrees the home-hub model is yet to proliferate in any meaningful way in credit, but says it makes a lot of sense for businesses to be exploring how they could offer this.

“In this approach staff come into the business to do their initial training, but then work shift patterns that suit them. Employees are typically required onsite once a fortnight for team meetings and management link-ups.

This is attractive to a workforce that is unable to conform to a standard work office environment,” she adds.

According to Lowe businesses that do allow staff to work from home enjoy healthy retention rates, particularly in contact centres that typically have high turnover. “I see this as being the next model credit and collection teams could offer.”

Successfully offering flexible working is all about setting up staff members to succeed, which starts from the on-boarding process.

Says Lowe: “You need to set expectations and allow the staff member to take responsibility and accountability for their own work performance.”

Managers also need the right combination of ‘tech and touch’ to make flexible working succeed.

For instance, they require the right technology to monitor KPIs, call rates and productivity levels.

“Then you need regular link ups. It gives you that opportunity to talk to people so they don’t just feel they are just at the end of a phone, but that they are part of a bigger community,” Lowe adds.

Many credit team are already very used to offering flexible work options to staff, and all credit managers should have this as a watching brief as the modern workforce evolves.

Managing busy times Credit managers must structure their teams to ensure they are appropriately resourced for the busy periods.

“The majority of larger companies will tend to carry a little extra fat in their structure and have a few employees or contractors trained up in all areas so that if someone is away they can fill in. This is also a good option for businesses to manage the situation when employees require extended leave for any reason,” Morgan says.

*Alexandra Cain is a freelance finance journalist who has written for many leading Australian and international business publications.

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

11

The changing role of a credit manager

The of a

A credit manager has a lot on their plate. From managing business risk, suppliers and workflow, A credit ma to steering data assessment and staying across customer service, the constant juggling act of to steering d being on the front line of running a cost effective business can be a challenge. being on th And yet, many credit managers spend large chunks of time chasing outstanding debtors – a function that takes focus away from their other, more strategic, responsibilities.

Today’s credit manager is expected to have the digital and technological skills to dissect data, forecast and provide quality reporting to the organisation. This is against the backdrop of staying up to date with advancing technology and systems, legal and compliance requirements, financial management and supplier partnerships.

The pressure to relentlessly reduce expenditure also complicates the credit manager’s role and can often result in changes to headcount which makes the drive towards operational excellence difficult to achieve, while maintaining financial sustainability and growth.

Looking for specialist help With so much pressure to keep up and achieve financial targets, many businesses at some point consider getting help from a specialist provider with the technological solutions to assist their workflow, and manage resources and inbound activity. Looking outside your organisation for help can deliver a new level of expertise, consistent cash flows and precious time to focus efforts on more strategic challenges.

Transform your business We all know how time consuming and demanding the typically high volume accounts receivable functions can be, especially as team members constantly need to chase overdue payments.

And yet, ma a function th

Utilising specialist services to help manage this will Today’s credit improve your results, drive performance and grow digital and tec your business while reducing your delinquency rate. forecast and p organisation. T Technology can increase call contact, SMS and bulk up to date with letter/email communications, but it can also lead to legal and com better team management and free up your people management a to focus on servicing your customers and supporting The pressure t your businesses growth. complicates th result in chang towards opera Austral can help grow your business while maintain with confidence

Austral provides complete credit management services and works closely with our clients to Looking fo understand their business and provide the solutions With so much they require. Our experienced team work hard to deliver a consistently good experience and are alwaystargets, many looking for ways to improve processes to help ensurehelp from a sp your business has a continuous cash flow. So while solutions to as we work on helping your debtors stay in the black, and inbound a you can focus on what you do best and grow your for help can d cash flows and business with confidence. strategic chall

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Contact Cynthia Thomas – National Sales Manager, We all know h cynthia.thomas@australcollect.com or call the typically h 1300 422 665. can be, espec to chase overd

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CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Credit Management

debt

Overdue

Collect or sell

By Alan Harries*

Alan Harries

Business managers and owners are increasingly asking whether chasing up unpaid invoices might be best handled as a debt collection activity or better resolved by selling the uncollected debts off.

The term “collectors” is a descriptor which is widely misused within the media and by commentators outside of the debt collection industry and the business communities it serves. The misuse of the descriptor leads to confusion about who is being referred to and what services are actually being provided.

Most readers of this magazine

understand the work of collectors is not restricted to third-party specialist businesses but also describes activities undertaken to some extent within most businesses: from the GP’s wife working in the local surgery following up unpaid accounts through to the accounts receivables team in bigger businesses encouraging slower payers to pay outstanding invoices – this is all collections work.

Assuming you might wish to reach out for some assistance in collecting your debts or selling your debts, thirdparty collections businesses act for a range of clients involving government,

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

13

Credit Management

commercial, utilities and consumer debts and have three offerings of collection services: A. Contingent collections: Contingent collections is the mostly widely utilised form of debt collection activity in Australia and is when an original creditor refers debts to a debt collection business to collect on its behalf – collections are under a “principal and agent” agreement for an agreed fee (either as a percentage of the debts successfully recovered or as a flat fee per file or activity).

The debt is owned at all times by the original creditor.

Contingent collections generally are used as the first approach by many businesses when considering their broader debt collection strategies.

B. Debt purchase collections: Debt buyers are involved in purchasing charged off or nonperforming accounts being debts where the original creditor (typically banks, telecommunications providers and energy providers) has been unable to collect and where no further credit will be extended. The original creditor generally writes the debts off and assigns its rights to the debt buyer. This service is also referred to as purchase debt ledger collections, debt acquisition or portfolio collections.

Debts are typically sold by

creditors on a forward flow arrangement (assignment to a debt purchaser once a debt falls into arrears, generally after 180 days) or alternatively as a parcel where defaulted debts over a set period are bundled together and sold. Debt sales are generally managed directly by the creditor or alternatively through brokers/intermediaries acting for a creditor.

C. Business Process Outsourcing (BPO) BPO which is commonly used in the banking, finance, telecommunications and energy sectors is also sometimes referred to as outsourced or first party collections and involves all activity being undertaken in the name of the creditor to whom the debt is owed.

Mostly, the collector providing BPO services links directly into its client’s systems and closely follows the client’s policies and procedures – in many respects the service provided is very similar to a labour hire arrangement.

The essential functions of contingent debt collectors and debt purchasers are exactly the same – the only differences between them relate to the ownership of the debts. This ownership or control of the debts is important as it means the debt purchaser determines the practices it will adopt when managing the debts.

Consumer debts from banks, telcos and energy providers make up a significant portion of the accounts contingent collectors handle and as well accounts relating to healthcare, education, government and commercial recoveries are also referred for contingent collections.

Consumer debts predominantly are the ledgers sold in Australia and although commercial debts can be sold they are very much in the minority of sale transactions.

Debt sales work well with consumer debts owed to banks, telcos and energy providers due to the homogeneous nature of those accounts which are sold off by way of an assignment agreement in large tranches.

With such consumer debts there is consistency in the documentation of the terms and conditions of each account. The original creditors have systems and processes for setting up the credit originally, for receipting monies and for selling off debts at a specific age of delinquency.

This same rigour does not always exist for commercial debts where often there is less scale and more fluidity in the systems creditors adopt when documenting and controlling the creation of credit.

Further as commercial debts arise from the provision of goods and services there is opportunity for

The term “collectors” is a descriptor which is widely misused within the media and by commentators outside of the debt collection industry and the business communities it serves. The misuse of the descriptor leads to confusion about who is being referred to and what services are actually being provided.

14

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Credit Management

disagreement between the parties as to the quality or quantity of goods and/or services delivered and consequently a much higher risk of defended proceedings if legal action proves necessary to recover the outstanding account.

The requirements for a legal assignment or “assignment absolute” in respect to a debt sale can be summarised as: zz There must be an assignment instrument in writing, signed by the assignor zz The assignment must be an assignment absolute of the debt, not an equitable or conditional assignment zz Although there is no particular form of assignment agreement, it must sufficiently indicate an intention on the part of the party entitled to receive the debt (the assignor) to immediately transfer title in and to the debt and the chose in action (the right of action to sue for recovery of the debt) zz There must be an express notice of assignment (NOA) in writing and also under the hand of the assignor sent to the debtor (an implied or constructive notice is not sufficient) The NOA is intended to inform the debtor with certainty the entity in whom the legal right to recover the outstanding debt is now vested.

A debt assignment must be an absolute assignment to provide the debtor with certainty that when repaying the outstanding balance to the debt purchaser, a valid discharge will be obtained without having to seek recourse with the debt seller (i.e. the original creditor). An absolute assignment also protects the name and brand reputation of the debt seller in the event legal action is taken to recover an outstanding balance as the debt purchaser will take such legal proceedings in its own name.

The essential functions of contingent debt collectors and debt purchasers are exactly the same – the only differences between them relate to the ownership of the debts.

At Australian Collectors & Debt Buyers Association we often receive calls from businesses looking to sell off their debts. More often than not, each caller has only one or no more than a handful of accounts and the history for non-payment varies but often includes disputes about the service or product provided or else are accounts where judgment is held but enforcement of the debt for recovery purposes has proven elusive.

The price paid for the accounts purchased from original creditors fluctuates and takes into account such factors as: zz The age of the individual accounts zz The face value of the individual accounts zz The quality of the account documentation (terms and conditions) zz The extent of attempted collections by third party collection agencies zz Whether the whereabouts of the debtors of each of the accounts are confirmed zz In commercial debts the history of complaints about the goods and services provided The debt purchaser acquires the ledger of accounts at a discount.

The purchaser needs to locate each debtor and to then engage effectively to achieve a commitment to repay the delinquent account and even where legal recovery action is not required, may need to have the account in progress for an extended period to

achieve full recovery. The relocation of missing debtors is also a high risk for the debt purchaser – with 30% to 35% of debtors in consumer debts never relocated. Delays and risks to the recovery process are elevated too, if legal action is required.

If handling commercial debts, selling your debts might not be the easy option you imagine and instead recovery by way of the use of a contingent collections firm might still present the most cost efficient and accessible option for you.

Finally, remember that although contact from a debt collector is unlikely to ever feature on a consumer’s list of favourite things, the actual process of debt collection is both legitimate and necessary to assist businesses to recover monies owed to them. On a more macro level, debt collection processes help to keep the balance in a credit-based economy and ultimately play a crucial and important part in maintaining access to credit for consumers.

*Alan Harries is the CEO of Australian Collectors & Debt Buyers Association and can be reached at akh@acdba.com

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

15

Credit Management

Lack of financial literacy in Australian households

By Amaran Navaratnam MICM CCE*

Amaran Navaratnam

16

Debt. In simple terms, borrowing a principal amount and the repayment is a matter of principle! Contractually and ethically.

Many Australian households lack the necessary financial knowledge needed to stay out of debt, or simply staying on top of their contractual repayments, leaving them over committed and heavily relying on unsecured credit facilities such as credit cards and personal loans.

The Australian Securities and Investment Commission (ASIC) debt clock reports show that there is a total of $32 billion dollars owing on

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

credit cards alone in Australia within the demographic age of 35-54 having three or more credit cards. According to finder.com.au June 2016 survey, 70.19% of Australian adults own a credit card and 50.4% of Australian households are using credit cards for household bills.

The current issue within Australian households is the lack of financial literacy when it comes to our credit and debt appetite, for some individuals when they encounter any form of hardship they will follow the appropriate steps in resolving the issue, but some may take longer to face the debt due to ego and

Credit Management

circumstances, this ultimately resulting to a credit default listing against their name.

When we begin to face a considerable amount of debt and are unable to make repayments some households tend to ‘bury their heads in the sand’ and turn to tv, internet and radio advertisements for debt assistance without understanding the consequences of Part IX debt agreement or any form of the Bankruptcy Act as the right words are being used in promoting debt assistance and are deemed psychologically comforting.

Financial Hardship I see financial hardship as the expected, yet, unexpected knock on the door. The knock on the door can be from any one of these visitors,

commonly referred to as “hardship triggers” such as divorce, loss of income, natural disasters, mental and physical illness.

When one or more of these unexpected ‘visitors’ come to visit, you can never predict if it is a short or long-term stay. During the period of financial hardship household preference payments are focused on mortgage or rent, followed with other bills to keep the house in order and food on the table to simply survive.

What happens to the unsecured product repayments during a period of financial hardship? They get pushed to the bottom of the ‘household preference payment list’ and left to attend at a later date, but it may be too late as a credit listing may have already occurred.

Credit and collection officers can agree that the smaller debts that households tend to consider curable at a later date can be ‘the ice-berg that sinks the ship’ of having a good credit rating score.

By catching financial hardship early and taking the necessary steps to rectify the debt within its early debt cycle reduces the risk of default, writ, judgment, or leading towards any form of bankruptcy.

Lack of financial literacy The ethical solution to when a household enters into hardship is to contact the creditor(s) to discuss an alternative repayment or, enter into a hardship arrangement. But are the average households following the correct processes or simply ‘burying their heads in the sand’?

The ASIC debt clock reports show that there is a total of $32 billion dollars owing on credit cards alone in Australia within the demographic age of 35-54 having three or more credit cards.

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March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

17

Credit Management

Having worked within the credit and risk industry for close to six years I can confidently state that “how one handles financial hardship mentally and emotionally can determine its severity and their propensity to pay any given creditor.”

Having worked within the credit and risk industry for close to six years I can confidently state that “how one handles their financial hardship can determine its severity and their propensity to pay any given creditor.”

Households need to be smarter in managing their delinquency and overall debt management through education and awareness and it needs to begin now!

It is quite common for credit and collection officers to receive a call from a customer advising that they are in the process of applying for a Part IX or Part X debt agreement and wish not to be contacted, and when the officers advise the customer of the short and long term consequences officers will tend to hear “oh no, I didn’t know that” which steers the conversation from entering into a debt agreement to now a mutually agreeable payment without government intervention.

Everything proceeds through an educational conversation with the customer.

What concerns me the most about debt agreements is how it is currently being promoted to the households of Australia as a ‘get out of debt’ strategy with the promotion of stress free living without being appropriately educated with its consequences.

Any form of bankruptcy application should not be promoted as the first option!

Sometimes all it takes is regular communication and working in collaboration with your credit lender to resolve or meet a suitable positive outcome for both.

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Financial literacy within households Households in Australia now and in the future need to be smarter in managing their delinquency in particular with their unsecured facilities such as credit cards and loans and be educated on basic credit laws, principles and hardship processes.

There has been a rapid increase in the number of brokers selling debt agreements to financially stressed and vulnerable households where the brokers are either charging a fee to the debtor or are paid a fee by the debt agreement administrator for the referral.

Credit managers are continuously reviewing and improving their hardship processes and improving their early intervention strategies by offering a highly-experienced customer service to the point of perfection, but there is always going to be the ‘critical gap’ where customers are lured by debt assistance promotions and the only way to intervene

during this critical gap is through the appropriate credit and debt education and awareness.

The Wesley Mission in a recent article is calling on the Government to provide Australians with better financial education, in the hope that it could help people avoid falling into financial crisis.

From a young credit professional perspective there needs to be a push to all households and provide credit and debt education and awareness material starting from schools to households currently experiencing hardship.

Basic education and awareness will in fact rehabilitate our economy as an end result as households will become smarter in the way they manage their credit and debt enabling businesses to lend more rather than reject applications due to bad credit listings.

*Amaran Navaratnam MICM CCE is the Young Credit Professional Chairman (Vic/Tas).

Vic/Tas 2014 YCP Finalist and recipient of the 2014 Tony Mammone Award.

What concerns me the most about debt agreements is how it is currently being promoted to the households ... as a ‘get out of debt’ strategy with the promotion of stress free living without being appropriately educated with its consequences.

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Credit Management

A guide for credit managers – from the other side Lessons from a national debt collection agency

By Roger Mendelson*

If a group of fisherman regularly fish at a pond, the best judge of their fishing techniques and effectiveness would be the canny fish which have managed to survive.

They would learn the techniques of each of the fisherman and would be able to assess them.

In the same vein, a debt collection agency which has worked with literally thousands of credit managers over a 40 year period, is in an excellent position to assess the techniques which work and those which don’t.

The brief article provides practical feedback to credit managers (‘CM’), based on Prushka’s 40 year history.

Get good data So many CMs are hampered by the fact that good customer data is not obtained and is not easily accessible, in the first place.

This is more than simply an IT problem. The role of the CM is to ensure that information, defined by him, is obtained, at the time credit is

Roger Mendelson

granted. At the minimum, you require a full name and preferably date of birth. For businesses, always obtain an ABN. In our high tech era, obtaining mobile numbers and email addresses is crucial.

Use of technology Australian businesses above a certain size have embraced technology and this has clearly led to far greater efficiency and reduction in wage costs.

However, many platforms are clunky to use and seem almost designed to frustrate the users.

There is no excuse for this. Keep testing and refining your payment gateways and debtor follow-ups to keep them as simple as possible.

At least one phone call Don’t be 100% reliant on technology.

Many customers have become adept at finding ways around the various systems. Accordingly, there

In our high tech era, obtaining mobile numbers and email addresses is crucial

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

19

Credit Management

must always be a role within your collections system for at least one outbound phone call to your debtors and also, a willingness to set up installment arrangements.

Trading terms There is no excuse for any business to not incorporate basic trading terms in their contract with their customers.

With technology as it now is, it is a simple matter to incorporate properly prepared trading terms and to require a customer to “read and accept” before they are accepted as a customer.

A crucial trading term to incorporate is that the customer will become liable for all collection costs in the event of the account being in default.

Whilst there are some restrictions in consumer legislation on “debt

20

collectors” claiming collection costs on consumer debts, there is no restriction on the supplier incorporating such clauses in their trading terms. The clause must be properly drafted to provide that in the event of default, the additional costs are added to and form part of the debt itself.

Outsource early The days of sending out statements have largely come to an end.

Your internal collection process must provide for follow up actions to occur through tight time frames, so that the account is outsourced in, preferably, no more than 60 days from payment date.

Split the ledger This is a no brainer. A good CM will split the ledger into two equal

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

tranches or, if it is very large, into three tranches. The tranches must be equal in all respects, so that they can be compared on an apples for apples basis.

Refer the different tranches to collection agencies, which must be acting on exactly the same terms and provided with the same support.

This way, you will introduce competition between the agencies and will have an inbuilt quality control system, in that you can compare results, together with levels of complaint etc.

The results should be openly compared between the agencies and if there is a significant gap between the two (as is often the case), the poorer performer should be mentored and encouraged to lift its performance. If the gap continues, this is a sign to the CM

Credit Management

to scrap that agency and replace it with another.

The written-off accounts for each tranche, after a predetermined period, should then be assigned to the other agency, to work them as tier 2 accounts, at a significantly higher commission rate.

The test of an agency should not be the commission rate charged but the “net recovery achieved”.

I see this mistake being made all the time and yet if the CM is to achieve the best results possible, this is the measure he should use.

Loyalty Look at net recoveries Appointing an agency because it offers the lowest commission rate is invariably a mistake. Debt collection is a skillful, high resource, labor intensive service. In order for an agency to remain viable and to carry out a high level service, it cannot afford to reduce rates below a certain level.

Accordingly, the agency which gets the business will usually do so by cutting corners.

Highly successful businesses are known to be loyal to their suppliers.

The best example is MacDonald’s.

It does not put supply contracts out to tender and go for the lowest price. Good and reliable suppliers are rewarded with ongoing orders and they know that if they fail to deliver, their supply arrangement will be at risk.

For this reason, I believe that a good CM will develop excellent

working relationships with the agencies he uses and will work collegially with them in order to lift the ultimate net recovery rate.

Summary The steps outlined above are simple to implement, involve almost no cost and are absolutely proven. Follow them and you will be delighted with the results. *Roger Mendelson is CEO of Prushka Fast Debt Recovery Pty Ltd and is Principal of Mendelsons National Debt Collection Lawyers Pty Ltd. Prushka acts for in excess of 54,000 small to medium size businesses across Australia and operates on the basis of NO RECOVERY – NO CHARGE. www.prushka. com.au. Free call 1800 641 617. The writer is also author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival, both published by New Holland Publishers.

Everything for the credit professional Gain access to a network of credit professionals & resources for free.

REGISTER FOR FREE at www.creditnetwork.com.au Sponsored by

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

21

Legal

Government announces ATO able to report taxation liabilities A Christmas present for the credit profession

By Robyn Erskine and Adrian Hunter*

Robyn Erskine

Adrian Hunter

22

In the days leading up to Christmas as part of its Mid-Year Economic and Fiscal Outlook (MYEFO) the Government quietly announced that from 1 July 2017 the ATO will be able to disclose to Credit Reporting Bureaus (CRBs) the names of certain taxpayers who have unpaid taxation liabilities. This is a huge win for the Credit Profession who have argued for many years that this type of information should be publically available given the significant impact unpaid tax debts have on the assessment of a customer’s ultimate credit risk.

Countless credit professionals have voiced their frustrations in liquidation creditor meetings about being unaware of the true financial position of the company due to the undisclosed and in many cases not insignificant debts owed by the company to the Australian Taxation Office (‘ATO’). Many of these credit professionals would never have extended credit had they known the true position of the customer.

Despite having undertaken all possible searches and gathered all information available to them to conduct their assessment whether a customer was credit worthy or not, the lack of transparency surrounding a customer’s taxation affairs meant many credit professionals found themselves in the unenviable position of having recently extended credit, to then have to explain to management why

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

the debt was now unrecoverable due to the company’s liquidation.

Fortunately those days may soon be in the past due to the Government’s pre-Christmas announcement. From 1 July 2017 the ATO will be able to tell Credit Rating Bureaus (‘CRBs’) about businesses that have not “effectively engaged” with the ATO about their tax debts.

The ability to report these nonengaging businesses will initially be limited to those with ABNs who have tax debts of over $10,000 which have been outstanding for at least 90 days. This appears to be a fairly low threshold. What is unclear at this stage is what notifications the ATO is required to give, if any, to the taxpayer before it reports them to the CRBs and how quickly the ATO will adopt this new reporting regime.

The AICM is currently liaising with the Government and the various Credit Reporting Bureaus on the logistics on how this new initiative will be rolled out.

Increasing tax debt – enough is enough It appears that the ATO has had enough of being the unofficial financier of many businesses. Since the GFC in 2008 the debt owing to the ATO particularly in the Small to Medium Entity (SME) sector has been steadily increasing. For many in the credit industry this comes as no surprise as most credit professionals know too well the tight market and

Legal

the struggle many SME businesses face on a daily basis.

The ATO’s 2016 Annual report disclosed that the ATO has collectable debt outstanding to it of $19.2bn. Collectable debt has been steadily increasing over the years. In 2010/11 collectable debt was $14bn. Collectable debt is defined as debt that is not subject to objection or appeal or to some form of insolvency administration.

Further, while collectable debt has been on the increase, the funds estimated to be received by way of taxation collections has failed to reach initial forecasts since the GFC and each year has had to be revised down. If these trends were applied to any other business, e.g. inability to meet collection targets and a building debtors book, one would be very concerned. These trends goes a long way to understanding the rationale that has driven this recent announcement.

When you drill down further into the 2016 ATO results small business makes up $12.5bn of the collectable debt. Of note is that in FY16, the ATO entered into more than

950,000 repayment arrangements.

The number of arrangements was 17.2% higher than for FY15. This in itself indicates a significant uplift in businesses being unable to pay their debts as they fall due.

The Government hopes that by taxpayers being aware of the ATO’s ability to report them for nonpayment, it will result in businesses paying their taxation debts in a timelier manner to avoid affecting their credit rating.

What will these new initiatives mean for the credit industry?

It will mean that credit professionals should review all of their major customers once this information starts to be released by the ATO to the CRB’s. It cannot be assumed because the customer has always paid on time and is within credit terms that its tax affairs are in order. As experienced insolvency practitioners, we know for a fact that in most insolvencies the ATO is if not the largest creditor at least one of the largest creditors, with the trade creditors and the banks being relatively modest in comparison.

Often the company has exhibited

no signs of impending insolvency before sliding into liquidation or administration as they have been within terms with their suppliers and have not been in default with their bank. They however been amassing and for some over a number of years, a significant taxation debt which ultimately leads to their failure. For this reason a review of all major customers should be undertaken to ensure the credit risk assessment previously in place is still relevant.

This re-assessment could lead to a number of suppliers reconsidering a customer’s terms of trade or deciding to cease supply. The ATO understand this could lead to some businesses failing as obviously if supply is limited or cut off a company will not be able to continue. The ATO have for some time been publicly saying it is not their intention to force businesses into liquidation however businesses that do not pay their taxes either intentionally or simply because they are not viable, are making it harder for businesses who do pay their taxes.

They see the businesses who do not pay their taxes as having an unfair advantage. For the ATO this is not only about collecting taxes which is vitally important for our country’s financial wellbeing, but also creates a level playing field for complying businesses. For this reason alone the pre-Christmas announcement should be applauded.

The release of this information by the ATO is a real game changer.

Will it see a spike in the number of insolvencies particularly in the SME sector? Well only time will tell. For the seasoned credit professional however the release of this information is another tool to add to the credit manager’s tool box and in the words of one former Prime Minister a time to be “alert but not alarmed”. *Both Robyn Erskine and Adrian Hunter are Registered Liquidators within the practice of Brooke Bird – Restructuring, Turnaround and Insolvency Specialists.

Ph: (03) 9882 6666 E: Info@brookebird.com.au www.brookebird.com.au

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

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Legal

Electronic contracts – what’s new?

Part 3 – Subject to contract

By Peter Mills and Robert Gallagher* In Part 1 of this series, we looked at Stellard’s Case1 (in which we acted for the winner), where the courts ruled that the name of an agent typed in an email was a “signature” which bound the company. We also looked at when Credit Applications, their Terms and Conditions of Trade (called “T+C’s”) and guarantees need to be “signed”, whether foreign laws are relevant, and noted that proper processes and systems (both manual and online) are crucial for ensuring a signature is obtained.

In Part 2 of this series, we looked at who has sufficient “authority” to enter into an agreement or sign on behalf of a customer or guarantor.

We also looked at what happens if a person does not have authority, such as a salesman granting a general charge over all assets of his employer’s business, and where verification of signing processes and systems were not sufficient.

In this final Part 3 of this series, we look at when parties are legally bound during negotiations, such as when they say the dealings are “subject to contract”. A lot of cases have recently hit the courts over this issue, so it is timely to look at when a contract is legally binding, and what happens if it is not.

Peter Mills

24

Robert Gallagher

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Credit departments, procurement teams, business development and legal teams will find this article useful.

We also look what happens if a party enters into a second contract, incorrectly believing that the first was not binding eg because the first dealing was “subject to contract” at the time.

Apart from any need for signing and authority, when does a contract become legally binding? zz A contract is formed and becomes legally binding, if: —— essential terms are sufficiently certain, and —— the parties intend to be bound.

The meaning of “terms” in a contract and whether a party intended to be bound are to be determined by what a reasonable person would have understood.

This requires consideration not only of the words used, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. The actual intention of a party is not relevant, even if important economic and other terms of significance (but not essential) have not been finalised.2

Legal

The meaning of “terms” in a contract and whether a party intended to be bound are to be determined by what a reasonable person would have understood.

zz The substance of communications and documents, and not the form of any discussions or document, will be important. zz These principles apply to all contracts, whether written or verbal and whether or not in relation to land. zz If a “contract” is not legally binding, then the parties are not bound and neither can be sued under the “contract”.

What does “subject to contract” mean?

When negotiating contracts, parties might call the document a “memorandum of understanding” or use the words “subject to contract” or “subject to execution of the contract”. These words do not of themselves resolve the questions of whether and when a contract becomes legally binding.

Negotiations (whether or not they

use the above words) will fall into one of four classes3.

(1) the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect – this is a legally binding contract.

(2) the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document – this too is a legally binding contract.

(3) the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract – this is not a legally binding contract.

(4) one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon while expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms – this is a legally binding contract.4

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

25

Legal

...be careful when using phrases like “subject to contract”. It will not always protect a party, especially one who decides that they really want to use the first price to increase other bids.

In Stellard’s Case, after considering numerous emails and documents passing between the parties, and that urgency was important as due diligence had to be started, the court found that the contract, as constituted by emails, fell into the first of the above classes, and was a legally binding contract. That was so, even for a contract for the sale of land which must be in writing and signed by all parties to be bound. The Court held that the contract was formed on the passing of the following specific emails: By the intending Buyer (Stellard): “This offer is of course subject to contract and due diligence as previously discussed.”

In response by the intending Seller (NQF): “We accept the below offer which we understand will be subject to execution of the Contract provided (with agreed amendments) on Monday …”

Despite this, and unknown to Stellard at the time, NQF continued discussions for a second contract for the sale of the same land and business, to achieve a higher sale price. The effect of the court decision was not only that Stellard had a legally binding contract with NQF, but that NQF also would be liable for damages for breach of the other contract if made with the second buyer.

Takeaway – be careful when using phrases like “subject to contract”.

It will not always protect a party,

26

especially one who decides that they really want to use the first price to increase other bids5. If a party then enters into a second contract, whilst legally bound by the first, it will likely also face a claim for damages by the second “bidder”. This is very important if a party deals with unique or rare assets.

What common contracts should you be careful with?

Many contracts are formed by businesses every day. Some of these arise from normal business, whilst others are more complicated, such as settlements of litigation or disputes.

The “rules” discussed in this series should be considered in your deal making. Some further examples of complexity in this area are as follows: zz Jennings Case – binding settlement contract after mediation6 This case shows that settlement of litigation by mediation (or negotiation) may be binding as soon as the lawyers involved “shake hands”, whether they do that physically or notionally over the telephone. If an offer is made it can become a contract when the other party says, “I accept”.

The parties’ previous rights are lost, and converted into rights under the settlement agreement.

Takeaway – be certain of what the mediation and settlement is to cover. Ensure mediation agreements are suitably worded as to when the parties will be bound eg. many formal

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Mediation Agreements specify that there is no agreement unless the terms are reduced to writing and signed by all parties. This is prudent where complex issues are involved. zz Secure Parking Case – council tender not accepted and so nobody entitled to sue7 A council tender was lodged by Secure. The council proposed that a clause in the tender be changed so that bank guarantees, as opposed to performance bonds, be provided

by Secure. The variation was “in substance” different to the terms of the tender lodged, and Secure did not agree to the proposed variation.

The council purported to “terminate” the contract based on Secure’s failure to provide the bank guarantees, and sought damages for the breach.

Secure counter sued for damages for unlawful termination by the council, saying the variation was never accepted and they had never agreed to provide bank guarantees as part of the contract.

The court held that neither party was entitled to sue, as a legally binding contract had never been entered into in the first place.

This reinforces the first principles discussed above, that the essential terms must be certain and agreed.

Takeaway – no matter how much paperwork is generated and signed, if a term of a contract is in substance an essential term which has not been agreed upon, then no legally binding contract has been formed. Making sure that all of the essential terms are agreed upon will not always be an easy task. zz “The Satanita”8 – terms of a competition for multiple participants zz Entrants in a yacht race gave an undertaking to the yacht club that they would be bound by the rules of the club. It was

Legal

held that all race participants were therefore in a contractual relationship with each other, and bound by the club’s rules.

This is an example of a case where the two or more parties to a contract agree to the terms as put forward by a third party. zz The “mechanics” of a competition are that the first competitor offers to all others who may enter to observe the rules if they will do so as well.

The second and subsequent competitors, by entering the competition, accept this offer and make a similar offer to others and so on.

Takeaway – Even terms for dealings such as online and customer competitions may include contract issues, Privacy Act compliance, and consumer protection laws. Make sure that your competitions are being conducted so that all competitors are bound by the same terms. Otherwise you might even end up with more than one winner! zz Pennzoil v Texaco zz In 1984, Pennzoil made an informal (but binding) contract called a “Memorandum of Agreement” with Getty Oil (called “the MOA”), to purchase a large portion of Getty Oil, in order to give Pennzoil rights to Getty’s oil deposits.

zz Following the deal, the Texaco oil company, operating under the belief the MOA was not a binding contract, made a contract with Getty (called “the Texaco Contract”) which was inconsistent with Getty Oil’s obligations under the MOA. zz Pennzoil sued Texaco for inducing Getty to breach the MOA, and in 1997 Pennzoil won judgement for USD$8.3 billion damages. zz Texaco went bankrupt over the judgment.

Takeaway – documents, despite not being called “contracts”, may be binding contracts. Further, if you interfere with a binding contract between other parties, you can also be sued.

Takeaways A contract will not be binding unless there is agreement on what in substance are the essential terms.

Parties should be cautious on how they sign off or comment when negotiating, as “subject to contract” and similar phrases will not necessarily protect them, and they may be immediately bound even when they did not wish to.

Be extremely cautious if you wish to use a bid by one buyer to increase another buyer’s bid. Whilst in many cases there will not be anything unlawful in doing this, it did not work out for the vendor in Stellard’s Case.

Parties should be cautious on how they sign off or comment when negotiating, as “subject to contract” and similar phrases will not necessarily protect them, and they may be immediately bound even when they did not wish to.

You could end up being legally bound under two contracts, forced to sell to the first buyer, and liable to pay damages to the second buyer.

Neither party can sue for loss if there was never a legally binding contract.

Terms for online and customer competitions should be carefully worded and processes used so that all participants are legally bound by the same terms and proper Privacy and other compliance is dealt with.

Conclusion We hope that this series of articles has proved useful. Please contact us if you wish to discuss how we can assist you.

By: Peter Mills, Special Counsel pmills@tglaw.com.au T +61 7 3338 7921 Robert Gallagher, Partner rgallagher@tglaw.com.au T +61 7 3338 7920

FOOTNOTES: 1 Stellard Pty Ltd & Anor (“Stellard”) v North Queensland Fuel Pty Ltd (“NQF”) [2015] QSC 119 2 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165.

3 Dixon CJ, McTiernan and Kitto JJ in Masters v Cameron (1954) 91 CLR 353 at 360.

4 McLelland J, Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628 5 See also Moffatt Property Development Group Pty Ltd v Hebron Park Pty Ltd (2009) QCA 60, where the terms agreed upon referred to further put and call option terms to yet be prepared. The court held that the essential terms of the contract were still certain and was still binding despite such option terms not being agreed. Again, the sellers had tried to entice other buyers after making the first contract. The other thing not mentioned in the decision is that whilst the buyer successfully obtained an order that the seller had to sell it the land, by the time the court decision was made, a property slump meaned the land was now worth far less.

6 Jennings v Jennings [2016] NSWCA 29 7 Secure Parking Pty Ltd v Woollahra Municipal Council [2016] NSWCA 154 8 Clarke v Dunraven [1897] AC 59.

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

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Legal

CASE NOTE:

Guarantees in the age of electronic signatures: What credit managers should know

By Frank Gambera*

The recent New South Wales Supreme Court of Appeal decision in Williams Group Australia Pty Ltd v Crocker [2016] NSWCA 265 (‘Williams v Crocker’) highlights the pitfalls of electronic signatures while also serving as a reminder to users of modern electronic commerce that the validity of an electronic signature should not be assumed without adequate confirmation.

The Facts

Frank Gambera

28

The case concerns the enforcement of a guarantee given by Mr Crocker, a company director, to secure the supply of building materials from Williams Group Australia Pty Ltd (Williams), under a credit application.

The credit application included the electronically affixed signatures of the three company directors, Mr Crocker being one. The credit application was accompanied by an ‘all-moneys guarantee’ which also bore the signatures of the three directors in their capacity as guarantors.

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

The directors’ signatures were affixed to both the credit application and accompanying guarantee document electronically by way of a computer program which allows users to upload digital signatures and later apply the signature to documents.

In accordance with the credit arrangement, Williams supplied building materials to the company.

By May 2013, the company’s debt stood at $889,534.35 and by which time Williams sued the company to recover the debt and enforce the guarantee. In October 2013, the company was placed in liquidation.

Mr Crocker challenged Williams’ claim, denying liability and claiming instead that he had no knowledge of his signature having been affixed to the guarantee.

The Decision On appeal, Williams challenged the lower court’s finding in favour of Mr Crocker. Williams argued, among

Legal

It is not enough to assume, without more, that a signature applied to a document electronically is genuine. other things, that Mr Crocker was bound by the guarantee by reason of – 1. Ostensible authority – Mr Crocker had authorised another person to affix his signature electronically; 2. Ratification – Mr Crocker knew of the terms of the credit ASIC Extract Snapshot: LITTLE PROJECTS PTY. LIMITED ASIC Extract Snapshot: CHOAM PTY. LIMITED application and accompanying guarantee, and that he LITTLE PROJECTS PTY. LIMITED Current Organisation Details ASIC InfoTrack shut his eyes to the obvious.

ACN 100 100 100 Start Date 14/09/2010 Current Organisation Extract ABN 85 100 100 100 Name CHOAM PTY. LIMITED 3. Estoppel – It was reasonable for Williams to rely on Current Name CHOAM PTY. LIMITED Name Start Date 14/09/2010 the ‘genuineness’ of Mr Crocker’s signature and the Registered In Victoria Status Registered Registration Date 07/11/2005 Type Australian Proprietary Company accompanying witness’s signature on the documents. Review Date 07/11/2015 Class Limited By Shares - 100 100 100 CHOAM PTY. LIMITED Company Type ACN (Australian Company Number) Sub Class Proprietary Company The Court of Appeal rejected each line of argument and Disclosing Entity No upheld the primary judge’s finding.

Document No. 1E1001000 CHOAM PTY. LIMITED

1800 738 524

ACN

100 100 100

ABN

85 100 100 100

Current Name

Current Organisation Details Start Date Name

CHOAM PTY. LIMITED

Name Start Date

Registered In Victoria ASIC Data Extracted 22/12/2016 at 08:34 Registration Date 07/11/2005

Status Type

14/09/2010

CHOAM PTY. LIMITED 14/09/2010

Under External Administration

Australian Proprietary Company

This extract contains information derived from the Australian Securities and Investment Commission's (ASIC) Review Date 07/11/2015 Class Limited By Shares database under section 1274A ofType the Corporations Act 2001.Please advise ASIC of any error or Sub omission Company ACN (Australian Company Number) Class which Proprietary Company you may identify.

Disclosing Entity No Document No.

Company Directors

Share Structure

Current Directors: 3

Class

ACN (Australian 100 100 100 Company Number): Company Secretaries 85 100 100 100 ABN: Secretaries: 1 CHOAM PTY. LIMITED Current Name: Company

Company Directors

Lessons from the Case

Current Directors: 3

Registered in: Registration Date: Review Date: Company Bounded By:

Victoria 07/11/2005 07/11/2015

- Current Organisation Details -

1. It is not enough to assume, without more, that a Company Secretaries 24 signature applied to a document electronically is Company Secretaries: 1 genuine.

- Company Addresses 2. The onus is on the party seeking to rely on the guarantee to confirm that a director’s signature is genuine and valid.

3. Just because a signature is witnessed, does not mean a - Company Officers company can rely on the signature as being genuine.

Credit Score Name:

Name Start Date: Status: Type: Class: Sub Class:

- Registered Office Address: Start Date:

1E1001000

Shares Issued

Amount Paid

A CLASS ORDINARY SHARES Document No.

60

$60.00

B

B CLASS ORDINARY SHARES

25

C

C CLASS ORDINARY SHARES

15

$15.00

ORD

ORDINARY SHARES

100

$100.00

A

Class Type

Full ASIC results >

Share Structure

Risk Data Summary

Class

Class Type

A

A CLASS ORDINARY SHARES Insolvency Notices

B

B CLASS ORDINARY SHARES

CHOAM PTY. LIMITED 14/09/2010 Under external administration Australian Proprietary Company Limited By Shares 0 Proprietary Company Higher Risk

Court Judgements

2

Payment Defaults

4

Shares Issued

1

Mercantile Enquiries 7 1E6849286 Credit Enquiries 18

C

C CLASS ORDINARY SHARES

ORD

ORDINARY SHARES

Average Australian Proprietary Company

850

Lower Risk

Full Credit report >

Risk Data

1 SMITH STREET VIC 3000 09/06/2014

Summary

- Principal Place of Business 1 SMITH STREET VIC 3000 Address: 19/05/2014 Start Date:

Court Judgements 1F0479851

2

Payment Defaults

4

Insolvency Notices

1

Mercantile Enquiries Credit Enquiries

Amount Paid

60

$60.00

25

$25.00

15

$15.00

100

$100.00

Full ASIC results >

1F0479851

Note: A date or address shown as UNKNOWN has not been updated since ASIC took over the records in 1991. For details, order the appropriate historical state or territory documents, available in microfiche or paper format. * Check documents listed under ASIC Documents Received for recent changes.

7 18

REVEAL workspace >

1

Directors

*Frank Gambera Director McMahon Fearnley Lawyers Pty Ltd Tel: (03) 9670 0966 Email: djp@mcmahonfearnley.com.au www.mcmahonfearnley.com.au

$25.00

2 1

Full Credit report >

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

29

PPS

PPSA claims another victim - a $23 million asset is lost to the insolvent Onesteel Group

By Oliver Shtein, Karen Wong, Gavin Stuart and Ben Hardy*

30

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

PPS

All businesses should be aware of the importance of properly recording security interests on the Personal Property Securities Register (PPS Register). The courts have once again reminded us of the importance of strict compliance with the legislation when registering security interests, and the potential to lose property to third parties when registrations are inadequate in the event of external administration.

In the matter of OneSteel Manufacturing Pty Limited (administrators appointed) [2017] NSWSC 21, the creditor, Alleasing Pty Limited, leased to OneSteel Manufacturing Pty Limited plant equipment said to be worth $23million. The fact that the lease was covered by the Personal Property Securities Act 2009 (Cth) (PPSA) was not in dispute. Registrations were lodged notifying Alleasing’s interest in the equipment, but by reference to OneSteel’s ABN, not the ACN. When administrators were appointed to OneSteel, they contacted Alleasing and informed its representatives that the registrations were defective. This caused Alleasing to lodge fresh registrations over its interest in the equipment, but this time by reference to OneSteel’s ACN. OneSteel continued to argue that the registrations were defective and the equipment had been lost to it.

Alleasing approached the court in an effort to recover its equipment.

It pursued a number of arguments, including a constitutional argument which has to date not been successful in Australia in this kind of case.

Alleasing first argued that the security interest had in fact been perfected on the bases that:

The decision is an important reminder that strict compliance with the requirements of the PPSA is required when registering... zz by making the first registrations with reference to the ABN, the nine digit ACN had in fact been included on the PPS Register. zz the post-adminstration registration could in effect be backdated to be effective prior to the date of appointment of the administrators.

The PPSA regime is clear that registration of a security interest where the grantor is a company (and is not trustee of a trust with an ABN) must be done by reference to the grantor company’s ACN. The PPSA also relevantly provides that a defect in a registration will exist at a particular time where a search of the PPSR by reference to that particular time, and to the grantor’s details would not be capable of disclosing the registration.

The court found for the administrators on the basis that a search of the PPS Register by ACN alone would not reveal the registrations, and so they were defective. The court also refused to retrospectively perfect the security interest, as the subsequent registration was done after the ‘critical date’ on which the administrators were appointed to OneSteel.

The decision is an important reminder that strict compliance with the requirements of the PPSA is required when registering security interests. With the New Year only just underway, secured parties are

reminded to review any registrations where this might be an issue, and to address the incorrect registration as soon as possible. If there is any concern that the grantor may be the subject of some form of external administration, it is important to seek legal advice and take steps to protect your rights. In some cases a Court application may be able to cure the problem.

As for the Constitutional argument, this was essentially that Alleasing’s property had been acquired on unjust terms in a manner not permitted by the Consitution. Fans of Australian film will remember this principle as ‘the vibe’ raised by the suburban solicitor Dennis Denuto in the film ‘The Castle’.

Unfortunately for Allleasing, the Court found no vibe and the argument was rejected essentially because the Court held that the relevant part of the PPSA is a law for adjusting right of creditors in insolvencies and not a kind of law that the Constituion will strike down. Statements made by an Alleasing spokesman and reported in the press suggest that the issue may be appealed all the way to the High Court. *Oliver Shtein – Executive Lawyer Karen Wong – Senior Associate Gavin Stuart – Executive Lawyer Ben Hardy – Lawyer Bartier Perry Lawyers www.bartierperry.com.au T: 02 8281 7800

The PPSA also relevantly provides that a defect in a registration will exist at a particular time where a search of the PPSR by reference to that particular time ... would not be capable of disclosing the registration.

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

31

Insolvency

Exercising your creditor rights to get the most from personal insolvency

By Paul Shaw*

Paul Shaw

32

A complaint AFSA sometimes receives from creditors is a lack of information or communication from practitioners during the personal insolvency process.

While we take these complaints seriously, creditors might be surprised to learn that they have a number of legal rights they can (and should) exercise to get the most from bankruptcy and other personal insolvency arrangements (including debt agreements).

Creditors are a key stakeholder in the personal insolvency system and their role is specifically recognised under bankruptcy legislation by giving them clear rights. These include the right to: zz information and reports during the personal insolvency zz dividends in the administration (if assets are available) zz vote at any meeting of creditors during the insolvency zz complain or request a review of certain trustee actions One effective way creditors can be actively involved is to participate at meetings where they have the power to vote on resolutions influencing the direction of a personal insolvency administration.

For instance, creditors can vote in bankruptcy to: zz replace the existing practitioner with another

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

zz form a committee to oversee the practitioner; and/or zz accept/reject the practitioner’s remuneration AFSA has developed a useful resource jointly with ARITA (Australian Restructuring Insolvency and Turnaround Association) on practitioner remuneration available on our website: (www.afsa.gov. au/insolvency/i-am-owed-money/ approving-trustees-fees) Creditors who are not satisfied with how a personal insolvency is administered should exercise these rights to ensure their views are properly taken into account as ultimate beneficiaries in the insolvency process.

In addition, creditors can raise concerns with AFSA about a personal insolvency administration or individual practitioner. This may involve lodging a complaint about or seeking a review of certain decisions taken by a practitioner during the administration.

Usually this involves delays in selling property or paying dividends or the levels of fees charged to perform work and/or costs incurred.

In either case, creditors are entitled to question how a personal insolvency is handled and expect to receive timely answers from the practitioner whose remuneration they approve.

Recently introduced legislation titled Insolvency Law Reform Act

Insolvency

2016 (ILRA) will further enhance creditors’ rights when Part 2 of the reforms dealing with insolvency administration processes (including fund handling, creditors’ meetings and remuneration of practitioners) commence on 1 September 2017.

We encourage creditors to visit AFSA’s website (www.afsa.gov.au/insolvency/i-am-owed-money) to learn how to exercise their rights to get the most from the personal insolvency process and find out more about the ILRA (www.afsa.gov.au/about-insolvencylaw-reform-act-ilra).

Further details on the ILRA and changes to creditors’ rights will be available on AFSA’s website including our quarterly Personal Insolvency Regulator (PIR) newsletter in the lead up to 1 September 2017.

Creditors who have feedback/complaint or seek to review a decision by a practitioner can lodge a request with AFSA online at: zz Feedback/Complaints (www.afsa.gov.au/ contact-us/feedback-and-complaint) zz Reviews (www.afsa.gov.au/about-us/complaintsand-reviews/request-review) Where a creditor is aware of wrongdoing, criminal misconduct (including widespread misconduct), dishonesty or fraud relating to a bankruptcy and wish to remain anonymous, then it is possible for you to report your concerns to AFSA as a tip-off: zz Tip-offs (www.afsa.gov.au/about-us/complaintsand-reviews/tip-offs) The outcome of complaints, reviews and tip-offs are published annually in AFSA’s Personal Insolvency Practitioners Compliance Report (www.afsa.gov. au/statistics/personal-insolvency-practitionerscompliance-report) and inform focus areas for its annual Compliance Programme (www.afsa.gov. au/insolvency/i-am-practitioner/complianceprogram-2016-17). *Paul Shaw is National Manager, Regulation and Enforcement at Australian Financial Security Authority

Insolvent trading costs creditors over $1.3bn in 15/16 A conservative analysis of recent insolvency practitioners’ lodgements to ASIC, indicates that directors who breach their duties and trade whilst insolvent, have cost the Australian economy $1.3bn in the last financial year.

All directors have a statutory duty to ensure their company does not trade while insolvent. ASIC defines insolvency as the point where the business is unable to pay its debts when they fall due.

The report identified that of the 10,078 external administrators’ reports lodged with ASIC, 62.6% identified that directors had traded insolvent.

Alarmingly the actual cost of these insolvencies could be much higher as the report does not take into account debts incurred prior to the point of formal insolvency that also remained unpaid when the administrator was appointed.

Unsecured/trade creditors bore the brunt of these losses as statistics show: —— that secured creditors were owed nothing in more than two thirds of administrations; —— banks and finance organisations are less likely to have extended new credit during this preappointment period; and —— 46.8% of allegations of insolvency were based on insolvency indicators including financial statements that disclose a history of serious shortage of working capital or unprofitable trading.

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

33

Insolvency

The AICM suggests that credit professionals follow the ATO’s lead and list defaults...

The findings from ASIC’s data “Insolvency Statistics: External administrators’ reports” (July 2015 to June 2016) summarise the information submitted to ASIC by external administrators and which also highlighted that in the year to June 2016: —— 10,078 external administrator’s reports were submitted to ASIC, up from 8,866 —— Insolvent trading was identified in 5,736 reports, up from 4,856 It is clear that insolvent trading remains a real concern and there is an alarming trend of directors breaching their legal and ethical duties to not incur debts when there is no reasonable likelihood of meeting the obligations.

This is an issue for businesses of all sizes that supply goods and services on credit terms, as well as

court actions arising from the almost 5,000 incidences of likely breaches of director’s duties.

What can credit professionals do?

the ATO which is one of the major creditors in most insolvencies.

This concern cannot be ignored given there is little chance of creditors recovering their losses through any dividend from the insolvency process.

The reports from administrators expect no dividend to be paid in 91.9% of appointments and more than 11 cents in the dollar expected in only 3.3% of all appointments.

What is being done to address insolvent trading?

External administrators referred 168 matters to other authorities, primarily the ATO. External administrators expected to or had taken action: —— Public examinations = 168 —— Recovery proceedings for benefit of creditors = 3,119 The AICM has asked ASIC for a summary of investigations and

These figures highlight the need to be vigilant with your customers. Taking note of changed behaviours and general risk signals may help identify a customer who is trading whilst insolvent.

The AICM suggests that credit professionals follow the ATO’s lead and list defaults as this will provide signals to your fellow credit professionals of potential insolvencies.

Ensure you have effective processes in place to react to default listings of other creditors (including the ATO from 1 July 2017) so that you can adjust the risk profile, credit limits and collections activities accordingly.

Insolvent trading and the proper prosecution of offenders to act as a deterrent, remains a focus of AICM’s law reform policy agenda.

Link to report: http://download.asic.gov.au/media/4108700/ rep507-published-14-december-2016.pdf

REPORT 507: Insolvency statistics: External administrators’ reports (July 2015 to June 2016)

This table shows the costs of insolvent trading.

Table 19: Initial external administrators’ reports—Estimated debts incurred after date of insolvency (1 July 2015 to 30 June 2016) Estimate of debts incurred

Number of reports alleging criminal breach

Percentage of reports

Number of reports alleging civil breach

Percentage of reports

$0–$250,000

54

57.4%

2,448

54.4%

$250,001 to less than $1 million

17

18.1%

1,171

26.0%

$1 million to $5 million

12

12.8%

396

8.8%

Over $5 million

5

5.3%

64

1.4%

Unable to determine

6

6.4%

417

9.3%

94

100.0%

4,496

100.0%

Total Note: All reports in this table have evidence.

Debts incurred while insolvent compared to available assets 34

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

64

Table 20 sets out an analysis of the estimated assets available compared to the estimated size of the debts incurred by the company while insolvent, where a civil

aicm Training News

Economy

Recent graduates Statement of Attainments: FNSCRD502 Manage factoring and invoice discounting arrangements

Bianca Struwig

QLD

Bianca Lu

NSW

Jacques Martin

WA

Naivedhya Bhatia

VIC

Meagan Cougle

QLD

Ashleigh Loades

SA

Jacqueline Prasad

QLD

Olivia Knuckey

QLD

Stephanie Kriekhaus

QLD

Dara Collins

NSW

Cheryl Dalgleish

WA

Sue Dal Molin

NSW

Natalie Mournehis

NSW

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VIC

Christopher Burdis

NSW

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NSW

BSBCNV506 Establish and manage a trust account

Nicholas Howard

VIC

Stefan Lancy

VIC

Pamela Brown

VIC

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VIC

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VIC

FNSCRD402 Establish and maintain appropriate security

Luisa Panos

QLD

Linda Ridsdale

QLD

Certificate IV in Credit Management

Diploma of Credit Management

In-House Training

Angela Mc Causland – VIC

Joanne Wharton – NSW Mark Beauchamp – NSW

Baiada Australia BOC

2017 Face to Face Training Calendar – Melbourne, Brisbane and Sydney Melbourne:

Table of Explanation:

12th April – Telephone Collection Techniques (C,4) 5th June – Manage and recover bad and doubtful debts (C,4) 6th & 7th June – Manage factoring and invoice discounting arrangements (E,D) 21st June – Develop and monitor policy and procedures (C,D) 22nd June – Manage people performance (D,E)

C = Core Unit, E = Elective Unit, D = Diploma, 4 = Certificate IV

Brisbane: 8th & 9th May – Manage factoring and invoice discounting arrangements (E,D) 10th May – Manage and recover bad and doubtful debts (C,4) 9th June – Develop and monitor policy and procedures (C,D)

Important Information: You do not have to be a current AICM student undertaking a full qualification to attend any AICM face to face training.

You may wish to undertake a program for your Professional Development, or enhance and update your current skills and knowledge.

On the completion of the face to face training, you will be required to undertake the online assessment/s for the unit/s of competency, if you wish to receive a nationally recognised Statement of Attainment.

Sydney: 20th April – Telephone Collection Techniques (C,4) 17th May – Manage and recover bad and doubtful debts (C,4) 22nd and 23rd May – Manage factoring and invoice discounting arrangements (E,D) 15th June – Develop and monitor policy and procedures (C,D) 16th June – Manage people performance (D,E)

Please register you interest early, as there is a minimum requirement of 8 students to conduct face to face training.

To speak to AICM about these or any other learning or development, call 1300 560 996 or email andrew@aicm.com.au or debby@aicm.com.au

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

35

Economy

160 countries under the magnifying glass

By Graham Crozier*

Graham Crozier

36

Starting with falling oil prices and financial markets in the winter, the Brexit referendum in the summer and the election of Donald Trump in the autumn, 2016 was punctuated by a series of upsets. Can we hope for more calm – or even improvements in 2017?

Every year, Coface assesses the business climate in 160 countries, ranking them on an 8 level scale: A1 to E, from the most favourable to the least favourable situation. This assessment takes into account the reliability of financial information on companies, the level of legal protection for creditors and the

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

quality of government institutions.

Perhaps, promising signs of economic upturn because for the first time since 2015, Coface has made more upgrades than downgrades in our country risk assessments.

The most developed countries, including Australia have the best business environments, with 80% of these having A1 and A2 level ratings.

Even the lowest performer among these, Greece, is rated at A3.

In emerging and developing economies, business climate rating levels are normally between B and D. However, in Central and Eastern

Europe (which has A4 average rating), 40% of countries are in the A1 to A3 categories. In Sub-Saharan Africa (which has an average ranking of C) 15% of countries fall into the newly introduced E category. The Middle-East (which has an average ranking of B) has 21% of its countries in the E category. The average assessment for emerging countries in the Asia zone is B. Among the improvements, are six Central and Eastern European countries: Estonia (A1) and Serbia (B) have been upgraded, thanks to improvements in the “institutional” and “financial information” indicators.

Romania (A3), Bosnia (B) and Georgia (B) have been awarded higher rankings because of better protection for creditors, and Montenegro (B) for improvements in its institutions.

Bulgaria (A4) has confirmed its recovery, thanks to moderate growth and the continued consolidation of its banking sector.

The United Arab Emirates (A2) benefited from a new law on insolvencies. Pakistan and Bangladesh (both now at C) benefited from improvements in financial information.

Argentina (B) was also upgraded, thanks to the reforms implemented by pro-business President Macri.

In sub-Saharan Africa, smaller countries are faring better than the larger economies. Two of the best performers in the region are Ghana (B), which passed its democratic maturity test in December, and now has a good level of public finance management, and Kenya (A4), which

Global political risks are at a record high and so ensuring your business is protected against payment defaults arising from political events will be key this year. has seen a boost in tourism and increased public investments.

Having said this political uncertainty will continue to dominate the global economic climate this year. In particular, the projection for Mexico’s economy is in a landing phase and one to keep a close eye on as the year progresses.

The country has achieved strong performances in the past, opening up competition and its labour market. However, uncertainty looms at large with its reliance on the US as the destination for 80% of its exports.

The election of Trump has resulted in a wait-and see attitude from investors, because of potential protectionist (a 35% increase in customs tariffs has been mentioned) and anti-immigration legislation.

Remittances from Mexican workers living in the United States account for 2.4% of Mexico’s GDP. These unknown factors, in addition to the higher inflation and failing investments, have led Coface to downgrade the country from Acceptable Risk (A4) to Significant Risk (B).

The most developed countries, including Australia have the best business environments, with 80% of these having A1 and A2 level ratings.

Overall, Coface projects two main areas of concern for 2017: Global political risks are at a record high and so ensuring your business is protected against payment defaults arising from political events will be key this year. Among advanced economies, Europe is awaiting the outcome of a number of decisive electoral battles as well as the exact terms of Brexit. Meanwhile, political risks in emerging countries are higher than ever, driven by social discontent and heightened security risks – unsurprisingly these are highest in Russia and Turkey.

Credit risk due to high levels of company debts are a threat to banking sector. The level of company insolvencies should continue to fall in advanced economies – Australia is the exception to this with projected +1% growth in insolvencies versus 2016. More broadly, excessive company indebtedness is posing a problem for emerging countries.

Companies in China have the highest levels of debt equivalent to more than 160% of GDP. While credit conditions are becoming stricter in emerging countries – exporters, keep a watch-out!

*Graham Crozier is the Chief Executive of Coface Australia – a global provider of trade credit insurance, business information and credit ratings.

To get the latest industry and sector updates visit www.coface.com.au or email au_info@coface.com

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

37

COUNTRY COUNT RISKA A COUNTRY RISK

Economy

RISK OF BUSINESSES DEFAU R

160 COUNTRIES 160 COUNTRIES UNDER THE UNDER THE 160 COUNTRIES MAGNIFYING MAGNIFYING GLASS GLASS UNDER THE

MAGNIFYING GLASS

GROENLAND (DENMARK)

CANADA

• Comprehension of the business• environment Comprehension of the business environment • Microeconomic data collected over • Microeconomic 70 years data collected over 70 years of payment experience of payment experience

ICELAND

FINLAND

NORWAY

ESTONIA

B

NETHERLANDS IRELAND

UNITED KINGDOM

FRANCE

SWITZERLAND

FINLAND

B

AUSTRIA

ITALY

FRANCE

HUNGARY

BOSNIA

C

CZECH REPUBLIC

SLOVENIA

A4

SERBIA

BULGARIA

MONTENEGRO

PORTUGAL

ESTONIA

ITALY

B

HUNGARY

COLOMBIA

ECUADOR

ECUADOR

ROMANIA

CROATIA BOSNIA

C

CUBA TURKEY

GREECE

A4

PERU

SERBIA

BULGARIA

PERU

BRAZIL

GREECE

TURKEY

BOLIVIA

DOMINICAN REPUBLIC

MALTA

MALTA

JAMAICA CYPRUS BELIZE HONDURAS

BOLIVIA

D

PARAGUAY CYPRUS

HAITI

CHILE

CHILE

CABO VERDE

GUATEMALA

ARGENTINA

NICARAGUA

EL SALVADOR

BELARUS

COSTA RICA

LUXEMBOURG

FRANCE

SWITZERLAND

VENEZUELA

CZECH REPUBLIC

AUSTRIA SLOVENIA

ITALY

UKRAINE

UPGRADES MOLDOVA B

SLOVAKIA

UPGRADES

B

SIERRA L

ECUADOR

ROMANIA

CROATIA

C

COLOMBIA

HUNGARY

GUINEA-BISSAU

GUYANA SURINAME FRENCH GUYANA

PANAMA

BELGIUM

SEN

ARGEN URUGUAY

TRINIDAD AND TOBAGO

POLAND

GERMANY

SIER

PANAMA

MACEDONIA

LITHUANIA

NETHERLANDS

SURINAME FRENCH GUYANA

COLOMBIA

GUINEA-BIS VENEZUELA

COSTA RICA

GUYANA

ALBANIA

RUSSIA

LATVIA DENMARK

SPAIN

NICARAGUA

MOLDOVA

MONTENEGRO

MEXICO

SPAIN

PORTUGAL

VENEZUELA

SLOVAKIA

MACEDONIA

A2

GUATEMALA EL SALVADOR

COSTA RICA

B

D

HAITI CABO VERDE

NICARAGUA

UKRAINE

ALBANIA

SWEDEN

HAITI

JAMAICA BELIZE HONDURAS

TRINIDAD AND TOBAGO

AUSTRIA

ROMANIA

CROATIA

DOMINICAN REPUBLIC

B

PANAMA

SLOVAKIA MOLDOVA SWITZERLAND

CUBA

RUSSIA

EL SALVADOR BELARUS POLAND

LUXEMBOURG UKRAINE

CZECH REPUBLIC

SLOVENIA

NORWAY

JAMAICA BELIZE HONDURAS

BELGIUM LUXEMBOURG

ICELAND

LITHUANIA

UNITED STATES GERMANY

BELGIUM

A2

DOMINICAN REPUBLIC

GUATEMALA

NETHERLANDS BELARUS

UNITED KINGDOM POLAND

GERMANY

LATVIA

DENMARK

LITHUANIA

MEXICO

CUBA ESTONIA

RUSSIA

LATVIA

IRELAND

A2

SWEDEN

DENMARK

UNITED STATES

FINLAND

NORWAY

MEXICO

A2

SWEDEN

• Microeconomic data collected over 70 years of payment experience

UNITED STATES

CANADA

ICELAND

• Comprehension of the business environment

BOSNIA

MONTENEGRO

SERBIA

ARGENTINA BULGARIA MACEDONIA

SPAIN

MALTA

A4

B

• Improved business environment since the GREECE election of President Macri: liberalization of the exchange rate, abolition of restrictions on access to foreign exchange and easing of administrative procedures for imports / exports

ALBANIA

PORTUGAL

A2 CANADA

• Macroeconomic expertise in assessing • Macroeconomic country risk expertise in assessing country risk

• Macroeconomic expertise in assessing country risk

UNITED KINGDOM

GROENLAND (DENMARK)

A UNIQUE METHODOLOGY A UNIQUE METHODOLOGY

A UNIQUE METHODOLOGY

IRELAND

RISK OF BUSINESSES DEFAUL

ARGENTINA BULGARIA

PERU

B A4

ICELAND BULGARIA

Confirmation of • Improved business environment since the recovery, with TURKEY election of President moderate growth Macri: liberalization • Consolidation of the of the exchange rate, banking sector abolition of restrictions on access CYPRUS to foreign exchange and easing of administrative procedures for imports / exports

A2 A4

BRAZIL

ICELAND KENYA

A4 A2

Growth of 4% of Growth of in 4%tourism, •• Confirmation •• Recovery expected in 2017 expectedpublic in 2017 greater recovery, with and • moderate Capital control • investment Capital control growth BOLIVIA improved business liberalisation underway liberalisation underway • Consolidation of the climate is a positive signal for is a positive signal for banking sector PARAGUAY • Exports (tea and foreign investors foreign investors horticultural • The level of public debt • The level of public debt CHILE products) will and has fallen sharply and has fallen sharply continue to increase the fiscal budget is ARGENTINA the fiscal budget is expected to remain in expected to remain in URUGUAY surplus surplus

KENYA PAKISTAN

••Recovery in Improvem greater pub business e investment • Launch of improved b cooperatio climate China on t • Exports (te and energ horticultur infrastruct products) •continue Accelerati to investmen

B

UPGRADES

ARGENTINA

B

• Improved business environment since the election of President Macri: liberalization of the exchange rate, abolition of restrictions on access to foreign exchange and easing of administrative procedures for imports / exports

38

BULGARIA

A4

• Confirmation of recovery, with moderate growth • Consolidation of the banking sector

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

ICELAND

A2

• Growth of 4% expected in 2017 • Capital control liberalisation underway is a positive signal for foreign investors • The level of public debt has fallen sharply and the fiscal budget is expected to remain in surplus

KENYA

A4

• Recovery in tourism, greater public investment and improved business climate • Exports (tea and horticultural products) will continue to increase

PAKISTAN

• Improveme business en • Launch of cooperation China on tra and energy infrastructu • Acceleratin investment

TRY ASSESSMENT RISK ASSESSMENT MAP •MAP JANUARY MAP•2017 • JANUARY JANUARY 2017 ASSESSMENT 2017

RISK ULTING OF BUSINESSES DEFAULTING A1 A2

A1

LTING

VERY LOW

A3A1

A4A2

A2

LOW

BA3

A3

QUITE ACCEPTABLE VERY LOW ACCEPTABLE LOW

VERY LOW

LOW

CA4

DB

A4

QUITE SIGNIFICANT ACCEPTABLE

QUITE ACCEPTABLE

EC

B

ACCEPTABLE HIGH

VERY SIGNIFICANT HIGH

ACCEPTABLE

D

E

C

EXTREME HIGH

D

VERY HIGH

SIGNIFICANT

Economy E

EXTREME

HIGH

VERY HIGH

EXTREME

GROENLAND (DENMARK)

ICELAND

ICELAND FINLAND NORWAY

2

FINLAND SWEDEN

ESTONIA LATVIA

UNITED KINGDOM

BELARUS BELGIUM

FRANCE

CZECH REPUBLIC AUSTRIA SWITZERLAND

A3 ICELAND

BULGARIA

B

TUNISIA ALGERIAKINGDOM UNITED

HUNGARY

ROMANIA

SLOVENIA

BOSNIA SERBIA

UZBEKISTAN ITALY

SWEDEN ISRAEL

LATVIA IRAQ

MOROCCO

LITHUANIA

ALGERIA

BELGIUM

FRANCE

MAURITANIA MALI

A3

NIGER

GERMANY EGYPT

CZECH REPUBLIC

ISRAEL

D

UKRAINE

SENEGAL BOSNIA SUDAN

B

B

TUNISIA

ALGERIA

KENYA

SAO TOME & PRINCIPE

BURUNDI

BURKINA FASO

URUGUAY

GUINEA

C

B

GHANA TOGO

CAMEROON

GABON

transport ea and gy ral ture will ing private o increase nt

YEMEN LESOTHO

PAPUA NEW GUINEA

PAPUA NEW GUINEA

TAIWAN

INDIA

C

MYANMAR

HONG KONG

LAOS

ILE DE LA RÉUNION

BANGLADESH AUSTRALIA

AUSTRALIA THAILAND

UNITED ARAB EMIRATES

PHILIPPINES

DJIBOUTI

PAKISTAN SPAIN

ETHIOPIA

NEW ZEALAND

KENYA

C A3

VIETNAM

SRI LANKA

DOWNGRADES UGANDA

CONGO DR CONGO

n tourism, ment of the blic environment tf and business on with

SOUTH AFRICA

C

CENTRAL AFRICAN REPUBLIC

SAO TOME & PRINCIPE

A4 C

CHINA

NEPAL

PAKISTAN

CAMBODIA

NIGERIA

B

INDONESIA

MAURITIUS

MOZAMBIQUE

TANZANIA

SPAIN JORDAN

NEW ZEALAND

MALAYSIA

MALDIVES

DOWNGRADES

SINGAPORE INDONESIA

RWANDA BURUNDI

JAPAN

SOUTH KOREA

SINGAPORE

BENIN

IVORY COAST

LIBERIA

ERITREA SUDAN

MALAYSIA

A4

OMAN MADAGASCAR

ARABIA

BOTSWANA

CHAD LESOTHO

NORTH KOREA

SRI LANKA

INDONESIA

MALAWI

ILE DE LA RÉUNION

MOZAMBIQUE

VIETNAM

BAHRAIN QATAR

MAURITIUS NAMIBIA

SOUTH AFRICA

NTINA

N

BURUNDI

SAUDI ZIMBABWE

NIGER

NEGAL

AFGHANISTAN

IRAN

KUWAIT

ZAMBIA

MADAGASCAR

PHILIPPINES

CAMBODIA

TAJIKISTAN MALAYSIA

TANZANIA

EGYPT

BOTSWANA

MALI

KENYA

RWANDA

C

THAILAND

VIETNAM KYRGYZSTAN

MALDIVES

JORDAN

ANGOLA

MONGOLIA

SINGAPORE

UGANDA

IRAQ DR CONGO

PALESTINIAN TERRITORIES

NAMIBIA

MAURITANIA PARAGUAY

CAMBODIA

HONG KONG

LAOS

PHILIPPINES

ETHIOPIA SRITURKMENISTAN LANKA

SYRIA

MALAWI

ZIMBABWE

THAILAND UNITED ARAB EMIRATES

MALDIVES

GABON ISRAEL

LIBYA ZAMBIA

LEONE

CENTRAL AFRICAN REPUBLIC

LEBANON CONGO

A4

MYANMAR

HONG KONG

BANGLADESH

YEMEN

DJIBOUTI

TANZANIA

ANGOLA

U

TURKEY

CYPRUS

RWANDA

DR CONGO

BRAZIL

OMAN MYANMAR

ARMENIA AZERBAIJAN

CAMEROON

GHANA TOGO

UGANDA

CONGO

GEORGIA

TAIWAN

INDIA

C KAZAKHSTAN LAOS

UZBEKISTAN

SUDAN

CHINA

TAIWAN

BANGLADESH ERITREA

UNITEDCHAD ARAB EMIRATES

NIGERIA

GREECE IVORY ETHIOPIA COAST

MALTA

GABON

SAUDI ARABIA

NIGER YEMEN

BULGARIA BURKINA DJIBOUTI FASO BENIN

GUINEA GUINEA BENIN TRINIDAD AND TOBAGO SSAU GUINEA-BISSAU SPAIN PORTUGAL NIGERIA IVORY GUYANA CENTRAL COAST AFRICAN SURINAME RRA LEONE SIERRA LEONE REPUBLIC FRENCH CAMEROON LIBERIAGUYANAGHANA TOGO LIBERIA SAO TOME & PRINCIPE

ERITREA

SERBIA

ITALY

MOROCCO

MALI ROMANIA

SLOVENIA

CABO VERDE

BURKINA FASO

BAHRAIN QATAR

INDIA

JAPAN

SOUTH KOREA

NEPAL

PAKISTAN

KUWAIT

C

C

OMAN

CHINA

JORDAN NEPAL

EGYPT

NORTH KOREA JAPAN

SOUTH KOREA

AFGHANISTAN

IRAN

IRAQ

PAKISTAN

SAUDI ARABIA

SLOVAKIA

MAURITANIA HUNGARY

TAJIKISTAN

SYRIA

LEBANON

LIBYA

BAHRAIN QATAR

AUSTRIA

SWITZERLAND

CHAD

SENEGAL

B

C

POLAND

TURKMENISTAN

PALESTINIAN TERRITORIES

KUWAIT BELARUS

LIBYA

NORTH KOREA

RUSSIA

ARMENIA AZERBAIJAN

CYPRUS

AFGHANISTAN

JORDAN

IRELAND

KYRGYZSTAN

TURKEY TAJIKISTAN

B

TUNISIA IRAN

LEBANON PALESTINIAN TERRITORIES

GREECE

MALTA

ESTONIA SYRIA

CYPRUS

GEORGIA

KYRGYZSTAN TURKMENISTAN

MONGOLIA

UZBEKISTAN

BULGARIA

FINLAND SPAIN ARMENIA AZERBAIJAN

PORTUGAL TURKEY

GREECE

KAZAKHSTAN MONGOLIA

SLOVAKIA

GEORGIA

NORWAY MALTA

AUSTRIA SWITZERLAND

A3

ROMANIA

UKRAINE

KAZAKHSTAN

FRANCE

HUNGARY

ITALY

MOROCCO

BELARUS

CZECH REPUBLIC

SLOVAKIA

BOSNIA SERBIA

SPAIN

LITHUANIA

POLAND

GERMANY

BELGIUM

UKRAINE

SLOVENIA

PORTUGAL

LATVIA

IRELAND

POLAND

GERMANY

RUSSIA

ESTONIA

UNITED KINGDOM

LITHUANIA

IRELAND

RUSSIA

NORWAY

A2

SWEDEN

A4 A3 C

CB

MEXICO JORDAN

End of a ten-month •• End of a remains ten-month • •Economy Uncertainties over Economy remains ••Improvement of the ANGOLA political impasse political possible protectionist below itsimpasse growth below its growth business environment ZAMBIA MALAWI measures related to potential despite potential Dynamic, • Dynamic, ••Launch of despite trade with the USA ZIMBABWE slowing, economic economic • slowing, The massive influx cooperation with MADAGASCAR • The massive influx MAURITIUS NAMIBIA growth: % in 2017 growth: +2.3has % in 2017 •ofPublic investment of refugees refugees has China on+2.3 transport ILE DE LA RÉUNION MOZAMBIQUE will be limited, due weighed down weighed down on energydebt hasBOTSWANA •and Corporate • Corporate debt on has to continued fiscal wage dynamics, wage dynamics, infrastructure decreased and decreased and restraints as a result within a context of within a context of business insolvencies business insolvencies • Accelerating private SOUTH of low oil-related high unemployment high unemployment AFRICA continue to fall continue to fall investment LESOTHO revenues and rising inflation and rising inflation C • Good export • Good export • performance High public debt • High public debt performance

SOUTH MEXICO AFRICA

C B

Uncertainties over • Very low growth possible protectionist and contraction measures related to of manufacturing trade with the USA activity Public investment • Higher political risk will be limited, due and social discontent to continued fiscal • The rand is expected restraints as a result to remain highly of low oil-related volatile and capital revenues inflows are uncertain

SOUTH AFRICA

C

PAPUA NEW GUINEA

• Very low growth and contraction of manufacturing activity • Higher political risk and social discontent AUSTRALIA • The rand is expected to remain highly volatile and capital inflows are uncertain

NEW ZEALAND

DOWNGRADES

C

ent of the nvironment

n with ransport y ure ng private t

SPAIN

A3

• End of a ten-month political impasse • Dynamic, despite slowing, economic growth: +2.3 % in 2017 • Corporate debt has decreased and business insolvencies continue to fall • Good export performance

C

JORDAN

• Economy remains below its growth potential • The massive influx of refugees has weighed down on wage dynamics, within a context of high unemployment and rising inflation • High public debt

MEXICO

B

• Uncertainties over possible protectionist measures related to trade with the USA • Public investment will be limited, due to continued fiscal restraints as a result of low oil-related revenues

SOUTH AFRICA

C

• Very low growth and contraction of manufacturing activity • Higher political risk and social discontent • The rand is expected to remain highly volatile and capital inflows are uncertain

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

39

Software

SOFTWARE TIP:

Customer credit limits and risk categories

By Beth Gray FICM CCE*

By assigning credit limits a company can better manage the risk exposure of their customers.

Beth Gray FICM CCE

40

We have previously talked about the importance of accurate and complete master data, and auditing who is changing what fields. This article highlights the importance of assigning a credit limit to all customer accounts.

By assigning credit limits a company can better manage the risk exposure of their customers.

All good ERP systems provide this functionality as part of their standard package. It is then a company decision on how they calculate and assign a credit limit to an account. This calculation can be done at different levels. By individual customer, by payer, or by a “group” which may include multiple businesses with the same owner/s. This clear visibility of exposure supports strong risk management.

The most common method to calculate the required credit limit is to identify the customer payment terms and estimated sales. Eg: if the customer payment terms are 30 days EOM (End Of Month) and the estimated purchases are $10K per month you would possibly assign a credit limit of $20K. Some companies include a sales growth component, perhaps 10% making the approved credit limit $22K. You may need to take into consideration fluctuations in a customer’s monthly purchases.

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Companies that are strong on audit and risk management will hold regular review of customer credit limits. This may be quarterly, six monthly or even annually. Due to the sheer volume of customers, some companies may review some of their customers more frequently, such as their top customers, or customers deemed as high risk. A company should not generally offer a high credit limit to a customer with high sales if they are deemed a high risk.

In conjunction with credit limits each customer can be assigned a risk category. This can be configured for your specific customer data base.

See you at AICM’s

In conjunction with credit limits each customer can be assigned a risk category.

Most modern ERP systems will allow the flexibility of different risk categories. The Risk Category flows into the automated credit hold functionality. When using the automated credit hold function, what happens to the order will depend on your configurations. The risk category will have at least two criteria: 1) does the order take the account above the approved credit limit?, 2) is the account overdue?

We know that an overdue account is not always due to customer slow payment, it may be within our own company, for example, where perhaps a credit note needs to be issued. Because of this, orders that have been automatically placed on hold can be released manually for delivery once the account has been reviewed.

Companies strong on minimising unnecessary exposure will review credit limits robustly. In SAP the FKD43 report includes customer risk category, credit limit and current exposure. This report is a good way to start your review process.

Use the power of networking with your peers, join the SAP User Group. Enhance your day-to-day work by benchmarking for best in class processes and procedures. #WhatYouDontKnowCouldCostYou

Beth Gray FICM CCE is Founder of SAP Users Pty Ltd Website: www.sapusers.com.au Email: beth@sapusers.com.au #WhatYouDontKnowCouldCostYou

2017

NATIONAL

CONFERENCE 11 - 13 October 2017 QT Canberra, 1 London Circuit The 2017 National Conference will be held at the QT Hotel Canberra and will feature one of the most spectacular Presidents Dinners ever at Parliament House in the Great Hall

Visit aicm.com.au for details and earlybird registrations

AROUND THE STATES

New South Wales

Events Calendar

Wednesday 8 March 2017

Credit Toolbox 1 – Fundamentals of Credit ST LEONARDS, NSW

10-13 March 2017

Online CCE Exam ONLINE

16 March 2017

Legal Compliance 2 Day Program ST LEONARDS, NSW

Wednesday 29 March 2017

Wine Tasting Night VENUE: DELOITTE OFFICE, PARRAMATTA

Tuesday 4 April 2017

Breakfast Seminar – Tough collections with top customers CITY, CURWOOD LAWYERS

Wednesday 12th April

Credit Toolbox 2 – Collect With Confidence

Attendees at the NSW Pinnacle Awards dinner.

ST LEONARDS, NSW

20 Apr 2017

Collection Telephone Techniques ST LEONARDS, NSW

Tuesday 9 May 2017

Breakfast Seminar – Data and Tech

Presidents Report Happy New Year to all, I can’t believe its 2017….My Mum was only telling me yesterday that on this day 31 years ago she walked this shy 16 year old boy up to Whitlam Square in Sydney for his first day of work as a mail clerk for the State Bank!! 31

PARRAMATTA

years ago!! Wow

Wednesday 10 May 2017

over 150 in attendance. I would like to congratulate all winners

We finished off 2016 with a great Pinnacle Awards night with

Credit Toolbox 3 Thursday 25 May 2017

YCP Trivia Night

of the awards and also to all the nominee’s. This is great recognition to be voted by your peers. These awards are very prestigious and this event just keeps getting bigger and bigger

WINDSOR ON THE PARK

each year.

Thursday 22 June 2017

Van Dijk and new Divisional Partners Hays Recruiting and Sharp

Half day Master Class

& Carter. I look forward to working with you all in the future. I

KIRRIBILLI CLUB, MILSONS POINT

encourage all members to get onto their websites and have a

I would like to welcome our new National Partner Bureau

Thursday 22 June 2017

YCPA Dinner KIRRIBILLI CLUB, MILSONS POINT

look at the services these 3 great companies can offer.

What an exciting time for the AICM turning 50 this year, hope you are all planning to get those costs approved for the conference in Canberra in October, its going to be a huge

Tuesday 11 July 2017

celebration. NSW branch have a lot going on for you this

Evening Seminar

year so get onto the AICM website and check out our events

The customer is not the problem, you are

calendar.

CITY

Speaking of events we started off with our Credit Symposium this week with Geoff McDonald doing another

42

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

New South Wales AROUND THE STATES

Attendees enjoying the Credit Symposium.

NSW 2016 Pinnacle Award recipients.

fantastic job, we had just on 50 in attendance to this event and is getting bigger each year. We have had to move our golf day to the 3rd March this year as it was going to run at the

The Australian Institute of Credit Management welcomes our Partners for 2017.

National Partners

same time as the conference, we have had an overwhelming response from both sponsors and players and for the first time have had to put up the “house full” sign…will have full report in next magazine.

Thank you to my council for their tireless work behind the scenes, trust me they make me look very good with the

Divisional Partners

amount of work they put in. Also to all our members, we love hearing your feedback on our events be it great or on things we can improve, please keep letting us know what it is you are looking for from us. Also encourage your Managers or take a look yourself at the discounts on company sponsored group membership and or sponsorship opportunities, there are loads of fantastic opportunities for you and your companied to be involved with.

I look forward to seeing you at an event soon.

– Colin Magee

Professional Partner

NSW Division President

Official Division Supporting Sponsors

Credit Symposium Our annual credit symposium was a great way to kick off 2017.

With Geoffrey McDonald presenting, attendees knew they were in for an afternoon of learning and that we sure did.

Geoffrey interrogated AICM CEO Nick Pilavidis in his mock court examination, Nick sure got up a sweat too.

Other topics covered by Geoffrey included checking: – your electronically signed personal guarantee, – the validity of your PMSI and ALLPAP claim, – your defence to a preferential payment action.

Thanks Geoffrey for your preparation, time spent taking us

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.

through the changes and keeping the afternoon moving.

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

43

AROUND THE STATES

Queensland

Events Calendar

10-13 March 2017

Online CCE Exam

Become a Certified Credit Executive Monday 13 March 2017

Credit Toolbox 1

Introduction to Credit

Wednesday 12 April 2017

Evening Seminar

Attendees enjoying the 2017 kick off event.

Tough collections with top customers Friday 21 April 2017

Youth Credit Community Event Trivia Night Wednesday 10 May 2017

Evening Seminar The Customer is not the problem you are Monday 15 May 2017

Credit Toolbox 2 Collection with confidence Friday 26 May 2017

CCE Breakfast A breakfast for CCE members with Matt Toomey Tuesday 13 June 2017

Credit Toolbox 3 Understanding credit risk Wednesday 14 June 2017

Evening Seminar (HR) Creating a high profile team Friday 21 July 2017

YCP Dinner and AGM Divisional winner of the Young Credit Professionals Announced Friday 21 July 2017

QLD Annual Golf Day Prepare to tee off for the annual golf day!

Wednesday 9 August 2017

Evening Seminar Friday 25 August 2017

Women In Credit Luncheon (WINC) 8 – 11 September 2017

Online CCE Exam Become a Certified Credit Executive

44

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Nathan Wilkinson, Roger Masanvu, Decia Guttormsen, Dale Hannan and Gail Lord.

President’s Report We are already two months into the New Year and I’m sure like me some of you may feel like holidays are fast fading memory.

Maybe a sign I should start planning for my next trip! As this is the first report for the year, I would like to welcome all of you, our members to what will be an interesting 2017! I would also like to recognise our state sponsors – Results Legal, Vincent’s, and Randstad for their continued support of the AICM in Q. Without their support (financially and otherwise) we would not be able to plan and run as many of the events that we have throughout the year.

A special mention needs to be made to our national sponsors Equifax, Dun & Bradstreet, Austral and Bureau Van Dijk who are also active in supporting the whole AICM as we continue to find ways to help further the careers of all involved in credit management.

Since the last report, we held our first QLD Pinnacle Awards.

The night was a huge success and feedback showed that this event in 2017 is going to be even better. I would like to say a quick congrats to the winners, and thank you to all the event supporters.

A few weeks after the event we had our first classroom style CCE exam where I am pleased to announce that we now have another 5 CCE’s! Feedback on the format was positive and will be rolled out this year. If you have any questions, please contact Decia Guttormsen or any member of the QLD

Queensland AROUND THE STATES

Lucinda Bell and Stacey Woodward.

William Stubbs, Bruce Patane and Roger Masanvu.

council for more info. A special thanks to Greg Young and Forbes Dowling for offering their facilities to carry out the exam, and Decia for organising everything.

The first event for 2017 was our welcome drinks. William Stubbs gave a very interesting presentation on “The other measures of success: understanding your ‘why’ and ‘how’ that can help you start something important”. We were fortunate enough to have Bruce Patane from Patane Lawyers offer to provide additional support to the event, so a thank you goes out to Bruce and our other state sponsors for their continued support.

A special thank you to Maria Schandl who has taken the tough decision to step down so as to focus on her young family and work. The QLD council thanks you for your contribution to the AICM and looks forward to seeing you at events.

On the horizon for the month of March, we have our first CNN which is part 1 of a 2 part series of talks with Michael Peet. Michael has offered to share with us his experience and knowledge to discuss 2 topics – “Outsourcing the receivables function” and “Tough collections with Top Customers” – Very relevant topics and I am sure will also provide good insights into how we all can improve processes and soft skills. And on the back of our successful youth credit community event, I would also like to inform members that our next event is going to be in April and will be a trivia night. More details to follow, but I am sure our crack team will be able to organise something special.

I remind members that AICM turns 50 this year! In acknowledgement of this momentous event, we are asking members who have any stories/photos/special mentions that speak of our history, please contact Toni Sawyer who is working hard to dig up any information on the QLD division’s history with the intention of sharing with members in the near future. One last bit of housekeeping – I would like to encourage members to keep their details up to date with the AICM as basic information allows us to identify areas of opportunity in the way of events and locations. If you do not have the chance to do it online, you can always hand over a business card at the next CNN and

request one of our councillors to organise details to be updated.

Also any feedback about events is greatly appreciated as we aim to ensure that members get value for money.

– Roger Masanvu QLD Division President

The Australian Institute of Credit Management welcomes our Partners for 2017.

National Partners

Divisional Partners

Official Division Supporting Sponsors

Our National and Divisional 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.

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

45

AROUND THE STATES

South Australia

Josh Richards and Gail Crowder.

Sean Brady with Kay and Kevin Hollister.

President’s Report

SA showed that this is a super event, not only for the ladies in credit, but the men! It will revolve around an awesome key note speaker and some high profile attendees. We are keen to see another highly successful event which will sponsor a wonderful charity giving to those who need financial help during their times of need.

We will be holding another Quiz Night this year along with a couple of breakfasts with great guest speakers. Please look out for these events and lock into your calendars …

I would like to mention that we are very fortunate to have National President James Neate, and Director Trevor Goodwin on our SA council. We look forward to working with them to help improve and promote each state. They both offer extensive knowledge and expertise of the AICM with their many years of involvement.

Let’s rev into another busy year of credit and work together to continue to educate our members and guests. It is extremely rewarding to know we can make a difference to the industry.

Business partners, come along to our events and take the opportunity to meet and speak with our members. We are very grateful for your continued support of the AICM. Keep in touch with councillors as they are your eyes and ears to keep you up to date with credit!

Welcome to 2017! I hope everyone had a super Festive Season with family, friends and loved ones. Although it is always a busy build up to Christmas I think we all enjoy the sharing of love and laughter at that time of the year.

With another busy year of planning ahead for the councillors I would like to thank you all for your support, time and effort during 2016. Every year seems busier than the last but our team always ‘makes it right on the night’.

We have some changes within the portfolios and council this year. This should bring along some new ideas and add to our brain storming meetings. Even though South Australia does not have the quantity of credit managers compared to other states, we continue to reach out to them, and their teams, seeking their valued input into the educational areas of concern.

The Stag Hotel was the perfect break up event for South Australia in December. Quirky, funky and well positioned opposite the parklands and on the corner of a busy street well known for its eateries. We had a great turn out of members and councillors with many staying well into the evening. It was good to see everyone networking and enjoying the venue.

Our first event at the Payneham Bowling club was hot, hot, hot….. I mean the temperature of the day, a sultry 41 degrees!

We sweltered but had a lot of fun.

Next we will be holding a half day seminar, in the CBD, for ease of access for businesses. Our sub committee have some fantastic ideas with regards to speakers and topics so please look out for this over the next month and ensure you contact the councillors if you wish to attend or even to hear someone in particular. We are always willing to work with our members so you can attend, when, and how you like to fit in with busy work schedules.

This year we have our second WINC event which we are very much looking forward to. Last year, National office and 46

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

– Gail Crowder SA Division President

Lawn Bowls – 8th February 2017 Well it was certainly a hot summer’s night with a peak at 41 degrees! With not a sign of a breeze to cool things down, no one could use the excuse that “the wind blew my bowl onto the other green”!

The night started with a gourmet BBQ with meat, salads, potato bake and bread. The food was enjoyed by all followed

South Australia AROUND THE STATES

Events Calendar

6th April 2017

Half Day Workshop

10th – 13th March 2017

CCE Exam

18th May 2017

YCP Networking Night 16th June 2017

Women in Credit Luncheon 8th – 11th September 2017

CCE Exam 11th-13th October 2017

AICM National Conference

Lawn Bowls – who is closest?

The Australian Institute of Credit Management welcomes our Partners for 2017. by a couple of refreshments. Trevor and Gail arranged the teams and then we chose our bowls and headed off to the greens. The Payneham Bowling Club has artificial turf, which is more like carpet, soft and remarkably cool. Some of us took advantage of this and bowled bare foot as it was lovely to walk on with the extreme heat.

The general manager then gave us instructions on how to bowl, how the bias works and advised that the object of the game is to get as close as possible to the Jack. This led on to a few funny scenarios where people were not using the bias correctly and the bowl would end up rolling onto competitor’s turf. In one instance, an anonymous bowler, had the bias incorrectly positioned and her bowl ended up closest to the jack on the other teams green!

After 2 ends, we had half time and all headed back inside for a cool down drink, pavlova and slice and the drawing of the raffles. 1st prize was a Valentine’s basket which consisted of Haigh’s chocolates and a bottle of red wine. This was won by our President Gail Crowder. The second prize was a bottle of red wine won by Mark Burlinson from NCI. I have no doubt that will be enjoyed also.

Even though it was extremely hot and still, we all had a lot of fun bowling, networking with our fellow members and exchanging ideas for functions ahead.

We look forward to seeing you at our next function and hope it will be a bit cooler.

– Anne Wilkins FICM CCE SA Councillor

National Partners

Divisional Partners

Official Division Supporting Sponsors

Our National and Divisional 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.

March 2017 • CREDIT MANAGEMENT IN AUSTRALIA

47

AROUND THE STATES

Victoria/Tasmania

Students listen intently at Vic/Tas Toolbox 1 – Fundamentals of Credit.

Jeff Hurst (Trade Bureaux Australia) Presents Toolbox 1 Fundamentals of Credit: Part 2 – The Credit Application.

President’s Report The Vic/Tas councillors have been very hard at work over the past few months with arranging a number of activities that are both educational and social. As you’ll see form the pictures on our pages (and now the new website gallery) our Golf day was once again a huge success with around 140 players attending on what was a great day. As is always the case these type of events are simply not possible without the assistance of some many people and supporters. So to all who attended and/or contributed with prizes (etc.) a big thanks and we look forward to you joining us next year for what will be an even bigger event!

Let’s hope that someone wins the hole in one prize and the keys to the car in 2018!

The Credit ToolBox sessions are well underway with two recently being held in the CBD. Thanks again go to Austral and in particular Peter Valance for sponsoring the first two sessions (Toolbox 1, Parts 1 and 2). Special thanks also to our presenters on the day – Donna Smith and Jeff Hurst. From all reports both presentations were well received by those who attended.

I encourage all members to have a look at the Events Calendar that is now on the AICM website – we believe this year’s Calendar has some really exciting options that will both education and entertain.

I would in particularly like to see all members at our Women in Credit forum to be held on the 4th May at Crown. This event has grown over the past few years and if you have not attended please accept my personal invite. It truly is a great event and the networking opportunities are endless!

We are also providing some great events for our Tas friends.

Following on from the networking nights held last year. We are sure the nights planned for 2017 will once again be worth attending.

Of course our two main awards nights will once again be the events not to be missed – the YPCA award in July where we will see our top young Credit people introduced and in Dec the ever popular Pinnacle awards. Both great functions enjoyed by all who attend. Our numbers for the YCPA awards have grown over the past few years and I again encourage those senior credit professionals to speak to their staff about 48

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Donna Smith (Reliance Recoveries) Presents Toolbox 1: Fundamentals of Credit – Part 1.

entering this highly regarded award – Looking forward to the national winner coming from Vic/Tas in 2017!

The council and I look forward to greeting you at a function in 2017.

– Lou Caldararo Vic/Tas Division President

AICM’s Toolbox Series kicks off 2017 with a bang!

Eight keen young credit professionals attended the first of our Fundamentals of Credit Toolbox Series which kicked off with Donna Smith (Reliance Recoveries) presenting Part 1 – The Fundamentals of Credit on 15 February 2017, with Part 2 being delivered by Jeff Hurst (Trade Bureaux Australia) on 1 March 2017.

Our next sessions are Collect with Confidence on 15 March and 29 March 2017, these will be presented by Neil Smith, Credit Manager (Transurban).

We are receiving very positive feedback from the students currently undertaking the program. Students say that the content is current, relevant and interesting and both presenters have been extremely engaging.

Thank you to national sponsor Austral Mercantile for recognising the importance of this credit training and

Victoria/Tasmania AROUND THE STATES

Events Calendar

VICTORIAN EVENTS 10th -13th March 2017

CCE Exam – Online exam 15 March 2017

CCE Breakfast: 24 February 2017 – (Left to Right) Adrian Hunter (Brook Bird) Carole McTavish (Toll) Donna Smith (Reliance Recoveries) Sherif Hussein (REA Group) Charles Tims (Tuftmaster) Amit Jaiswal (REA Group) and Amaran Navaratnam (REA Group).

Credit Toolbox 2 - Collect with Confidence MELBOURNE, VIC

16th March 2017

Network Event - The value of staff reviews 30th March 2017

sponsoring these first two sessions through providing the venue and catering. For those interested there is still time to enroll in Toolbox 2 at the offices of state partner Sharp & Carter, and Toolbox 3 at the offices of national partner Equifax.

The AICM offers a variety of other courses both face-to-face and online for those interested in further educating themselves in the changing realm of credit. Go to the AICM website for information on upcoming events and courses http://aicm.com. au/courses/

Social Networking – Lawn bowls 12 Apr 2017

VIC Toolbox 3 – Understanding credit risk MELBOURNE, VIC

20th April 2017

Full day seminar - The life of a credit customer 20th April 2017

Network Event - Bankruptcy – the process explained

February Network Event CCE Breakfast: ATO changes and what this means For Credit Managers

4th May 2017

A great kick off to our 2017 events calendar with 11 Certified Credit Executives (“CCE’s) attending a delicious breakfast at the Park Hyatt Melbourne 24 February, where Insolvency expert Adrian Hunter from Brooke Bird, delivered on the current and relevant topic of ‘ATO Changes and what this means for Credit Managers’.

Committee Member and CCE Chair Sherif Hussein introduced our speaker and welcomed members to the breakfast and welcomed for the first time newly received CCE’s Amaran Navaratnam (REA Group) and Donna Smith (Reliance Recoveries) who passed their Open Book CCE Exam along with Catrina Galanti (QBE) on 29 November 2016.

Adrian presented an excellent paper on the changes that are afoot within the Australian Taxation Office (“ATO”) and how those changes will impact on credit managers and the industry in general. The ATO have pledged to take more timely action and commence defaulting businesses with tax debts greater than $10,000 who do not engage with them regarding payment of the debt.

The ATO figures show that SME debt continues to be the biggest contributors to our national tax debt and that SME’s and the building and construction industry will be an area of focus in 2017.

If you are interested in becoming a CCE the next open book exams are 10-13th or 17-20th March 2017at the offices of REA Group 511 Church Street, Richmond. Please contact Sherif Hussein if you are interested in becoming a CCE sherif. hussein@rea-group.com.

18th May 2017

Women in Credit Network Breakfast – Customer service 6th June 2017

Half Day Seminar EDX – getting PPSR right Turks Legal – unfair preference defenses 15th June 2017

Network Event - Small debt collections 7th July 2017

CCE Breakfast A breakfast for CCE members

TASMANIAN EVENTS 10th May 2017

Launceston Network Event – PPSR 18th July 2017

Hobart Network Event ATO 19th September 2017

Hobart Network Event Unfair contracts and privacy law

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AROUND THE STATES

Victoria/Tasmania

Members and Guests of Dun & Bradstreet enjoy lunch at the golf day.

Brooke Bird Team: L-R Adrian Hunter, Joyce Gin, Raj Shan and Ross Smith.

Another fabulous turnout at the Vic/Tas 2017 Golf Day.

All kitted up and ready to go.

Vic/Tas Annual Golf Day – FRIDAY 17 FEBRUARY 2017 AICM Vic/Tas Annual Golf Day held on Friday 17 February 2017 was another sellout event this year. The weather gods smiled upon us as the clouds cleared the wind died and another glorious sunny day unfolded for the Best Call Ambrose Competition which kicked off 11:00am at Southern Golf Club in Keysborough.

Practice at the putting greens ensued before members and guests indulged in a delicious Barbeque Lunch sponsored by ALM, with Steak and Sausages supplied by Centreway Steak House in Keilor, with salads prepared and served by Southern Golf Club.

The course was in great condition with the greens running a fast pace. A shot gun start had the players away at about 12:45pm, finishing with a dinner and presentation.

Winners: Simon Strange, Paul Quill, Travis Bockman and Scot Ferguson with a handicap of 9.375 and final score of 52.625 had an amazing day on the course.

Runners Up: Aiden Quinn, Rod Nelson, Jonnie Doherty and Anthony Natsis with a handicap of 9.875 and final score of 54.125.

Third Place: Mark Wenn, Paul Allen, Peter Bradley and Damien Cubela with a handicap of 5.75 and a final score of 54.25.

The NAGA award for our last place getters goes to Danny Ryan, Andrew, Maser, Mavic Audury and Enzo Amato with a handicap of 10 and final score of 70. Our other winners on the day were: Nearest the Pin (“NTP”) 6th Hole – Wayne Everdean, 50

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Prawn BBQ Sponsored by CreditorWatch.

NTP 16th Hole – Lou Caldararo 138cm, Longest Drive (Men) 7th Hole – Andrew Smith, Longest Drive (Ladies) 4th Hole – Merryn Graer, Longest Drive (Ladies) 13th Hole – Natalie Sheriff, Longest Drive (Men) 17th Hole – Luke Young and Straightest Drive 1st Hole – Imran Khan.

Without our fabulous event sponsors the day would just not be possible so our most gracious thanks goes to National Collection Services (Naming Day and Dinner Sponsors), and in no other particular order Equifax, Brooke Bird. ARMA, Advisory Business Solutions, QBE Insurance, Atradius, Melbourne Parkview Hotel, Kemps Peterson, Turks Legal, Mercantile CPA, Sharp & Carter, Rodwells, Doncaster Volkswagen, Euler Hermes, Hall & Willcox, D&B, ARL, Ampac Debt Recovery, Mills Oakley Lawyers, Cor Cordis, KBH Solutions, ALM, Creditor Watch, Ascot

Victoria/Tasmania AROUND THE STATES

AICM TRAINING

– would you like us to come to you?

Does coming into the city for AICM Training Events and Network Nights place a time and financial constraint on your business?

What if we could come to you?

Volkswagen on Show – Hole in One Comp Hole 12 – Sponsored by Doncaster Volkswagen.

If you have a board or meeting room that could accommodate 10–30 people, and you can involve some businesses in your local area, then we want to hear from you.

Such events may be able to be delivered at reduced rates because the overheads of hiring a venue would be eliminated, but we would have to assess the demand.

Contact Donna Smith on the Vic/Tas Committee at dsmith@relrec.com.au if you would be interested in hosting a Network Night or Training Event at your business and we can get the ball rolling.

Members and Guests Listen to the Rules of the Day.

The Australian Institute of Credit Management welcomes our Partners for 2017.

National Partners

Divisional Partners

Prizes galore at the 2017 Vic/Tas Golf Day. Professional Partners

Solicitors, Trade Bureaux Australia, Foremans Business Services, Austral Mercantile, and SPK Glass & Aluminium.

Thank you to all the members and guests who participated on the day and again to our sponsors for your invaluable support, we cannot thank you all enough for your generosity, participation and support of the AICM. Special thanks to Lou Caldararo from (Spicers, President) and Charles Tims (Tuftmaster) and Jeff Hurst (Trade Bureaux Australia, National Director) for outdoing themselves again this year and organising yet another fabulous and successful golf day. If you missed out this time and wish to attend the 2018 or 2019 golf days please express your interest to Charles Tims charles@tuftmaster.com.au as soon as possible as 2018 is almost sold out already, a testament to the popularity of this day.

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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AROUND THE STATES

Western Australia/Northern Territory

Attendees at Christmas drinks enjoying the fabulous venue and night.

Welcome to 2017 This year looks to be promising on all sorts of fronts. I wonder what we will be talking about at the end of the year? The big topics of discussion will no doubt be the juggernaut that is Trump and the ongoing story of Brexit. On the local front our state election is coming up in March. There is a lot of talk as to whether Colin Barnett can hold on to the top job or if he has done his dash, while the opposition leader, Mark McGowan seems to be making the right noises an electorate wants to hear. It will be a fascinating result either way.

With the decline of the boom, money is hard to come by to pay the essentials. Everyone is watching expenses and pushing credit department relationships. Rumour mills are a plenty with all sorts of goss. The ability to sift fact from fiction is essential in these hard times is important. It is for this reason our member events are a good way to network and decipher what is being said around town.

2017 is our year to build on last year’s results.

WA AICM look to provide a good balance of educational and social gatherings to inform and grow our membership; and support industry peers.

WA Council request your attendance at events and encourage you to have other colleague attend or join. I expect we will all learn something at these collaborations and maybe have a little fun along the way. Looking forward to see you all this year.

– Lisa Marr WA Division President

Christmas Celebration On 8 December the WA credit community got together to share a drink and a nibble to reflect on the year gone by. The venue was the South of Perth Yacht Club, situated on the banks of the Swan River, providing spectacular views over the water towards 52

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Lisa Marr presents Rex Matthews with his 25 year service pin.

the city. The event was well attended and the weather played along to ensure a memorable evening. We had a few dolphins try and gate crash, but they were too camera shy for any selfies!

Two awards were given out on the night. Rex Matthews received a pin for 25 years membership and Linda Croft received a pin for 15 years membership. Congratulations to both!

Councillor Profile TROY MULDER MICM Executive Director – Credit Solutions (WA) Pty Ltd Having joined the AICM Council in June 2016, Troy is no stranger to the credit management industry in Western Australia, with over 20 years in the debt collection industry, first with Lauren’s and Munns in the 90’s and then later with Austral Mercantile Collections from 2001 to 2014, where he held senior and national executive roles. After a stint in retail banking, to ‘broaden my experiences’, Troy established Credit Solutions (WA) Pty Ltd in 2016.

A proven and highly trusted credit professional and leader, Troy is a strong supporter of innovation within the debt collection and credit management industry and is passionate about business relationships and consistently delivering quality results not only in collections but in customer service also.

“I joined the Council after over 10 years as a member, as I felt that it was time to make an active contribution to the industry by promoting the Institute, attracting new people to bolster an ageing membership base and helping to foster and mentor the next generation coming through. There is so much potential coming into the industry, and this potential needs the active support of experienced professionals to ensure that we

Western Australia/Northern Territory AROUND THE STATES

Events Calendar

15th March 2017

Networking Breakfast

Economic Update: Including Brexit, Trump and WA Election 9th June 2017

Women in Credit Luncheon 14th July 2017

YCPA Dinner Thank you to our National and State partners who help us have these events.

August 2017

Breakfast club

September 2017

Golf Day October 2017

Breakfast Club December

Goodbye to 2017 Sundowner

The Australian Institute of Credit Management welcomes our Partners for 2017.

National Partners

WA State President Lisa Marr presents 15 year pin to Linda Croft.

retain top quality talent and strengthen the industry into the future.

For me personally, the Institute has allowed me to build a large network of local and national contacts and colleagues, it has provided valuable benchmarking, best practise knowledge, and personal development opportunities but most of all it has given me the opportunity to help shape the future of the Credit Management industry, of which I feel greatly privileged”.

Away from work, Troy enjoys AFL (supporting North Melbourne!), Cricket and sport in general. He can be found spending time with his young family, taking part in the occasional fun run or exercising in the gym. With his extensive experience in the industry, Troy is always willing to network, share his views or present on credit management and debt collection issues. He can be contacted on 0414 820 968 or by email at tmulder@creditsolutions.net.au

Divisional Partners

Official Division Supporting Sponsors

Our National and Divisional 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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AROUND THE STATES

New Members NEW MEMBERS The Institute welcomes the following credit professionals who were recently admitted to membership in December, January and February.

New South Wales

Courtney Guerin

Wyndham Vacation Resorts Asia Pacific

Vanessa Bentley

Equifax

Mark Harley

Boss Lawyers

Cameron Burns

Bureau Van Dijk

Marlene Manava

Wyndham Vacation Resorts Asia Pacific

Andrew Castledine

Equifax

Rhaon Rodrigues

Wyndham Vacation Resorts Asia Pacific

Ryan Christoffersen

Equifax

Nicole Rosenthal

STA Consulting Engineers

Paul Clarke

Trace Personnel

Karina Silcock

National Transport Insurance

Merilynn Condron

Kao Australia Pty Ltd

Gary Thorley

Charter Mercantile Pty Ltd

Kevin Driedger

Benedict Industries Pty Ltd

Monica Dunbar

Benedict Industries Pty Ltd

Peter Hazadonis

–

Benny Kesuma

Bureau Van Dijk

Michael Langford

Bureau Van Dijk

Yunfei Lei

Sydney Markets Credit Service Co-Operative Ltd

Victoria Marie Berard

HTH Group Pty Ltd

Marc-Andre Borloz

C-Cor Broadband Australia Pty Ltd

Beverley Capps

Adecco Group

Lloyd David

National Estate & Property Services

Qing Liu

Bureau Van Dijk

Ian Gale

Adecco Australia Pty Ltd

Claude Maroun

Equifax

Julie Herbette

Adecco

Stephen McKinney

Bureau Van Dijk

Jennifer Ker

Adecco Australia

Maria Michael

Kao Australia Pty Ltd

Rachel Moher

Adecco Group Australia

Jade Mills

Crowe Horwath

Dion Morgan

Ixom Operations Pty Ltd

Marcos Nazur

Kao Australia Pty Ltd

Andrew Paton

Adecco Australia

David Ng

icare Workers Insurance

Diana Pearce

Metcash Supermarkets

Krystle Owen

Transurban

Emma Rakonic

Adecco Group Australia

Sonia Rosenthal

Adecco

Naya Rizwan

REA Group

Aimy Schembri

Transurban

Peter Stojanov

Metcash Pty Ltd

Brittany Smith

Benedict Industries Pty Ltd

Natalie Williams

Australian Pharmaceutical Industries

Christine Verhoeven

icare Workers Insurance

Adrian Wood

Metroll Victoria Pty Ltd

Murugiah Vinayagachelvan Metcash Pty Ltd Paul Vorbach

AcademyGlobal

Helen Warwick

Pro-Collect Pty Ltd

Western Australia Nicholas Gabriel

National Credit Insurance

Kevin McIntyre

Metcash Trading Pty Ltd

Queensland

Wes Smith

Capricorn Society Limited

Te Reinga Beazley

Wyndham Vacation Resorts Asia Pacific

Vivienne Terpkos

Capricorn Society Limited

Bridgitte Brown

Transurban

Kelly Ann Bull

Wyndham Vacation Resorts Asia Pacific

Liam Crawley

Wyndham Vacation Resorts Asia Pacific

Susan Davies

2SG Technology Group

Kim Denyse Clarke

Wyndham Vacation Resorts Asia Pacific

Shane Edwards

Wyndham Vacation Resorts Asia Pacific

Mark Franks

Porchester Group

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CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Unlock the potential in your credit career credit staff

Consider an AICM Qualification course If you aspire to achieve greater heights in your credit career or want to get the best from your credit staff, then a qualification course can help you achieve your targets. Offered nation wide, you can study in your own time (24/7), with support available.

If you have industry experience or prior education, you may be eligible for Recognition of Prior Learning (RPL) credits to fast-track your qualification. If you’re an employer, you may qualify for a training grant. Talk to AICM today to discover your course options.

Diploma of Credit Management

Certificate IV in Credit Management

Certificate III in Mercantile Agents

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

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

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

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

Call 1300 560 996 or vist aicm.com.au

AICM Marketplace Directory of services For information, options and pricing please contact Andrew Le Marchant on +61 2 8317 5052 or E: andrew@aicm.com.au COLLECTIONS AICM Divisional Partner

AMPAC Debt Recovery Level 5, 35 Clarence Street Sydney NSW 2000 Tel: 1300 426 722 Email: info@4ampac.com.au Web: www.4ampac.com.au Trust AMPAC, we guarantee to give you the right advice……

AMPAC provides a complete range of debt recovery and receivables management services to big business, government and thousands of SME’s nationally, so next time you are deciding how to deal with that difficult customer, pick up the phone and call us. We are ready to help you too.

DEBT COLLECTION

INFORMATION

AICM National Partner

AICM National Partner

Austral Payment Management Services

Equifax

Tel: 1300 422 665 Email: info@australmercantile.com.au Web: www.australmercantile.com.au

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

Austral provides complete credit management services and works closely with our clients to understand their business and provide the solutions they require. Our experienced team works hard to deliver a consistently good experience and are always looking for ways to improve processes to help ensure your business has a continuous cash flow. So while we work on helping your debtors stay in the black, you can focus on what you do best and grow your business with confidence.

Equifax powers the financial future of individuals and organisations around the world. Using the combined strength of unique trusted data, technology and innovative analytics, Equifax helps its customers make informed decisions.

Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North, Central and South America, Europe and more recently in the Asia Pacific region, with the acquisition of Veda, a data analytics company and the leading provider of credit information and analysis in Australia and New Zealand.

COLLECTION SYSTEMS AICM Divisional Partner

AICM Divisional Partner

Trade Bureaux Australia Kemps Credit Solutions OnGuard Tel: 1800 123 613 Web: www.onguard.com OnGuard’s Credit management solution will help you hit your collection targets – each and every month.

By working smarter and providing better visibility, OnGuard will help you reduce your DSOs. Why not give your staff a friendly solution that will make their life so much easier.

Contact us to show you how OnGuard has made life a whole lot easier for our customers.

CONSULTANCY

50 Grenfell Street Adelaide 5000 Tel: 08 8418 1450 Email: gcrowder@kemps.com.au Web: www.creditsolutions.net.au/kemps Kemps Credit Solutions. 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 Kemps Credit Solutions has set the benchmark for providing quality collection and recovery services to South Australian businesses and government.

Dun & Bradstreet

Tel: 03 9028 8278 Email: enquiries@edxppsr.com.au Web: www.edxppsr.com.au EDX is the market leader in PPSA consultancy and registration, with over 15 years’ experience in Australia and New Zealand. We have helped hundreds of Australian businesses adjust to the PPSA by providing no-nonsense practical advice, coupled with first class PPSR registration capability and registry management. Whether you have high volumes and need a software solution or simply wish to outsource, EDX has a solution to meet your needs.

56

AICM Divisional Partner

BRI Ferrier Adelaide

Tel: 13 23 33 Web: www.dnb.com.au Established in 1841, Dun & Bradstreet is the world’s leading source of commercial information and insight. Backed by our extensive credit and commercial databases, we help Australian businesses to make informed sales, risk and debt management decisions, and consumers to access personal credit information. Dun & Bradstreet transforms data into complete and actionable business information. Quality data is the foundation for all of critical decisions, whether in sales & marketing, risk management, business growth, debt collection or consumer credit.

CREDIT MANAGEMENT IN AUSTRALIA • March 2017

Trade Bureaux Australia P/L provides secretarial and chairperson facilities for Industry Credit groups within Australia. Operating since March 1998 we are independent and cater for over 25% of the Australian Credit Bureaux market.

Our members work together to strengthen their credit knowledge and reduce their company’s investment in working capital and bad debts.

Contact Jeff Hurst to find out about forming or joining one of our industry groups.

INSOLVENCY

INFORMATION AICM National Partner

EDX

PO Box 473, South Morang VIC 3355 Tel: 03 9303 8900 Email: tba@bigpond.net.au Web: www.tba.net.au

Level 4, 12 Pirie Street Adelaide SA 5000 GPO Box 952, Adelaide SA 5001 Tel: 08 8233 9900 Fax: 08 8211 6644 Web: www.briferrier.com.au BRI Ferrier Adelaide provides recovery, insolvency, advisory and forensic accounting services to businesses throughout South Australia and beyond. We have a wealth of in-house technical expertise as well as the support of our specialist professionals from BRI Ferrier’s unrivalled national and international network.

AICM MARKETPLACE

AICM Marketplace Directory of services For information, options and pricing please contact Andrew Le Marchant on +61 2 8317 5052 or E: andrew@aicm.com.au INSOLVENCY

AICM Divisional Partner

AICM Divisional Partner

AICM Divisional Partner

Vincents

Ferrier Hodgson Level 28, 108 St George’s Terrace Perth WA 6000 Tel: 08 9214 1444 Email: perth@fh.com.au Web: www.fh.com.au As a leading independent financial advisory and restructuring provider, Ferrier Hodgson solves complex problems with commercial solutions.

AICM Divisional Partner

LEGAL

Level 34 Santos Place, 32 Turbot Street Brisbane QLD 4000 Tel: 1300 VINCENTS

(07) 3228 4000 Web: www.vincents.com.au We live in a world of increasing complexities; the need for true expert advice is now more evident than ever. Established for more than 25 years Vincents is an Australian firm of accounting experts and business advisers specialising in assurance & risk advisory, business advisory, corporate advisory, financial advisory, forensic services, and insolvency & reconstruction. Gain insight and take control with Vincents.

AICM Divisional Partner

Results Legal 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.

RECRUITMENT AICM Divisional Partner

FTI Consulting Tel: 08 9321 8533 Web: www.fticonsulting.com FTI Consulting is an independent global business advisory firm dedicated to helping organisations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle – from proactive risk management to the ability to respond rapidly to unexpected events and dynamic environments.

Sharp & Carter

Worrells Suite 1103, Level 11, 147 Pirie Street Adelaide SA 5000 Tel: 08 8214 0500 Email: adelaide@worrells.net.au Web: www.worrells.com.au Worrells is dedicated to solvency management, insolvency administration and forensic investigation. Worrells have been providing high quality corporate and personal insolvency services for over 40 years. We pride ourselves on offering reliable and practical solutions to those burdened with debt. With 24 partners and over 100 staff in 26 locations across Australia we are resourced nationally but focussed locally.

Web: www.sharpandcarter.com.au For any assistance with Credit recruitment, please call Melbourne – Chris Belegrinos on 03 9616 2622 Email: cbelegrinos@sharpandcarter.com.au Sydney – Janine Coppeller on 02 8315 8804 Email: jcoppeller@sharpandcarter.com.au Sharp & Carter will tailor candidate sourcing strategies to suit your company’s needs, taking into account factors such as time frame, budget, level of role and availability of candidates in the market.

We are committed to achieving a successful outcome for every assignment on which we work.

AICM Marketplace - our new initiative Cor Cordis Tel: 03 8320 5600 Email: insol@corcordis.com.au Web: www.corcordis.com.au Cor Cordis was established in 2006 as an independent advisory firm specialising in Corporate and Personal Insolvency. Our clients benefit from the ‘hands on approach’ of our Partners and their extensive experience in a range of industries along with their detailed knowledge of the law and with the support of our young and dynamic professional staff, we are able to manage any sized assignment, irrespective of complexity. The firm has evolved since its origination, including its service proposition.

We are now considered to be one of Australia’s largest leading advisory firms specialising in Turnaround, Restructuring and Insolvency services.

Welcome to our new 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 information, options and pricing please contact Andrew Le Marchant Direct: 61 2 8317 5052, Email: andrew@aicm.com.au or ph 1300 560 996

AICM MARKETPLACE

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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