Credit Management in Australia - March 2020

Volume 27, No 3 March 2020

The Publication for Credit and Financial Professionals

IN AUSTRALIA

PINNACLE AWARDS SUPPORTING MEMBERS FOR SUCCESS IN 2020

– impact of bushfires, mental health, alternative funding options and comprehensive credit reporting

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Contents Volume 27, Number 3 – March 2020

6 8

Message from the President Greg Odlum – Life membership

Credit Management

62 SA: Amy Cooper and Angela Walden (both NCI) and Ryan Osborne (Worrells).

9

ATO’s Disclosure of Business Tax Debts to Credit Reporting Bureaus

By Patrick Coghlan

Our sponsorship and collaboration with Beyond Blue: Let’s have a chat

12

By Andrew Spring

14

e-Invoicing in Australia is now LIVE – what do you need to know today?

64 WA/NT: Camilla Radenti, Troy Mulder, Lisa McNicholas,

By Eric Maisonhaute

Ryan Murray and Raff Di Renzo.

18

What credit professionals should know about the Business Funding Guide

By David Rose

24

Bushfires burn forestry industry’s ability to pay

By Simon Bligh

Consumer Credit

26

Data and Credit Decisions – How data and tech is driving the credit life-cycle with better outcomes for the business and customers

67 Qld: Angela McDonald, Ashleigh Mason, Annette Fabian and Tim Sullivan.

By Elsa Markula

Who has benefited from the introduction of positive credit reporting in Australia?

29

By Andrew Grant

32

Beyond the hype: How cloud and big data are revolutionising credit risk

By Vijay Mehta

Personal Property Security Act Personal Properties Securities Registrations initial expirations one year on

34

Vic/Tas: Victoria/Tasmania division council celebrating a fantastic 2019

By Nicholas Boyce

Legal

71

37

Lodged a Caveat, what’s next?

By Christopher Yam

18 David Rose

26 Elsa Markula

32 Vijay Mehta

37 Christopher Yam

76 NSW: Credit Manager finalist Julie Rojas (Rentokil) award sponsor Robert Lowe (American Express) and Simon Holloway (Holcim).

Contents ISSN 2207-6549

DIRECTORS Trevor Goodwin LICM CCE – Australian President Julie McNamara MICM CCE – Queensland and Australian VP Lou Caldararo LICM CCE – Victoria/Tasmania Rowan McClarty MICM CCE – Western Australia/Northern Territory Gail Crowder MICM – South Australia Peter Morgan MICM CCE – New South Wales Debbie Leo MICM – Consumer

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40

Roger Mendelson

Daniel Turk

40 Mitchell Hay

Building Industry Security of Payment in 2020

By Daniel Turk and Mitchell Hay

PUBLISHER

AICM Training news

Rights to be a Whistleblower & Duty to Report Offences – new laws and new offences

Benefits of gaining a nationally recognised qualification Recent graduates

NSW – Chris Lagana MICM Qld – Carly Rae MICM SA – Clare Venema MICM WA/NT – Jeremy Coote MICM Vic/Tas – Michelle Carruthers MICM

April – June face to face Training Calendar

Pinnacle Awards Introduction New South Wales

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

Queensland

EDITING and PRODUCTION

Division reports

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, 2020.

JOIN US ON LINKEDIN

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

40 42

By Peter Mills

CONTRIBUTING EDITORS

Anthea Vandertouw | Ferncliff Productions Tel: 0408 290 440 | Email: ferncliff1@bigpond.com

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By Roger Mendelson

Nick Pilavidis FICM CCE Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065 PO Box 64, St Leonards NSW 1590 Tel: (02) 8317 5085, Fax: (02) 9906 5686 Email: nick@aicm.com.au

EDITOR/ADVERTISING

Peter Mills

Legal action makes commercial sense if garnishee of wages is a viable enforcement tool

CHIEF EXECUTIVE OFFICER

Nick Pilavidis FICM CCE | Email: nick@aicm.com.au

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South Australia Victoria & Tasmania

South Australia Western Australia Queensland Victoria/Tasmania New South Wales New Members

44 45 46 47 48 52 56 59 62 64 67 71 76 80

Marketplace

For advertising opportunities in Credit Management In Australia

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

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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

From the President

Trevor Goodwin LICM CCE National President

W

elcome to a new decade and

organisations such as AICM. Further

to our first edition of the

details will be announced to members

Credit Management magazine

as we implement the plan, ensuring the

for 2020.

The major news so far this year has been

in future years while strengthening and

the devastating bushfires in parts of Australia,

engaging our membership base, providing

then floods followed by the Coronavirus which

quality education programs and advocacy

is having a major impact on global travel/

submissions to relevant bodies. Having a

finances and the general community. AICM

current strategic plan is crucial for us in

offers sincere condolences to those affected

getting things done and providing great

by the natural and disease borne events and

outcomes for the Institute and members.

for those facing hardship. We also gratefully

Professional development will continue

recognise the brave and tireless work of the

to be a major focus and last year we set up

fire fighters and the charity organisations

the Education Foundation. It is important to

assisting those affected, as well as everyday

ensure our members are appropriately skilled

Australians and generous people around the

and trained to perform their jobs and advance

world through fundraising on social media and

their careers.

charity events.

Meanwhile in the credit world the number

A major event currently being held in all States is the National Insolvency roadshow

of business insolvencies remains high and it

where relevant subjects will be discussed by

seems credit professionals are again in for a

industry specialists. I highly recommend this

challenging year.

seminar to you given the amount of work

More positively, 2020 will be an exciting and busy year for our members based on the calendar that has been set in the various

we have done with ARITA to ensure the best presenters and quality of material available.

The 2020 CCE program commences

divisions. Already we have seen a variety

in March with another sitting to be held in

of education and networking events held in

September. We encourage eligible members

each division and numbers attending these

to consider gaining their CCE qualifications.

functions have been strong. 2020 will also see

So please check in with the National office or

us continue to make further inroads into the

your division CCE councillor to find out what

consumer sector.

you need to do to be eligible.

Currently the Board is establishing a

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relevance and importance of the Institute

The Pinnacle Awards were again

3-year strategy plan for the Institute and on

successfully held in 2019 and it was

February 22nd we held a strategy planning

pleasing to see so many in the credit

day with the assistance of a specialist

profession recognised for their dedication,

external consultant skilled in not for profit

professionalism, outstanding skills and

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

From the President

aicm

“Currently the Board is establishing a 3-year strategy plan for the Institute and on February 22nd we held a strategy planning day with the assistance of a specialist external consultant skilled in not for profit organisations such as AICM.” knowledge. We encourage members to

speak with their employer about the value

consider nominating themselves or colleagues

of your attendance and the learning you

later this year when the 2020 awards will be

can bring back from our quality conference

held.

program.

A major award in 2020 will centre around

I also encourage members to be engaged

the Young Credit Professional Awards which

in the AICM and to continue enhancing their

has been successfully held for many years

career development while also promoting the

attracting the best of our young credit

Institute which is an important vehicle for our

professionals to undertake the challenge.

members and their colleagues. Please look out

Other major awards in 2020 will be Credit

for flyers and:

Team of the Year and Student of the Year.

z Register online and attend events in your

A prestigious event on the AICM calendar is Women in Credit which continues to go

division z Share Credit Management in Australia with

from strength to strength in numbers and

a colleague

quality of venues and speakers. This event is a “not to be missed” in each of our divisions.

Many of our members, including myself, are looking forward to this year’s National

z Establish an employer sponsored membership group z Recommend a colleague for membership z Sit the CCE exam or apply for the YCP and

Conference. At the 2019 conference I

nominate for a Pinnacle award

announced the 2020 conference would be

z Apply to upgrade your membership

held in Sydney. Since then a member’s survey

In conclusion the Institute is holding a

indicated Sydney was not the preferred choice

record number of events in 2020 highlighting

for this year. The Board and National Office

the growth and strength of the Institute

also conducted a financial review with holding

supported by an enthusiastic Board, a

the conference in the Sydney CBD. A decision

dedicated and hard-working National

has now been made to hold the conference

Office and a diverse and passionate team

at the Sofitel Hotel in Brisbane. This long-

of volunteers on our State Councils. We look

awaited return to Brisbane is exciting and I am

forward to seeing you at as many of these

sure we are in for a great conference for both

events as possible.

commercial and consumer credit professionals where we can renew old acquaintances and

– Trevor Goodwin LICM CCE

make new ones. I encourage all members to

National President

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

7

AICM activity

New Life Member

Gregg Odlum

Among the achievements celebrated at the Pinnacle Awards was the presentation of a Life Membership.

Life Membership is presented to members who have made a significant contribution to the AICM and Credit Profession over a long and sustained period.

The latest recipient of AICM Life Membership is Gregg Odlum.

Gregg burst onto the AICM scene in 2010 winning the NSW and National Young Credit Professional of the Year award.

The YCP award led to Gregg serving on the NSW Division Council where he initially focused on mentoring and supporting YCP applicants, something he continues today. It is unique to recognise someone as a Life Member in the same decade as they received an award as a young credit professional but that is testimony to the contributions Gregg has made to the industry. Gregg went on to obtain his Certified Credit Executive status in 2012.

Gregg continues to serve on the NSW Division Council with a focus on supporting the current leadership and mentoring new councillors and credit professionals. He has previously held several positions on the NSW Council including NSW President and in 2014 he became one of the youngest members to be appointed the board of directors.

During his term on the AICM Board he held positions including Vice President and Finance Director.

As Finance Director he played a significant role in many decisions necessary to restore AICM’s financial position whilst increasing member value.

8

A proud CEO Nick Pilavidis welcomes our newest life member Gregg Odlum.

In the nomination for LICM and in celebration of his achievement many commented on his contributions and charter including: z He is a man to always follow through on his commitments. z He never misses a council meeting or board meeting and hasn’t missed many events. z He is also a very active community member with current and past involvement in — Airforce Cadets — A Water skiing club, including running a holiday camp — An avid Lego enthusiast — Goes above and beyond for his credit teams leading social initiatives and championing their professional development z Gregg always commits 100% to any activity he puts his mind to z Highly respected by everyone that

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

has had the pleasure to work with him from the AICM council and board to budding YCP’s and fellow credit managers, z Respected for his ability to provide a comment, view or pose a question at exactly the right time to bring a discussion or decision to a head.

The list of Gregg’s contributions does go on and he has assured us all that the Life Membership does not signify the end of his contributions to the AICM and credit profession.

He remains as passionate as ever to be an ambassador for the profession and a keen advocate of the AICM in supporting development of members’ careers.

Please join with the board and NSW Council to welcome and congratulate Gregg on this wonderful milestone.

Credit Management

ATO’s disclosure of business tax debts to credit reporting bureaus

By Patrick Coghlan* Businesses with significant tax debts will have their information reported to credit reporting bureaus; credit scores will be impacted.

Patrick Coghlan

1. Tax debt information disclosure What is the Taxation Administration (Tax Debt Information Disclosure) Declaration?

In the future, businesses with significant overdue tax debt will have their information become public.

When the Taxation Administration (Tax Debt Information Disclosure) Declaration 2019 comes into effect the ATO will be releasing their tax debt information to registered credit reporting bureaus (CRBs), including CreditorWatch.

In the 2016-2017 Mid-Year Economic and Fiscal Outlook, the government announced its intention to allow the ATO to report tax debt information of certain entities to CRBs. On 19 December 2019, the declaration was made official and the legislation will come into effect later this year.

Currently, the ATO is not authorised to report any tax debt information under the Confidentiality of Taxpayer Information provisions.

This means that credit reports currently do not factor in existing tax debt and provide a limited overview of an entity’s creditworthiness.

With this legislation, there will finally be transparency over

businesses that have excessive tax debt and have not engaged with the ATO to manage their debts.

The default would be visible on a commercial credit report and could negatively affect an entity’s credit score.

2. Transparency of tax debt information Problems with the lack of transparency The lack of transparency about significant tax debts is detrimental to: — Creditors — Employees — Wider community and industry — Government & economy

Creditors When suppliers are unaware that an entity has significant tax debts, they enter into a situation without getting a full picture of that entity’s financial position. It can be detrimental for them to make decisions about providing credit while being oblivious to an entity’s staggering debts.

Currently, a creditor often only realises that their debtor has an overdue tax debt when the ATO takes legal action to recover it and ultimately winds up the debtor. This ➤

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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Credit Management

could result in a domino effect, where the creditor faces cash flow problems themselves as their debtor is forced to shut down leaving the creditor out of pocket.

Employees When an entity is wound up due to its overwhelming tax debts, its employees often don’t receive their entitlements and/or end up losing their jobs suddenly. While this can result in emotional and financial hardship, it could also have been avoided if there had been more warning signs or transparency regarding the tax debt.

Government & economy As of the 2018-2019 financial year, small businesses owe the ATO about $16.5 billion in debt. Tax evasion through illegal phoenix activity is estimated to have an annual direct impact between $2.85 billion and $5.13 billion. When an entity fails to pay their employees, this responsibility

10

falls onto the government (via the Fair Entitlement Guarantee or FEG), which in turn affects all taxpayers.

The government and economy suffer when tax debts are unpaid.

Benefits of Tax Debt Information Disclosure Having more visibility over overdue tax debts will help address these issues.

Creditors Businesses, financial institutions and credit providers will be able to make more informed decisions about the entities they engage with and make more accurate assessments about their creditworthiness. This legislation will empower creditors to take more preventative measures instead of recovery actions and will help to reduce the risk of the domino effect.

Debtors The risk of being exposed places extra pressure on entities with excessive tax debt. They will have

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

to take appropriate actions to avoid being reported by the ATO. This will hopefully encourage entities to engage with the ATO earlier to manage their tax debts. (More on effective engagement in Section 4.)

Industry This legislation will create a fairer playing field between entities that do not comply with their tax obligations and those that do. Companies that ignore their tax obligations operate from a lower cost base and can therefore undercut competitors. Once reported, these companies will face sanctions beyond the ATO – loss of investors and suppliers, significantly reduced credit score, and more.

Economy & Government There will be greater transparency in the supply chain, making it harder for illegal phoenix activity or tax evasion to occur. Ultimately more tax revenue will be returned to the government and less public money paid out via FEG.

Credit Management

3. Releasing tax debt information1

officially released to registered CRBs.

Who will receive this information?

In order to receive tax debt information, the CRB must: — Be registered with the ATO — Enter into an agreement with the ATO about reporting terms

Which entities will be reported?

The ATO can only disclose this information when the following criteria are met: — It has an ABN and is not an excluded entity (i.e. deductible gift recipient, registered charity, government entity, or complying superannuation entity) — It has one or more tax debts, of which at least $100,000 is overdue by more than 90 days — It is not effectively engaging with the ATO to manage its tax debt — The Inspector-General of Taxation (IGT) is not considering an ongoing complaint about the proposed reporting of the entity’s tax debt information

What information will be reported?

If the entity meets the above criteria, the ATO will report to CRBs the following information: — Unique identifiers like their ABN and legal name — Balance of overdue tax debts at the time of initial reporting — Regular updates on the balance of the overdue tax debt until the entity no longer meets the reporting criteria — Notification when the entity no longer meets the reporting criteria

When will this information be reported?

The ATO will give the entity a 21-day notice period before releasing their tax debt information. At the end of the 21 days, if no action has been taken by the entity, the ATO will attempt a final phone call to help the entity address their debt. If this is futile, their information will then be

4. How to prevent your business from being reported – effective engagement with the ATO* If your business is facing a significant tax debt, as long as you effectively engage with the ATO, they won’t be allowed to disclose your tax debt information. To do this, you may either enter into a payment plan or dispute your tax debt.

To avoid or manage existing debt: — Enter a payment plan { The ATO will work with you to create a custom payment plan tailored to your individual circumstances, including your capacity to pay the proposed amounts. Together, you will agree on a plan which can be managed sustainability and address ways to mitigate risks.

You must be compliant with this plan, otherwise you could still be eligible for reporting.

To stop a report from going through, consider one of the following: — Raise an objection and request a review or appeal { Dispute your taxation assessment, determination, notice or decision by lodging a Part IVC objection. { Then, if you are still dissatisfied with the objection outcome, request a review of that decision.

— If you have an active review

with the Administrative Appeals Tribunal (AAT) or appeals to the Courts, you will not be reported by the ATO. — Lodge a complaint with the Inspector General of Taxation (IGT) about your tax debt and the fairness of the ATO’s approach in their dealings with you.

— Contact the ATO to claim and demonstrate exceptional circumstances { The ATO considers exceptional circumstances impacting your ability to pay your debts and you may be able to claim temporary reprieve. This includes family tragedy, serious illness, natural disaster impacts and other circumstances.

CreditorWatch has been working with the ATO since 2014 to plan and design this legislation. We are proud to see it come into effect and are confident in its ability to assist companies to better assess credit risk and reduce bad debt.

1 The ATO is currently in the design phase so the above information is subject to change.

CreditorWatch will continue to provide updates as it progresses.

*Patrick Coghlan MICM CEO, CreditorWatch Ph: 1300 50 13 12 www.creditorwatch.com.au

Did you know? In 2018 – 2019… l The ATO received 19,826 complaints (inclusive of IGTO complaints) l The ATO resolved more than 26,000 objections (up from 24,350 objections the year before) l There were 441 applications for review or appeal to the AAT or other courts https://www.abc.net.au/news/2019-10-24/ato-debt-book-grows-to-2445b-in-australia/11633312

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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Credit Management

Our sponsorship and collaboration with Beyond Blue: Let’s have a chat

By Andrew Spring*

Andrew Spring

12

I must be getting older, because the years definitely feel shorter. Work, children, chores, work, friends, birthdays, work trips, school duties, volunteering, kids’ sports, work … where does the time go? And let me just say, I love it all, but sometimes I feel like a circus performer with lots of balls in the air, frantically trying to keep them all up, and therefore never truly being able to focus on one of them.

So when, as a firm, we took some time out to take stock of each of our “work/life” balances, we realised that a lot of our stress came from our own choices. This created an interesting realisation that began a shifting of mindset: if we can create our own stress (positive and negative), then certainly we can control those stresses. Trying to focus on one juggling ball would only result in dropping them all, but what if you could continue to juggle all the balls in slow motion?

There has been a lot of effort to begin conversations about mental health and well-being in the public domain recently. And I would strongly encourage the conversation to continue. However, the concept still carries a lot of negative stigma. Until very recently, I consciously wore

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

a mask behind which I would hide my feelings, emotions and stresses from the outside world and myself – because that’s what Dad and Grandpa did. Isn’t that what it means to be a “man”? Recent debate in the public forum hopefully means that a lot of us are starting to realise that the concept of hiding how we are feeling negatively impacts more than our own lives. And with statistics, released by Beyond Blue, revealing that one in six Australians are currently experiencing depression or anxiety or both, it is likely that we are or someone we know are engaged in this battle right now.

Recently I experienced, through an insolvency appointment, the devastating effect that depression can have on a family, community and business. Early last year, I was asked to assist with the winding up of a business’s affairs after the sole director took his own life. A young man with a wife and three young children. Approached by one of his family friends, it was apparent how many people were affected by this tragedy. But upon reflection, it also seemed so unfathomable that he was unable to see how strong a support network was available to him. Since then I have learned,

Credit Management

somewhat shockingly, how the “black dog” can compel the mind into utterly irrational thoughts and behaviours. However, I have also learnt that depression, like a lot of mental illness, is a fluid state of mind and can be treated.

Driven by a desire to do more to help clients suffering mental ill-health and offer improved support for our employees exposed to ‘second-hand’ stress, we turned to Beyond Blue to help create a dynamic new mental health program.

During the last six months, we have undertaken a number of initiatives to help slow the juggling balls, taking the time to notice our behaviours and that of those around us. The public conversation is great for awareness, but how do you recognise the symptoms in your universe and then what can you do about it?

Through the use of Mental Health Awareness seminars, the Mental Health First Aid certificate and Walk and Talk “Netwalking” tours of Sydney, Newcastle, Brisbane, Melbourne and Perth, we were able to engage with our colleagues and clients in a new way. Unlike physical injuries, the signs of mental health are not as obvious and likewise, neither are the remedies. But, conversely, you don’t need to be a doctor to make a difference. I have learnt that a simple question like “Are you OK?” can have an enormous impact.

The challenge for us all is to notice the signs and take action (including self-acknowledgment).

Mental Health First Aid Australia, suggests the following action plan (“AL-GEE”): A – Approach the person, assess and assist with any crisis; L – Listen and communicate non-judgementally; G – Give support and information; E – Encourage the person to get the appropriate professional help E – Encourage other supports

“Driven by a desire to do more to help clients suffering mental ill-health and offer improved support for our employees exposed to ‘second-hand’ stress, we turned to Beyond Blue to help create a dynamic new mental health program.”

The example provided earlier resulted in the business closing. This meant loss of employment, bad debt for creditors, clients being exposed to overruns and losses and the forfeiture of 20 years of goodwill and shareholder value. The fallout for each of the stakeholders will have a negative financial impact. However, the human element within business came to the fore, with all parties understanding the traumatic nature of the circumstances, pulling together to get through the process. The insolvency process ran smoothly, but the situation and outcome is one that I hope never to have to repeat.

Credit professionals, like insolvency professionals, are at times on the front line of business distress.

But this puts us in a position to offer

support. Through our initiatives I have learnt that often the first person to notice behavioural changes is not a family member. So taking the time to slow the juggling balls, I hope that we may just be able to avert a catastrophe.

I would encourage all members to begin the conversation within their own businesses. And I would be more than happy to discuss our experiences in further detail, with any member, to help start that conversation.

Beyond Blue 1300 22 4636 Lifeline 13 11 14

*Andrew Spring MICM Partner Jirsch Sutherland Ph: 1300 265 753

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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Credit Management

e-Invoicing in Australia is now LIVE – what do you need to know today?

By Eric Maisonhaute*

Eric Maisonhaute

14

Lessons learned from Europe and Latin America Moving to e-Invoicing is no longer an option for businesses, it is becoming an obligation. Propelled by the goal of preventing tax evasion, mandatory e-Invoicing legislation is on the rise globally, driving the transition from paper to electronic invoicing and archiving.

Latin America was the first to enforce the use of e-Invoicing in the late 2000s, using the clearance tax audit system (real-time invoice verification by the local tax authority).

In Europe, the EU Directive on e-Invoicing and public procurement was put in place to make e-Invoicing the predominant method of invoicing in Europe in the coming years.

To support this directive, many governments introduced legislation requiring vendors to send e-Invoices to all Public Administrations (PA).

Italy has gone even further to become the first European member state to mandate B2B and B2C e-Invoicing for Italian businesses. Other European states seem willing to follow this lead.

The growing number of governments and corporations adopting e-Invoicing means that companies need to send e-Invoices if they want to do

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

business and get paid. However, the increasing number of rules, formats, platforms and certificates brings a lot of complexity to compliance.

Additionally, the time from when the requirement is published, to the deadline for businesses to comply is very short, while the number of regulations continues to grow.

e-Invoicing in Australia and New Zealand In October 2018, the Australian and New Zealand governments agreed to take practical action around common approaches to e-Invoicing with the Trans-Tasman Electronic Invoicing Arrangement. The main objective of the Arrangement is to create a seamless Australia and New Zealand e-Invoicing approach in order to improve productivity and reduce the costs of doing business for both governments and industries through an interoperable single digital economic market.

The initial idea was to leverage the work from the Australian Digital Business Council who had previously worked on an interoperability framework and extend the specifications to include New Zealand requirements. However, as this model was very similar to

Credit Management

Diagram presenting the PEPPOL’s 4-corner model where the sender and receiver exchange documents that follow standard specifications via Access Points connected to PEPPOL.

the Pan-European Public Procurement Online (PEPPOL) 4-corner model, the Australian and New Zealand Prime Ministers announced in February 2019 that both countries intended to adopt the PEPPOL interoperability framework for e-Invoicing. The PEPPOL framework is used in over 34 countries and is increasingly being adopted worldwide, helping to support international trade.

Both the Australian Taxation Office (ATO) and the New Zealand Ministry of Business, Innovation and Employment (MBIE) became PEPPOL Authorities and already developed local invoice specifications based on the PEPPOL BIS Billing 3.0 standard, an Electronic Data Interchange (EDI) standard format.

Although Australia and New Zealand have separate PEPPOL Authorities, the functions and technical support activities have been aligned to support one another.

There is already a number of Access Points accredited by ATO and MBIE and the first e-Invoices have been exchanged on the PEPPOL ANZ network in March 2020.

“The PEPPOL framework is used in over 34 countries and is increasingly being adopted worldwide, helping to support international trade.”

There is currently no mandate in Australia or New Zealand to enforce e-Invoicing via PEPPOL. But history has shown in some other countries that e-Invoicing has become a mandate after a few years, initially for B2G then extended to B2B. For now, the Australian and New Zealand governments are putting forward some incentives for broader adoption locally.

For example, the Australian government has announced its commitment to pay all e-Invoices under $1 million within 5 working days from 1 January, 2020. The Department of Finance and Services as well as Services Australia were to be the first government departments to adopt PEPPOL e-Invoicing with other agencies implementing over 2020.

The Australian government is aiming to further develop the use

of PEPPOL and might continue to introduce incentives for suppliers over the coming months. Businesses, more specifically SMEs, will see immediate benefits such as faster payment from government agencies, reduced manual work and added value to the customer experience.

What is e-Invoicing?

Just to clarify what we are talking about, an e-Invoice is a data file exchanged between businesses (system to system) in a commonly agreed upon electronic format and not always human readable. Data manually typed into a web portal to automatically generate an invoice is also considered a e-Invoicing. The main benefit is that e-Invoicing allows full automation with a smooth and secure exchange of messages between companies, making ➤

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documents computer readable so it is easier to automatically book in a financial system without manual intervention. This boosts efficiency, simplifies transactions and increases cost savings. “GET PAID FASTER!” There are many different formats for e-Invoicing but the most common file formats are based on XML or EDI, however a global standard is currently missing.

EDI has been a popular standard for a long time and a growing list of governments worldwide have selected UBL (an XML based format) as its preferred format.

There is a increasing focus to standardise public procurement and simplify document exchanges including e-Invoices between companies and public entities.

One great example is PEPPOL that Australia and New Zealand have just adopted as mentioned above and that provides a set of specifications enabling businesses to communicate electronically with public buyers and private businesses, not only for e-Invoicing but in various stages of the e-procurement process.

What about PDF invoices?

Aren’t they electronic?

In this context, a PDF invoice is in fact not considered as an e-Invoice but rather a digital invoice that can be viewed and processed digitally.

A scanned paper invoice also falls into this category as well. The digital invoice is easy to archive and connect to accounting software but will typically require manual data input

must be available in a human readable format for accounts receivable (AR) and accounts payable (AP) departments to validate it. Even in the case where governments have mandated electronic invoices, it is still required to generate a humanreadable format (PDF) along with the e-Invoice data so that the e-Invoice itself can be processed by the computer and the humanreadable version can be visualised and understood by a human person. Increasingly for businesses to be successful and soon compliant, they must do both EDI and PDF.

e-Invoicing on the rise

from an administrator or an OCRbased automation solution to book the invoice in the buyer›s financial system.

Until now, it has been possible for businesses to send and receive image based PDF invoices by email (with or without e-signatures); however, with growing government legislation mandating structured electronic invoice exchange worldwide, PDFs are no longer sufficient. Businesses must generate and manage structured invoice data for all outbound and inbound invoices to remain compliant and to get paid.

But exchanging EDI-only files may not be suitable for all businesses.

Small and medium businesses often struggle to manage EDI, whereas PDFs can easily be created from most ERP systems. Additionally, for companies of all sizes, invoice content

“Overall, I believe e-Invoicing volumes will grow each year for the next five years: 15% in Europe, 20% in North America and 25% in Asia.

I foresee very strong growth rates, and I expect to see a positive impact from all these business-to government initiatives in the private sector.” Bruno Koch, Billentis.

The private sector was the main driver for initial market development of EDI due to its incredible efficiency.

Big businesses were the first to encourage their partners to send or receive EDI invoices while today, governments are increasingly requiring it.

As more and more companies replace their costly paper-based invoice processes with less expensive and more efficient e-Invoicing delivery and archiving solutions, they are discovering new ways to help increase their competitive advantage and business efficiency (e.g., reduced

“There are many different formats for e-invoicing but the most common file formats are based on XML or EDI, however a global standard is currently missing. EDI has been a popular standard for a long time and a growing list of governments worldwide has selected UBL (an XML based format) as its preferred format.”

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Credit Management

Clearance model: Invoices must be reported and authorised by the tax administration before or during the exchange process between the supplier and the buyer. This helps reduce VAT fraud allowing them to monitor end-to-end business transactions. invoice-related errors, time and cost savings, faster payment, etc.).

Some governments push EDI to digitise B2B exchanges and increase productivity. EDI-invoicing has become a legislative obligation for tax control in some countries. Reducing the VAT/GST leakage is the main accelerator for the digitisation of business, fiscal, reporting, inventory, trade and logistical documents. Tax authorities mandate that businesses in a country exchange invoices in EDI format and encourage or even require the use of a real-time clearance model.

While e-Invoicing is beginning to realise its potential, one of the reasons it has not been widely adopted so far is the confusion around aforementioned tax compliance.

Can a single e-Invoicing solution help achieve global WW compliance?

Companies that rely on multiple service providers to ensure e-Invoicing compliance in different countries find it difficult to meet strict local specifications and manage numerous service providers. Selecting the most suitable solution is a challenge. Indeed the most suitable solution needs to

“While e-invoicing is beginning to realise its potential, one of the reasons it has not been widely adopted so far is the confusion around aforementioned tax compliance.” address needs and requirements from legal, business process, technical and commercial aspects. Here are the five key points to consider: z Increase visibility: An international organisation, located in multiple countries, requires a solution that provides visibility over all invoices worldwide as well as on a subsidiary or entity-level. Multiuser solution access improves collaboration among AR teams. z Compliance with local regulations: Businesses must comply with different e-Invoicing regulations in the countries in which they do business to avoid penalties, either by formatting their invoices into EDI format or finding a way to be connected with tax authorities’ platforms to submit their invoices (e.g., PEPPOL). z Anticipate future mandates: As e-Invoicing regulations continue to

evolve, businesses need to ensure that they are up to date on new requirements and able to quickly respond to changes. z Improve internal processes: Companies are always looking to speed up internal processes and improve team productivity, particularly in AR and AP processes. By automating these processes, businesses can manage 100% of invoices regardless of format, reduce errors and costs associated with manual handling, and lower DSO. z Enhanced user experience: Solution user adoption rates are greater when only one solution is used.

*Eric Maisonhaute MICM Director – Accounts Receivable Solutions Esker Australia Pty Ltd Ph: +61 2 8596 5126 Email: eric.maisonhaute@esker.com.au www.esker.com.au

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

17

Credit Management

What credit professionals should know about the Business Funding Guide Scottish Pacific and ASBFEO have created a free guide to business funding, which credit professionals can download and share, to help Australian businesses get “finance fit”.

By David Rose*

David Rose

18

Credit professionals can play a vital role in helping to improve Australian businesses’ access to funding.

They are well placed to start a conversation with SME owners about whether businesses are being funded in a way that optimises cash flow and allows for successful growth.

One way they can do this is by being aware of, and helping spread the word about, an independent funding guide for SMEs and their advisers, created as a collaboration between the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) and Scottish Pacific.

At the launch of the guide, Ombudsman Kate Carnell said she believes that the biggest barrier to small business growth is access to finance.

ASBFEO and Scottish Pacific’s aim was to create an independent and free guide that provides information about a wide range of funding options

available to SMEs, including a step-bystep pathway to becoming “finance fit” so they have the best chance at securing funding.

The Ombudsman says the SME sector, the engine room of the economy, needs to prove credit worthiness by working with their trusted advisers to get their business finance-ready. She says SMEs would benefit from being able to produce a comprehensive business case for why they would be a good investment.

Around one third of small business owners have bank loan applications rejected. Many more don’t even bother to apply, as they’ve been told that unless they have significant equity in real estate their application will fail. It’s important for SMEs to realise the big four banks are not the only options.

Business owners looking to grow need to consider a wide range of funding options to find the one

“Around one third of small business owners have bank loan applications rejected. ... It’s important for SMEs to realise the big four banks are not the only options.”

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Credit Management

➤

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

19

Credit Management

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Credit Management

that best suits their situation. This includes options that are not linked to personal property.

The Business Funding Guide (a comprehensive version, targeted at SME advisers) has a compact companion – the FitsME – Essential Guide to Business Funding which is a shorter version that gives timepoor business operators the most important information they need to know about becoming “finance fit”.

Both are available as free downloads. The following sections share some of the information available (in more detail) in the Business Funding Guide and FitsME Guide.

FitsME Essential Guide to Business Funding Ready Prep Go!

Finding the right funding option for your business needs

“a business owner having all their commitments in a simply outlined document can help with funding applications.”

Steps to take before applying for funding Encouraging an SME to identify why they need funding will help solidify which funding options might work best for them. Ask them: are they turning away new business, wanting to expand, reached current funding limits, unable to meet their ATO and superannuation commitments, or dealing with slow paying debtors?

Different types of funding will be appropriate depending on their situation, stage in the business life cycle and what’s important to them at the time.

Eight key actions an SME can take in this pre-application stage include: 1. Separate personal and business accounts: this will provide lenders and investors a clearer picture of the SME’s financial position.

Online lenders rely on algorithms and technology to assess each application, so it is crucial that owners separate personal and business accounts.

2. Tidy up the books: generate EBITDA, P&L, balance sheet and cash flow statements and isolate any one-off or extraordinary expenses. These financial reports are what a lender will use to assess if a business can repay funds borrowed.

Peter Langham (Scottish Pacific), Kate Carnell (Small Business and Family Enterprise Ombudsman), Susan Franks and Michael Croker (both Chartered Accountants Australia and New Zealand) 3. Check bank statements: bank lenders look closely at these.

Ideally, have at least six months of minimal discretionary spending and be clear of negatives such as being overdrawn.

4. Understand the tax portal: a lender may check if the business is up-to-date with its tax obligations. A business with a clean tax portal report showing commitments are paid on time will have much more success getting funding than a business with a poor tax payment position.

While the business may have

entered a payment plan with the ATO to manage cash flow, lenders such as traditional banks may see this as the business being unable to meet its key obligations.

5. List financial commitments: a business owner having all their commitments in a simply outlined document can help with funding applications.

6. Get a credit report: there are online providers who can supply credit reports for free (if applicant is willing to wait a week) or for around $100 (to receive ➤

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

21

Credit Management

information same day). This credit report also shows Personal Property Securities Register (PPSR) information, which might include old and expired equipment leasing data that should be updated.

7. Create a list of assets: sometimes a business will think it has nothing to use as security. By listing every piece of equipment, tools, and furniture (the ones they often forget to claim a depreciation on), you’ll get a clearer picture.

8. Carefully check PPSR: undertake a search of the PPSR register – because every lender will – and prepare a statement showing the reason for any registrations. This will identify what parts of the business can be used as security against lending.

Out of date or incorrect entries can impact a SME’s credit

application and limit the security they offer another lender. Any out of date registrations should be corrected to give an accurate picture of a business. You can seek legal assistance or see https:// www.ppsr.gov.au/how-disputeregistration.

Key questions for finding finance It’s important for business owners to understand what type of finance is best for their stage of business (early, developing, mature, sophisticated), industry, business model or their need (short-term or ongoing) and what, if any, security they have to offer.

Where they sit with these key markers will open up or close off various funding options.

Within the Business Funding Guide, the Funding Matrix and Funding Decision Flowchart outline funding solutions relevant for a range of business situations.

Some key criteria will help

determine the best source of finance for your client.

Asking the trigger questions below (which are expanded on in detail in the Business Funding Guide, including advantages and potential pitfalls of each funding option) will help an SME come to the right decision: — Debt or equity?

— Secured or unsecured?

— Line of credit or fixed term loan?

— Banks or non-bank lenders?

Helpful scenarios for finding funding The Business Funding Guide includes a number of scenarios that look more closely at typical business situations (for example: start-ups, equipment failure, major business opportunity, cashflow stress and buying out a partner) and steps the reader through the process of what finance works best.

Here is one sample scenario, please see the guide for more:

SCENARIO: Funding needs change as a business evolves Georgia and Kat are launching an upmarket chocolate business. They need more than their own funds for shop fit-out and to cover set-up costs. Their best options starting out are equity (most likely a loan from family and friends) and equipment finance/leasing which would save them from having to make expensive upfront outlays on essential business purchases.

One year on and business is booming, but they’ve learnt they need extra funding in the leadup to their four busiest periods (Easter, Valentine’s Day, Mother’s Day and Christmas make up more than 60% of annual sales).

Their logical options are a seasonal overdraft (providing purchasing power to fulfil orders just during their busy times, as cash flow is manageable at other times) with the backup of a business credit card (they can access credit for a short period before they’d pay interest, to help get through each busy period).

Another year goes by and sales have increased to the point they are struggling to keep up with demand and need more equipment. They find their ideal equipment that will be sold for cash at a liquidator’s auction in three days’ time – they have to move fast. An amortising term loan could be the go, and they are likely to get it quicker from an online small business lender (fintech) than from a bank. Or they may be able to borrow from family or friends or use a business credit card.

Five years down the track Kat wants to start a new venture, so Georgia agrees to pay her out over a two-year period. An amortising term loan to match the cash flow forecast of the business is a good option.

The chocolates have attracted the attention of a multinational retailer who wants to order large volumes – but their terms are 30 days minimum. Georgia’s best ways to boost borrowing power are the secured options of invoice finance (also known as debtor finance) – funding secured by invoices, that gives her access to funds before the retailer pays invoices or an overdraft (secured by her family home).

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Credit Management

The right funding can assist with cash flow A business struggling with cash flow can only stretch working capital so far before something has to give.

If SMEs don’t find a way to deal with their ongoing cash flow issues, Australia’s growth potential will continue to be constrained.

Results from the latest Scottish Pacific SME Growth Index show one in five SMEs experience cash flow problems due to business loans being rejected.

According to the data, the percentage of SMEs reporting significantly worse cash flow has doubled since March 2018, with 7.3% saying it is significantly worse and 12.3% saying it is worse than the previous year.

The fact that one in five businesses is struggling with cash flow because they’ve had business funding rejected is a massive wake up call to SMEs and their advisors to make sure they are funding their business in a way that optimises cash flow.

This is one of the key issues that Scottish Pacific, in partnership with

“Results from the latest Scottish Pacific SME Growth Index show one in five SMEs experience cash flow problems due to business loans being rejected.” the Australian Small Business and Family Enterprise Ombudsman, seeks to address, with the Business Funding Guide outlining a wide range of funding options suitable for different small business needs.

We’d encourage all credit professionals to download the guide (links below) and familiarise themselves with it.

*David Rose Chief Financial Officer rosed@scottishpacific.com Ph: 1300 177 496 Scottish Pacific is Australasia’s largest specialist working capital provider, helping thousands of business owners with the working capital they need to succeed.

The Business Funding Guide, targeted at advisors such as accountants, brokers, book-keepers and credit professionals, and the FitsME Guide, its short companion for business owners, are both available as free downloads.

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To find out how we can assist you and your clients, contact us today.

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March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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Credit Management

Bushfires burn forestry industry’s ability to pay

By Simon Bligh* New evidence has emerged of the economic impact of this summer’s devastating bushfires, with the time taken by forestry companies to pay their bills more than doubling, according to latest illion Australian Late Payments Report.

In an analysis of Australia’s 15 key industries, eight sectors paid their bills quicker than they had in the past, while seven others required their suppliers to wait longer.

This suggests Australia could have a hidden two-speed economy, with some sectors doing well while others are burdened by emerging cash-flow problems.

Of particular note was the time taken by forestry companies to pay

Simon Bligh

24

their suppliers, which blew out by 114 per cent in December 2019, compared with the corresponding period in 2018.

Ironically, despite the blowout, the forestry industry remains the most reliable bill paying sector in the nation.

Overall, late payments across the nation improved by 7 per cent year-on-year from 11 days to 10 days, reflecting overall improved

trading conditions and industry and government pressure to cut payment times.

The report’s findings underscore the devastation caused by this summer’s bushfires, particularly on the east coast.

Our report puts some hard numbers around just how bad the bushfires have been and quantifies the pain being experienced by affected

TABLE 1: Year-on-year late payment days and percentage change by industry

INDUSTRY

Dec ‘18

Dec ‘19

% Change

1

Mining

12.2

13.0

7%

2

Retail Trade

15.1

12.8

-15%

3

Manufacturing

11.4

11.7

3%

4

Electric, Gas & Sanitary Services

13.4

10.8

20%

5

Communications

9.8

10.8

10%

6

Wholesale Trade

10.2

10.7

4%

7

Unknown

10.8

10.0

-8%

8

Public Administration

10.3

9.4

9%

AVERAGE

10.7

9.9

-7%

9

Construction

9.4

9.9

5%

10

Finance, Insurance & Real Estate

9.9

8.9

-10%

11

Fishing

10.4

8.7

-17%

12

Services

9.4

8.6

-9%

13

Transportation

9.4

8.8

-7%

14

Agriculture

7.6

8.3

9%

15

Forestry

3.8

8.0

114%

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Credit Management

businesses that are now struggling to pay their bills.

It has been a season of outliers and extremes. Despite the declines from the forestry industry, the performance of other sectors such as retail has been extremely positive.

Overall, Australian businesses have delivered the best result since we began this report in 2011, with the December 2019 quarter representing the first time Australian businesses have gone below 10 days late payment during the Christmas holiday season.

Suppliers to Australia’s mining, retail trade, manufacturing and electrical industries had to wait longest of any industry to be paid, although some of those sectors such as retail trade and electrical had improved in the last 12 months.

The retail industry experienced a relatively positive Christmas quarter, with late payments declining by 15 per cent compared with the prior year. illion Senior Economist Stephen Koukoulas believes the construction industry was a key indicator for the broader economy.

The construction sector has been hit by weak dwelling investment activity and is likely to remain weak until there is a material lift in investment activity.

ACT the most improved but Tasmania slips Comparing payment patterns across the country, Tasmanian businesses remain the most reliable payers, taking just eight days to pay their overdue bills, while firms in the Northern Territory are relative laggards, at 11 days.

Canberrans showed the most improved payment times with a reduction of 14 per cent from 12 days to 10 days. Victoria and Queensland followed, with late payment times improving by 10 per cent and 9 per cent to 10 days.

Mr Koukoulas interprets the ACT’s strong performance is in part because of policy changes by State

TABLE 2: Year-on-year average late payment days by states/territory State/Territory

Dec ‘18

Dec ‘19

% Change

Northern Territory

11.2

10.8

-3%

Western Australia

10.7

10.5

-2%

New South Wales

10.9

10.3

-6%

ACT

11.7

10.1

-14%

Victoria

11.0

9.9

-10%

NATIONAL AVERAGE

10.5

9.9

-6%

South Australia

10.7

9.8

-8%

Queensland

10.3

9.3

-9%

Tasmania

7.5

8.1

7%

and Federal governments that have resulted in streamlined payments processes between governments and their suppliers.

For example, the Federal Government has introduced an e-invoicing policy, which means the Federal Government must pay small suppliers within 5 days or pay penalty interest1.

Combined with further interest rate reductions and an increased use of electronic payments systems, government initiatives to streamline payment to suppliers are paying off.

This is particularly so in the ACT, where a large number of businesses are suppliers to the Federal Government.

Big businesses remain worse payers Stricter payment conditions have likely contributed to the reduction in late payments overall but big businesses remain the worst offenders – taking 14 days to pay their late bills.

In comparison, small businesses only take 11 days to settle their debts.

Small businesses are rightly demanding prompt payments and are fed up of playing bank for bigger firms. The Federal Government may respond to their demands by possibly legislating and enforcing new payment rules.

TABLE 3: Average late payment days by business size Business size

Late Days

Big to big

14.0

Big to small

13.5

Small to big

11.8

Small to small

10.8

*Simon Bligh CEO, illion Ph: 13 23 33 FOOTNOTES: 1 https://www.afr.com/policy/economy/ government-to-pay-smes-in-five-days20191106-p537wj ABOUT THE REPORT: Late Payments analyses trade information from illion’s Commercial Bureau, the largest database of business-to-business payment information in Australia and New Zealand.

Monthly trade transaction files are collated and advanced analytics used to provide a summary of how late entities pay for goods and services after payment is due.

Late Payments provides a quarterly report with a breakdown according to sector, size, age and location of entities. Business-tobusiness payment information reveals how an organisation is paying its existing obligations.

It is a highly predictive data set and a critical element in credit risk scores and business failures forecasting. The predictive nature of trade data combined with its monthly availability enables businesses to properly assess credit risk with real time information.

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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Consumer Credit

Data and credit decisions How data and tech is driving the credit life-cycle with better outcomes for the business and customers

By Elsa Markula*

Reforms enabling the introduction and sharing of comprehensive credit reporting (CCR) data, and open banking data are reshaping credit origination and management in Australia. Alongside these reforms is a need for greater accountability in data use, as well as a need to ensure that the customer experience is enhanced by data, rather than impaired.

ARCA recently tackled these issues in a panel session run at the AICM conference, and with input provided by a team of data experts, including Chris Irwin from Bank of Queensland, Darren Tran from Moneyplace and Troy Mulder from Alinta Energy.

Impacts of different data on origination and management

Elsa Markula

26

There is a range of new data available for use in credit origination and management. CCR data has been a game-changer in the credit reporting space. Traditionally credit reports included only negative information, about payment defaults, credit enquiries and judgments. CCR data

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

now means that a credit file includes an individuals’ credit accounts (including those closed within the past 2 years) as well as repayment history for those accounts.

Open banking will expand the data available to lenders even further, with the consumer data right enabling lenders to access transaction records for customers, although only with consent.

While there is overlap between CCR data and open banking data, it is also important to understand the key differences between the two when using the data to assess a consumer’s loan application, as set out in Figure 1.

In non-financial sectors, such as the utility sector, over the coming years there is the prospect of greater utilisation of both of these types of data. Utility providers can access CCR credit account data, although not the repayment history, and, with the extension of the consumer data right beyond financial services, it will also mean the sharing of consumer utility account data.

In the financial sector, lenders such as Moneyplace have already observed

Consumer Credit

Elsa Markula (ARCA), Chris Irwin (Bank of Queensland), Darren Tran (Moneyplace) and Troy Mulder (Alinta Energy).

the positive impacts of CCR data on credit origination. For example, Moneyplace has seen examples of customer applications where, relying on a negative credit report, the customer scores highly. However, the information for that same customer from a CCR credit report reveals a completely different story; with CCR showing at least 3 credit card accounts all of which are seriously overdue.

Is all data useful?

In recent years focus has also been directed to the use of alternative data, and funnelling this data to aid credit management. In the United States, for instance, the use of alternative data such as rental payment data has aided financial inclusion, particularly for customers who would previously have been excluded from mainstream credit. In many Asian countries, the majority of the population is “unbanked”, and hence alternative data is the only option for use in credit assessment.

However, not all data is necessarily useful. When collecting data, it is

“In the United States, for instance, the use of alternative data such as rental payment data has aided financial inclusion, particularly for customers who would previously have been excluded from mainstream credit.” important not to lose sight of the fundamentals. Data collected should provide a direct insight into an individuals’ creditworthiness, whilst also respecting an individual’s right to privacy. For example, if obtaining transaction data for an individual, using this data to give an insight into broad categories of spending by the individual is appropriate and should provide an insight into whether there is any type of spending which may warrant further inquiry. However, analysing each individual transaction may prove resource intensive, an unnecessary incursion into the customers’ privacy, and ultimately providing an outcome which could otherwise be obtained through less intrusive data analysis.

In the background, organisations must also be mindful that the legal framework in the Privacy Act for access to data imposes accountability for use of that data. If an organisation accesses data, then it must use that data.

Customer experience and engagement To succeed in the use of data for credit origination and management, organisations must keep customers front and centre. How can the use of data be something that is understood by customers? What steps can be taken to ensure that integrating data into credit management enhances rather than undermines the customer experience and engagement? ➤

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Consumer Credit

FIGURE 1

CREDIT REPORTING

OPEN BANKING

Comprehensive BUSINESS right to consumer credit information

Comprehensive CONSUMER right to their own information

Consumer informed before sharing

Requires consumer express consent to share

Credit accounts

All accounts

“100%” coverage Access only by credit providers and ‘access users’ Limited uses for data accessed

Coverage depends on consent

Access by accredited entities

Use only limited by customer and their consent

FIGURE 2

CONSUMER AWARENESS CREDIT REPORTING LITERACY IS LOW

Aware credit report is access when apply for a loan NO 31%

YES 69%

Have ever checked credit report NO 57%

YES 43%

Aware credit reporting changing due to CCR NO 72%

YES 28% ARCA YOUGOV RESEARCH MARCH 2019

These are not necessarily easy issues to solve, as customer awareness of data has not matched pace with the reform. Research for ARCA by YouGov conducted in March 2019 has demonstrated that customer awareness of credit reporting remains low. Figure 2 demonstrates.

Organisations such as Moneyplace have already observed that active efforts to educate and engage customers have improved the overall

28

customer experience. Moreover, customers who have granted access to their data have done so on the basis that they expect, in return, a speedy and improved credit origination process.

Impact of data on an organisation and its competitiveness For organisations embarking on the use of data for credit management,

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

the key to success is to ensure the entire organisation is included in this initiative. While we may live in the age of data architects, scientists and even data wizards, there is risk that if knowledge of data is siloed and restricted to these data experts, then the organisation may not properly understand or integrate this data, or indeed, may not properly meet the regulatory requirements associated with its use.

The more an organisation can successfully integrate data into its credit origination and management, the more competitive the organisation becomes in the marketplace. Smaller players, particularly, will gain insights into customers that may once have been restricted to the larger incumbents.

All this means is customers will have greater choice for financial services, and other service providers.

*Elsa Markula Legal & Regulatory Affairs Manager ARCA Ph Direct: 03 9863 7863 Email: emarkula@arca.asn.au www.arca.asn.au

Consumer Credit

Who has benefited from the introduction of positive credit reporting in Australia?

By Andrew Grant*

Andrew Grant

July 2018 saw the mandated introduction of Comprehensive Credit Reporting (CCR) into Australia. Under the regulatory change, lenders are required to share information about their borrowers with credit bureaus. In addition, credit scores, which under the previous regime incorporated only ‘negative’ information (such as loan defaults and credit enquiries) about a borrower, are augmented with ‘positive’ information related to loan servicing.

In a broad study, the University of Sydney Business School partnered with illion to examine the impact of the changing reporting regime to the creditworthiness of the population.

The ‘positive’ information in a borrower’s credit report (and credit score) includes repayment history information (RHI) and account holding information. Thus, individuals can benefit from good behaviour, rather than being punished for bad behaviour (as under the negative reporting regime).

Academic economists typically consider information sharing amongst lenders to provide benefits to the marketplace. From a credit provider’s perspective, good borrower behaviour involves the consistent repayment of outstanding loan balances and holding a small number of accounts

without excessive credit limits. Under the positive scoring regime, borrowers who service loans will see their scores gradually increase as they conform to the lenders’ expectations. Their willingness to repay provides useful information for subsequent loan applications and should be rewarded by credit providers through lowerpriced loan offers, as a reflection of their lower level of perceived risk.

Borrowers are also encouraged to “treat their credit score as an asset,” and a stronger linkage between credit provision and credit scores should instil a greater sense of discipline from borrowers.1 Information sharing should prevent borrowers from being able to evade prior indiscretions by shopping around for a lender who is unaware of their poor credit history. As such, the comprehensive reporting environment should help to lower their adverseselection costs incurred from the likelihood of lending to bad borrowers.

A reduced cost to the creditor from loan delinquencies and defaults – as well as in the credit risk assessment process (potentially) – may then be passed on to borrowers of good credit standing in the form of lower interest rates.2 In turn, lower interest costs for borrowers may lead to further decreases in loan delinquencies.

We performed empirical tests ➤

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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Consumer Credit

using credit score data from 383,221 individuals from the Australian creditseeking population, during the period between July and October 2018. Notably, we observed each individual’s credit score, at the time of a credit application, under both a negative and positive scoring system.

Consistent with predictions from academic literature, the changes to the credit reporting environment result in greater dispersion of credit score among the population, potentially leading to lower adverseselection risks for lenders.

More than two-thirds of the population experience a score increase following the implementation of positive reporting, lowering their perceived credit risk by an average of 25-35%. The balance of the population experiences a score decrease of a

similar magnitude, apart from a small subset for whom CCR results in a large decrease in credit score.

We also examined the proportion of the population that crosses key credit-score thresholds (480, 600, and 720) with the advent of CCR. Crossing the 600 threshold confers ‘prime’ status onto a borrower, leading to access to a 4.5% reduction in the average rate on personal loans, and a more than threefold increase in credit card limits. In aggregate, we find that 8.02% of individuals cross the 600 credit-score threshold with the introduction of positive credit reporting, compared with 5.27% of individuals who fall below the threshold. We interpret the difference of 2.75% as a measure of the growth in the prime credit population following the regime change. A net difference

“Using demographic based information, we find that applicants who cross the 600 credit-score threshold are disproportionally younger, from higher-risk geographical areas, with lower estimated incomes and wealth, and from less established households.”

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

of 11.13% is observed at the higher 720-score threshold, while a -3.03% difference at the lower 480 creditscore threshold.

Using demographic based information, we find that applicants who cross the 600 credit-score threshold are disproportionally younger, from higher-risk geographical areas, with lower estimated incomes and wealth, and from less established households.

Arguably, this group represents borrowers that may have been traditionally underserved under the negative scoring regime, as they are penalised for limited credit history.

Following the introduction of positive reporting, they can demonstrate prudent credit behaviour and benefit from this. There is less relationship between observed demographic characteristics and falling below the 600 credit-score threshold. Applicants from higher socioeconomic areas, with higher estimated wealth and income, and more established households stand to benefit from a greater likelihood of crossing of the 720-score threshold. Overall, the introduction of CCR benefits the population on average by providing a net increase

Consumer Credit

in credit access, with further benefits expected in terms of more efficiently priced lending products and greater borrower discipline.

Our study shows that crossing the 600-score threshold brings access to more than twice as many personal loans and seven times as many credit cards. The interest rates offered on the personal loans average 4.5% lower, and potential credit card limits are around 2.25 times as large for those with credit scores above 600. We also considered a higher threshold of 720 (at the 58th percentile of the negative score distribution), finding that 13.58% of the population experience a score increase above this threshold, while only 2.45% fall below it. This threshold provides consumers with access to a larger range of credit products, mainly in terms of better rewards offered on credit cards as well as better priced credit facilities that are aligned to the consumer’s risk, as already implemented in some credit sectors, such as the Fintech sector today.

Moreover, our analysis shows that the benefits of positive reporting – as measured in terms of increasing above the 600 threshold – accrue disproportionately in favour of those who might be excluded from gaining credit under conventional metrics.

Where CCR is able to demonstrate a consumer’s proven credit track record groups, such as younger applicants, those in riskier geographical locations, those with lower incomes and wealth, and with less established family units are among those who stand to benefit the most from the changing credit reporting regime where they are able to demonstrate prudent management of credit. The higher threshold of 720 tends to be more likely to be crossed by those in higher wealth and income brackets, and in lower risk areas confirming that consumers from a lower economic base are not likely to be suddenly inundated with a multitude of credit offers. Their

“Our study shows that crossing the 600-score threshold brings access to more than twice as many personal loans and seven times as many credit cards. The interest rates offered on the personal loans average 4.5% lower, and potential credit card limits are around 2.25 times as large for those with credit scores above 600.” opportunities will be commensurate with their credit standing.

There is now a clear opportunity to serve newly creditworthy individuals; the change to credit scoring benefits those particularly in traditionally underserved demographics. As greater discrimination in credit scores abounds, credit providers will be able to finely tailor their products to different segments of the population.

Consumers will be encouraged more by frequent, positive feedback from repayment history information, and thus more likely to treat their credit score as an asset, fuelling more prudent behaviour.

Overall, we provide empirical evidence that CCR will on average improve the risk profile of consumers from all demographic groups: across income wealth brackets, in high and low socioeconomic areas, younger and older, in metropolitan and rural areas, and for established and lessestablished household types. The economic benefit is realised to a larger extent by those consumers that have been traditionally excluded from access to credit. These consumers are more likely to cross the 600-threshold allowing them access to prime credit and better pricing.

For the historically well banked, their benefits from CCR are less to do with access to prime credit products (as they already have these). It will come from personalised pricing that is reflective of their personal risk and for this, CCR will need to be a key driver.

*Andrew Grant Senior Lecturer The University of Sydney Business School Email: andrew.grant@sydney.edu.au Mobile: 0401 608 964

FOOTNOTES: 1 Prior research demonstrating the disciplinary effect on borrower behaviour includes Vercammen (1995), and Padilla and Pagano (1997, 2000) and Bennardo, Pagano and Piccolo (2015). Liberman (2016) exploits a natural experiment from Chile and finds that borrowers would be willing to pay 11% of their monthly income for a good credit reputation.

2 Jappelli and Pagano (2002) and Djankov, McLiesh and Shleifer (2007) find higher lending volume and lower overall credit risk in countries with a greater level of information sharing.

REFERENCES: Bennardo, A., M. Pagano, and S. Piccolo (2015), “Multiple bank lending, creditor rights, and information sharing,” Review of Finance, 19, 511-570.

Djankov, S., C. McLiesh, and A. Shleifer (2007), “Private credit in 129 countries”, Journal of Financial Economics, 84, 299-329.

Jappelli, T. and M. Pagano (2002), “Information sharing, lending and defaults: Cross-country evidence”, Journal of Banking & Finance, 26, 2017- 2045.

Liberman, A., (2016), “The value of a good credit reputation: Evidence from credit card renegotiations,” Journal of Financial Economics, 120, 644-660.

Padilla, A. and M. Pagano (1997), “Endogenous communication among lenders, and entrepreneurial incentives”, Review of Financial Studies 10, 205-236.

Padilla, A. and M. Pagano (2000), “Sharing default information as a borrower discipline device”, European Economic Review, 44, 19511980.

Vercammen, J. (1995), “Credit bureau policy and sustainable reputation effects in credit markets,” Economica 62, 461–478.

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

31

Consumer Credit

Beyond the hype: How cloud and big data are revolutionising credit risk

By Vijay Mehta*

Vijay Mehta

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This year, Australia’s credit landscape underwent some immense shifts: vast proliferations of new and complex datasets were made available, customers continued demanding better experiences, and regulations were often in flux. Now, with changes like CCR in full swing, the industry is increasingly in need of innovative technologies to help adjust to the new normal.

But with new solutions appearing every few weeks, it can be hard to know which will actually deliver on their promise of powering (and empowering) your credit business.

As a CINO, I essentially make a living out of keeping track of all the new buzzwords. Every time a new technology enters the market, it’s my job to immerse myself in that period of jargonfilled hype that inevitably follows, and evaluate which tech is worth adopting to stay ahead of the curve. Sometimes it’s the more established technology, such as bona fide global solutions like the cloud and big data which we’re all familiar with, that need the most evaluation to understand how best to adopt these mainstream tools to add value to our businesses.

Cloud is a scalable, flexible solution that provides ultimate computational power to crunch bigger datasets and work across global teams, while big data provides an environment for better decision-making, better

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

customer experience and better processing.

With 87% of Australian and New Zealand credit businesses facing a lack of efficiency in credit risk analysis, these technologies have the power to really transform the way we think and operate. But they’re still not getting the attention they need.

Not just an IT issue We’ve all seen the IT team taking shiny new tech to their C-Suite. But we can’t let cloud and big data be seen as equivalent to the any old new gadget.

Data sits at the core of everything in the credit landscape, from underwriting loans, to managing card portfolios, through to customer acquisition and the user experience – all of which have been flagged as key areas for improvement in 2020. What is all that data without analytics?

Essentially not that useful.

The more data we have, the better you can produce analytics at scale and speed – an essential tool for today’s economy. And in a market which is ever evolving through competitive and regulatory pressures, powerful analytics that can provide quick and accurate decisions to drive your business forward are increasingly important.

Take a large bank for example: you’ve got complex decisioning, over 20 million records, 2,000 attributes, and 41 billion cells of information to interpret and analyse. Cloud offers an

Consumer Credit

opportunity to change the way we think about that big data on a global, integrated and efficient scale.

But Experian’s recent report Optimising Originations: The challenges, priorities and moving forward found that data is not being considered a business asset, nor getting the senior attention it needs outside of the IT department. The architecture and computational power to house this data is also still inefficient, with legacy hardware and siloed warehouses still the norm.

Perhaps we need to be learning from our international counterparts.

US-based OneMain Financial had a bank environment that couldn’t support their owned data, third party data and bureau data on legacy systems, and were struggling with the creation of attributes. They looked to the cloud as a potential solution, and their outcome-focused approach to cloud helped reduce expenses, improve their risk model development timing, and provide better analytics for market insights.

Over in the EU, Bank Norwegian’s goal was to have a fully automated bank – automation through: model governance, regulatory environment, originations, deployment and more.

They may be a smaller bank, but the success of their vision is a powerful

example of how technology can make a difference. Through modern technology, architecture, and efficient processing, they increased additional sales by 50%, sped up their decisioning and operations, and expanded into new markets without significant costs.

To achieve better results in Australia, cloud and big data need to be seen as business imperatives across multiple departments and functions, not just an IT tool.

Strategic adoption still imperative There is no one size fits all. Every business is unique, and cloud and big data will not be appropriate everywhere. But where there is a requirement for the scale based on workload and objectives, they should be considered.

We need continuous integration and continuous deployment, using tech to build automation into specific points in our originations and acquisition processes – something that the cloud and big data can help with.

We also need substantial growth in investment from the C-suite. This is about more than just money, it’s about forecasting the architecture of your business in the future. While on the

topic of money, however, embracing cloud and big data can increase the quality and quantity of analytical projects, whilst keeping costs under control. If this tech is not inherently part of your strategy, it may be time to rethink your business models, or you risk falling behind your competitors.

According to Gartner, global spending on cloud services and big data solutions are set to increase by more than 45% by 2022. I’m not saying the two will solve everything.

But as business decisions makers we need to understand that when new tech succeeds beyond the hype cycle, it’s really worth exploring to drive value for your business and customers. I truly see 2020 as the year where businesses will thrive if they can create an integrated cloud ecosystem, with data as the connective tissue.

*Vijay Mehta Chief Innovation Officer Experian

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

33

PPSA

One year on from the initial PPSA expiration date!

What have we learnt?

By Nicholas Boyce*

It has now been one year since 31 January 2019, which was effectively known as the ‘PPSA registration expiration date’ due to the sheer number of registrations on the Personal Properties Securities Register (PPSR) that were due to expire if registered around the commencement date in January 2012.

The registration expiration date was a good opportunity for secured parties to conduct a review of all existing registrations and consider whether they need to be renewed, discharged or allowed to lapse.

It was also a good reminder to secured parties to not adopt a ‘set and forget’ mentality after completing their renewals. This remains as true as ever.

This article will look at some of the common mistakes that occur in the registration process and steps that should be undertaken to avoid them.

Clearly identify your security interest in your terms

1

Nicholas Boyce

34

Before you even can think about lodging any registrations, you need to get your terms and conditions right.

Generally, in the credit space, a security interest will arise by reason of: 1. a charge over all of the customer’s property (including after-acquired property) or specific property; or 2. a retention of title clause.

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Other types of security that may require registration are leases, bailments and consignments provided certain elements under the PPSA are satisfied. These interests can be deemed under the legislation so if you are involved with those types of transactions, expert advice should be sought.

It is important that your terms are clearly drafted to ensure that the security that you think you are obtaining is accurately reflected in the wording of the terms. A properly completed registration cannot rectify defects in the underlying security agreement.

Your credit application (including your terms and conditions) should be regularly reviewed to ensure that you have the highest protection.

2

Identify your customer

The first step when considering whether to advance credit is to identify who you are actually dealing with. It is not uncommon for credit to be advanced to customers without proper consideration of who the actual legal entity is until it is necessary to take recovery action. If this occurs, it can then be up to your lawyers to figure out who to sue.

The key questions to be asked upon receipt of a credit application to assist with identification are as follows:

PPSA

1. What is the type of entity – sole proprietor, partnership or company?

2. If a partnership, who are the partners and what is the ABN (if any)?

3. If a company, who are the directors and what is the ACN? Does it have an ARSN? 4. Is the applicant a trust? If yes, who is the trustee and what is the ABN (if any)? Should you get a copy of the trust deed?

The above not only assists with recovery action but is also critical to how the ‘grantor’ is identified in your PPSR registration.

Everybody has now heard the horror stories of failures to use the correct grantor identifier in a PPSR registration (by using an ABN instead of an ACN or vice versa), resulting in defective registrations and losses of assets worth millions of dollars.1 Generally, the grantor is to be identified as shown in Table 1.

If an individual’s name is being used, consideration must be given to the type of document verifying the name as the Personal Property Securities Regulations identifies the priority of the specific source document that must be used (i.e.

name on a licence, name on a passport).

If you are unsure, you should always seek advice from an expert.

Ensure your terms are

3 accepted and collateral described In order for your security interest to be enforceable against third parties and perfected (in addition to registration), it must be: 1. in writing and either: (a) signed by the grantor; or (b) accepted by the grantor by conduct that reasonably appears to have been done with the intention of adopting the writing; and 1. the writing evidencing the agreement contains: (a) a description of the collateral; or (b) a statement that the security interest is taken in all-present and after acquired property (with or without exceptions).

It is important to note that a description of the collateral in the financing statement registered will not satisfy the above. The description needs to be in the actual security agreement.

This usually raises the issue

TABLE 1 Entity type

Grantor identifier (lowest value must be used if available)

Trust with corporate trustee

1. ABN of the trust

2. If the trust has no ABN, the ACN of the corporate trustee

Trust with individual trustee

1. A BN of the trust

2. If the trust has no ABN, the name of the trust or trustee

Individual that is not the trustee of a trust

Individual’s surname and given names

Partnership

1. ABN of the partnership

Company that is not the trustee of a trust

1. ARSN

2. If the partnership does not have an ABN, the surname and given names of the partners 2. ACN

3. ARBN

of what the security agreement encompasses as it may include a number of documents (i.e. is it the credit agreement alone or are purchase orders and invoices included which will contain clear descriptions of the collateral). What encompasses the security agreement will be a matter of construction based on the wording of the documents and how they interrelate.

It is important that all of your documents ‘speak to one and other’ and do not seek to create inconsistent rights.

A failure to properly describe the collateral in your security agreement and registration can result in the security interest being unenforceable.

4

PMSI or not?

A purchase money security interest (PMSI) is a security interest that: 1. secures part of a purchase price; 2. allows the grantor to obtain rights in the collateral (such as a retention of title); or 3. is an interest under a ‘PPS Lease’ or commercial consignment.

The benefit of a PMSI, if registered correctly and within the required timeframes (discussed below), is that the security interest in the specific ➤

“If an individual’s name is being used, consideration must be given to the type of document verifying the name as the Personal Property Securities Regulations identifies the priority of the specific source document that must be used”

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

35

PPSA

collateral will be afforded a higher level of priority, commonly referred to as ‘super priority’.

As noted above, a retention of title is a common security interest arising in the credit space and is a PMSI, meaning that any registration relying on a retention of title clause should reflect that the interest is a PMSI. A failure to register your security interest as a PMSI (if it in fact is a PMSI) can result in you losing the ‘super priority’ afforded.

5

Register within time

It is well-known that a failure to register a security interest prior to an administration of the grantor will result in your security interest vesting in the grantor. Put simply, if you don’t register, you will likely lose your security upon insolvency.

There are also specific time periods prescribed under the PPSA and Corporations Act 2001 (Cth) that have an effect on: 1. the priority between PMSIs and other security interests; and 2. the vesting of interests in external administrators if an insolvency

event occurs (excluding an appointment of a receiver or manager); The time limits prescribed are outlined in Table 2.

These time limits may be extended but only in limited circumstances.

The easiest way to avoid any issues arising is adopt a system where registrations are completed immediately upon the opening of an account and before any goods are supplied.

It should be noted that under the PPSA, a registration may be completed prior to the date the security agreement is made or before the security interest attaches to the property (generally when the grantor obtains possession of the collateral) so you can get in early and discharge if the agreement does not eventuate.

instance and regular reviews are conducted to ensure any potential defects are either avoided or discovered before it is too late.

The above are some helpful tips to assist you avoid the traps that have caused so many losses to secured parties because they could not follow the requirements. However, these tips cannot be substituted for expert advice as the issues are usually not as straightforward as they seem.

The points should be used as signposts to assist you with identifying potential issues and then as a springboard to seek assistance when in doubt.

The costs in seeking assistance pale in comparison to the potential loss that may be suffered in the event of a failure or defect.

Summary

*Nicholas Boyce MICM Associate, Results Legal Email: nboyce@resultslegal.com.au Ph: +61 7 3234 3219

The PPSA is mechanical in nature and the failure to tick all of the boxes can lead to catastrophic outcomes.

Internal policies must be put in place to ensure registrations are completed correctly in the first

FOOTNOTES: 1 See Re OneSteel Manufacturing Pty Ltd (Administrators Appointed) (2017) 93 NSWLR 611; Re Production Printing (Aust) Pty Ltd (In Liq) [2017] NSWSC 505.

TABLE 2 Security type and collateral

Time to register within

Benefits/Consequences

All

20 business days after the security agreement came into force (or 6 months before the appointment of an external administrator if this date is later)

If the registration is not completed within the time period and an external administrator is appointed, the security interest will vest in the grantor.

PMSI in goods* that are inventory**

Prior to the grantor obtaining possession of the goods

‘Super priority’ in the goods over other security interests

PMSI in property other than goods that are inventory

Prior to the grantor obtaining rights in the collateral

PMSI in goods that are not inventory

15 business days from to date the grantor obtains possession of the goods

PMSI in property other than goods that are not inventory

15 business days from the date the grantor obtains rights in the collateral

* ‘Goods’ are tangible property. It also includes crops, livestock, wool, minerals but does not include ‘Financial Property’. Property that is not ‘Goods’ includes intangible property ** ‘Inventory’ is property held by a business (with an ABN) for sale, lease, as raw materials or work in progress, for use as materials.

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Legal

Lodged a Caveat, what’s next?

By Christopher Yam*

It is common these days for there to be a charging clause in a credit or finance agreement/guarantee.

A credit provider or financier will rely on the charging clause to lodge a caveat over land owned by the debtor/ guarantor when a debtor is in default.

Once a caveat is lodged, what’s next?

A credit provider or financier who has a charging clause in a credit or finance agreement/guarantee: 1. is a secured creditor of the debtor/ guarantor; 2. has security over land owned by the debtor/guarantor in the form of an equitable charge.

A credit provider or financier can enforce an equitable charge over land owned by the debtor/guarantor by applying to a court for the land to be sold by: 1. the creditor provider; 2. a receiver or receivers.

This is an effective way of recovering moneys owing to the credit provider.

Scenario 1

Christopher Yam

Charging clause in a guarantee. z Financier lodged a caveat against land owned by the guarantor. z Guarantor became bankrupt. z Financier enforced equitable charge over land owned by the guarantor by applying to a court for the land to be sold by the financier. z Financier sold the land by auction.

The land was sold at the auction for $860,000.00, $60,000.00 above the market value of the land. z Financier was paid in full (debt +

interest + costs on a full indemnity basis) at the settlement of the contract of sale of the land. z The sale of the land generated surplus net proceeds in the sum of $128,018.30 (Surplus). Financier paid the Surplus to the bankruptcy trustee of the guarantor for the benefit of unsecured creditors of the guarantor.

Scenario 2 Charging clause in finance agreement. z Financier lodged caveats against 3 parcels of land, one owned by the debtor solely and the other two owned by the debtor jointly with the debtor’s spouse (Properties). z Financier enforced equitable charge over the Properties by applying to a court for the Properties to be sold by the financier and receivers. z Court made orders that the Properties be sold by the financier and receivers. z The debtor entered into a payment arrangement with the financier to pay the amount owing to the financier together with interest and costs on a full indemnity basis to avoid the Properties being sold by the financier and receivers. *Christopher Yam Special Counsel, Melbourne Ph: +61 3 9909 3304 Email: cyam@slflawyers.com.au DISCLAIMER The content of this publication is intended only to provide a summary and general overview of matters of interest. You should not rely upon the content of this publication as legal advice. You should obtain legal advice regarding the facts and circumstances of your matter before acting or relying upon the content of this publication.

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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Legal

Legal action makes commercial sense if garnishee of wages is a viable enforcement tool

By Roger Mendelson*

Up until about 20 years ago, many large credit departments had a legal team attached to it. Files would work through a progression of standard collection processes and a certain percentage would end up with the legal team.

By 2020, this is ancient history.

Rather like the milkman with the horse and cart delivering bottles of fresh milk daily and leaving it on front door steps. Legal action is now used in only a tiny percentage of debt matters.

PROBLEM: Many debtors are now immune to debt collection processes.

All credit managers will be aware of the common theme they face.

Savvy debtors, who may already have several default listings against their name, now deflect the standard collection processes. They have learnt to play the game. They have learnt that if they simply do nothing, the problem will eventually go away.

If a debtor has a genuine wish to pay but is unable to do so, every sensible collection system will incorporate payment arrangements and in our experience the completion rate on these is high.

Roger Mendelson

38

The problem debtors are those who refuse to pay, even though they have a capacity to do so.

Legal action may be a solution There is no point in suing a debtor unless there is an enforcement path available.

A debtor who is gaming the system is not going to normally care if a judgment is taken out against him because he has learnt to live with a poor credit rating anyhow.

Thus, legal action must be coupled with an enforcement path.

Garnishee of wages is the most effective legal enforcement tool available All States and Territories (except South Australia) provide the option of efficient, cost effective Garnishee (also known as “Attachment”) Orders.

To carry out Garnishee, you must firstly have a Judgment.

If your Judgment is from a State other than the state where the debtor lives, the Judgment can be easily transferred to that State and the Garnishee steps would be carried out in that State.

“A debtor who is gaming the system is not going to normally care if a judgment is taken out against him because he has learnt to live with a poor credit rating”

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Legal

What is a garnishee order?

A Garnishee Order is an Order from the Court to the employer (not to the debtor). It compels the employer to deduct a specified amount each pay day from the debtor’s pay and to forward that amount to the creditor.

The Order will continue until the amount of the Judgment is fully paid.

The court will normally allocate 80% of after-tax income toward the Garnishee Order.

However, if the debtor leaves the employment, the Order will effectively lapse but a further Order can commence if a new employer is found and verified. This will involve a new application and further costs.

Is it commercially viable?

A Cost Order (equivalent to approx.

70% of the actual cost incurred) will be granted with the Judgment and interest at an attractive rate (for example 10% per annum in Victoria) will form part of the Order.

Depending on the State, costs will be added to the Garnishee Order for an amount again roughly equivalent to 70% of the actual costs.

Interest will continue to run until the judgment debt is fully paid.

Thus, if you carry out some basic checks to confirm employment details and negotiate good rates with your lawyers, you will in most cases achieve 100% net recovery.

The process will add substantially to the amount he is liable for and as long as he keeps working in the same job, you are almost guaranteed to recover your full debt together with all collection costs.

The very fact that you are prepared to sue and go to garnishee will provide your collections team with an excellent script for dealing with debtors. The point they will make will be along the lines of: “…if you don’t pay, we will sue you and garnishee your wages and this is going to cost you a considerable amount.

Accordingly, it is better to enter into an arrangement with me now in order to avoid this…”.

What to look for Some tips If you are going to sue, you will want to sue for the maximum amount you can.

Accordingly, by incorporating a default cost clause in your business trading terms, you will be able to include the full legal costs incurred in the amount sued for. It is essential that the cost clause allow for the recovery of “Indemnity Costs”.

Why is it effective?

The chances are that your debtor has never been sued before and has never been the subject of a Garnishee Order.

The prime piece of information you need when deciding to obtain a Garnishee Order is the work details of the debtor.

Accordingly, this information is best obtained prior to advancing credit. It will be easier to obtain the information at that time and then check it later, rather than to start from scratch.

What you will be looking for is a steady job (even if it is permanent part-time, this will usually suffice), in an industry where changing jobs is difficult.

Prime candidates will be debtors

who work for a government agency or a large company and have specialised skills.

My advice is to rate debtors on a rating of 1 to 5. 5 is a job with say the armed forces, government agencies or large company and a track record of being there for some time. At the other end of the scale, a 1 would be someone whose job has been confirmed but it is work which is easily transferrable, such as a hotel chef.

As a trial, I suggest that you allocate debts which achieve a number 5 rating and see how it goes.

If you follow these steps outlined above, I am confident that you will be delighted with the outcome.

As a rule of thumb, the quantum of the debt can be as low as about $1,000.00 for a debtor with a 5 rating.

The state with the easiest and cheapest Garnishee processes is NSW.

*Roger Mendelson CEO, Prushka Fast Debt Recovery Pty Ltd and is principal of Mendelsons National Debt Collection Lawyers Pty Ltd. Ph: 1800 641 617 www.prushka.com.au Roger is also principal of Mendelsons National Debt Collection Lawyers Pty Ltd. Prushka acts for in excess of 57,000 small to medium size businesses across Australia and operates on the basis of NO RECOVERY – NO CHARGE. The writer is also the author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival, both published by New Holland Publishers.

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

39

Legal

Building industry security of payment in 2020

By Mitchell Hay and Daniel Turk*

Mitchell Hay

Daniel Turk

40

What is security of payment?

Security of payment legislation exists in each jurisdiction in Australia and is available for contractors doing work or supplying goods in the construction industry (apart from owner-occupier residential developments). It is designed to rapidly inject cash-flow for creditors and quickly determine any disputes that may arise between parties.

In NSW, contractors can include: z Contractors carrying out construction work z Suppliers of goods such as materials and equipment z Architects z Interior designers z Engineers Each regime is similar with some subtle differences between them, especially in relation to due dates.

There are benefits for creditors in NSW, for example, debtors who have not served a payment schedule after receiving a payment claim invoice by the supplier are unable to dispute the debt – sections 15(4) and 20(2A) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the ‘Act’)

The legislation also allows creditors to serve a notice on principal contractors to withhold payment to the contracting debtor until an adjudication application is determined – section 26A of the Act.

Change in NSW For those who may be unaware, the Building and Construction Industry Security of Payment Amendment Act 2018 (NSW) (the ‘Amendment Act’) commenced in October 2019.

The Amendment Act introduced and re-introduced some key changes to the security of payment legislation in New South Wales, many of which are favourable to contractors who are not being paid by debtors in a timely manner. Below are some of the key changes that may be relevant to you as creditors as well as how you can protect and enforce your rights under the various security of payment regimes across Australia. Remember, these provisions are available not just to contractors who provide building services, but also apply to those who supply goods and materials to commercial and residential

“The Amendment Act introduced and re-introduced some key changes to the security of payment legislation in New South Wales, many of which are favourable to contractors who are not being paid by debtors in a timely manner.”

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Legal

development construction projects (excluding owner-occupier construction).

Say goodbye to reference dates The Amendment Act has abolished the reference date concept in favour of a simple entitlement for contractors to issue one payment claim per month. An invoice is a payment claim if it complies with the requirements in the Act. Generally, your right to do this will arise on and from the last day of the month in which the work was completed or the goods supplied.

Otherwise, if the contract specifies an earlier date, you may issue a payment claim from that date. You may also now issue more than one payment claim per month if provided for in your contract. If not, you will have to stick with the old one per month rule.

Remember to endorse your payment claims It’s back. After a brief hiatus, you are once again required to state on the invoice that your payment claim is made under the NSW Act.

“Used properly, security of payment legislation can assist you to secure your cash-flow relatively quickly, due to the strict time limits imposed.” decision. If any part of a determination is found to contain jurisdictional error, the Court can now void that part of the determination whilst allowing the rest of the determination to be enforceable.

Withdrawal of application Show me the money!

NSW due dates for payment have been shortened in many cases from 30 business days to 20 after service of a payment claim.

Don’t terminate your rights Previously, termination of a construction contract may have been interpreted by the courts as extinguishing your rights to use the Act to recover payments from your debtors. Now, a construction contract may be terminated without affecting your rights to seek adjudication of a dispute under the Act. The right to issue a payment claim now arises on and from the date of termination.

Adjudication amputation The Supreme Court can now sever part of an adjudication determination without invalidating the entire

The Act now specifically allows a claimant to withdraw their adjudication applications before a determination is made. However, if the respondent objects to the withdrawal and the adjudicator determines that it is in the interests of justice to do so, the withdrawal may be rejected.

Liquidation ends it all If a claimant is in liquidation, the Act now specifically prohibits adjudication applications being made or continuing as well as enforcement of an adjudication determination.

What does this mean for me?

Changes have been made to a number of security of payment regimes in Australia in recent years. Whilst these regimes can greatly assist creditors in the construction industry, it can be difficult to stay on top of the

legislative changes as and when they occur. This is especially difficult for those who operate in more than one state or territory in Australia as there are subtle differences between each state’s regimes.

Used properly, security of payment legislation can assist you to secure your cash-flow relatively quickly, due to the strict time limits imposed.

However, you need to be very familiar with these time limits as they can also work to defeat your adjudication application if you miss a deadline.

Constant legislative changes, no matter how helpful, make this all the more difficult.

If you are thinking of improving your cash flow by using the security of payment legislation, make sure you are familiar with the current state of the law and seek legal assistance if you are ever unsure. *Mitchell Hay Associate TurksLegal *Daniel Turk MICM Partner TurksLegal www.turkslegal.com.au

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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Legal

Rights to be a Whistleblower and Duty to Report Offences – new laws and new offences

By Peter Mills* The new Whistleblower and Duty to Report laws in Australia pose substantial risk to companies and individuals. Thynne + Macartney touch on some of these risks and how they can be dealt with.

New Whistleblower Laws Australia introduced new national whistleblower laws on 1 July 2019. They are contained in the Corporations Act 2001 and the Taxation Administration Act 1953. These laws look to promote ethical whistleblowing, discourage corporate crime, and to protect the whistleblower. There are substantial penalties and civil liability for business who breach these laws,

Peter Mills

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especially if they fail to properly protect a whistleblower or have a written policy in place.

Right to be a whistleblower A “whistleblower” is a person who discloses information about a person or a company to expose misconduct (eg tax fraud, corruption or environmental damage) or an improper state of affairs or circumstances (eg failure to properly report PAYG or GST) so that the wrongdoing can be stopped or prevented from reoccurring.

Whistleblowers can include (but are not limited to) current and former: z Company officers and employees (internal whistleblowers), and z Contractors & suppliers (whether paid or unpaid eg external company accountant) (supply whistleblowers), and z Associates, spouses and relatives of internal and supply whistleblowers (external whistleblowers).

Because they often have a very close relationship with a business, whistleblowers will know of conduct and information which authorities are unaware of.

Whistleblowers therefore play a critical role in identifying and calling out misconduct and harm to consumers and the community.

To encourage whistleblowers to come forward, these laws give whistleblowers various legal rights and protections.

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Famous whistleblowers – Tobacco and Deep Throat In Australia, we do not have a long history of whistleblowing. One example however is Christopher Dale, formerly a partner with Clayton Utz Lawyers.

Dale revealed the British American Tobacco (BAT) Document Retention Policy, which required widespread destruction of scientific reports after a certain time period. The Policy itself was specifically designed for BAT

by Clayton Utz Lawyers to destroy potentially dangerous documents — documents that could be used against the BAT Group in tobacco illness related litigation.

Perhaps the most famous whistleblower however is Mark Felt, who used the alias “Deep Throat”. He was the Associate Director of the FBI, the number-two job in the FBI. He leaked information about President Richard Nixon’s involvement in the Watergate scandal, which initially lead to the indictment of the president.

This would eventually lead to the resignation of the president, and prison terms for White House Chief of Staff H. R. Haldeman and presidential adviser John Ehrlichman.

Which businesses are affected?

Everyone really The laws apply when the organisation the whistleblower discloses information about (ie not necessarily the whistleblower’s employer) is either: z A company (so basically all businesses);

Legal z A bank; z A provider of general insurance or life insurance; z A superannuation entity or a superannuation trustee, or z An incorporated association or other body corporate that is a trading or financial corporation.

Substantial penalties and civil liability to pay compensation applies to anyone who breaches the laws.

1 January 2020 – written policy offence Public companies (including any ‘public company limited by guarantee’, such as many not-for-profits and charities) and large proprietary companies, including foreign companies, were required to have a written whistleblowing policy in place by 1 January 2020. There are severe penalties if they did not have a written policy in place Even if your business did not have to have a policy in writing by 1 January 2020, it will be difficult to understand and comply with the new laws if you do not have a written policy. All businesses should review their whistleblowing policies and processes now.

Employment and workplace grievances generally excluded The protections do not generally extend to personal employment or workplace grievances. If however the disclosure relates to systemic issues or involves detrimental conduct to the whistleblower, the protections will apply. A person would also be protected in relation to a disclosure of a work-related grievance if it is made to a lawyer for legal advice or representation in relation to the whistleblower provisions.

Whistleblowers can make disclosures which will be subject to the protections to officers or senior managers of the company, or a person authorised by the company, amongst others. The disclosures can be made anonymously, but in all cases, the whistleblower must have reasonable grounds for their concern, that is, they

must have objectively reasonable grounds to suspect wrongdoing.

What offences are there for the businesses and protections for Whistleblowers?

Whistleblowers who wish to remain anonymous must not be identified, and must not suffer any detriment for having made the disclosure. z Companies may be liable to a civil penalty of the greater of: { $10.5 million, or { if a Court can determine the benefit derived or detriment avoided because of the contravention, three times that amount, or { 10% of the annual turnover of the entity up to a maximum of $525 million. z For an individual they will be the greater of: { $1.05 million, or { if a Court can determine the benefit derived or detriment avoided, three times that amount. z The courts are empowered to make orders for compensation. z Failure to comply with the confidentiality and detrimental conduct provisions will also be criminal offences, punishable by imprisonment and/or fines.

Duty to report – NOCLAR and New South Wales Crimes Act The general rule is that there is no legal requirement to contact authorities about another person breaking the law.

Specific exceptions include workplace health and safety accident reporting and anti-money laundering reporting by banks to AUSTRAC. Under the accounting industry’s ethical conduct standards, individual accountants may have an obligation to report their clients or employer for non-compliance with laws and regulations’ (NOCLAR) eg wage and tax theft, financial and creditor abuse, money laundering, insolvent trading, and director misconduct.

In addition, under s 316 NSW Crimes Act:

z An offence is committed by A, if: { A knows or believes that a “serious indictable offence” has been committed by B; { A knows or believes that they have information that might be of material assistance in securing the apprehension, prosecution or conviction of B; { A fails without reasonable excuse to bring that information to the attention of the NSW Police or other appropriate authority, and { A’s profession vocation or calling is not listed in the regulations as one which gets protection from this section.

Credit officers, managers, accountants and journalists are not listed. z Up to five years jail can be imposed.

Conclusion These new Whistleblower and Duty to Report laws in Australia pose substantial risk for businesses.

Companies should: z Implement a compliant whistleblower policy, or risk severe penalties; z Test their whistleblower policies and processes to ensure they provide robust avenues for employees to report improper conduct and that their anonymity can be preserved when doing so; z Provide training for directors, senior managers and nominated staff to receive and respond to whistleblowing disclosures, and z Consider whether they or their employees are exposed for failure to report offences under either NOCLAR or other laws.

Being able to display effective policies and procedures will assist companies operating in Australia to resist regulatory penalties and compensation claims implemented by the new legislation. *Peter Mills MICM CCE Special Counsel Thynne Macartney Ph: +61 7 3231 8810 Email: pmills@thymac.com.au

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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aicm Training News The benefits of gaining a nationally recognised qualification What is accredited training?

In Australia accredited training can take on different meaning based upon the perspective of the individual; for example accredited training for an employee may be training which has been approved by the organisation, within a university environment it usually means that the training will contribute towards an enrolled degree etc.

The term accredited training is used to differentiate a course within the Vocational Education and Training (VET) framework. It is also referred to as Nationally Recognised Training. In this context accredited training generally leads to a nationally recognised qualification or unit of competency which can only be issued by a Registered Training Organisation (RTO) like AICM.

What is nationally recognised training?

Nationally recognised training is any programme of training leading to vocational qualifications and credentials that are recognised across Australia.

Nationally recognised training courses are listed on training.gov.au.

Decisions, decisions, decisions….

When deciding which study option is best for you, it can be easy to get overwhelmed. Should you go to University, TAFE or a provider like AICM? Everyone seems to have a different opinion on what the RIGHT answer is, but let’s look at some of the benefits for you and your career by studying within the vocational education training framework.

How continuous learning can benefit you and your credit team?

1. Expand your skillset You can acquire new skills, as well as refreshing and updating your knowledge.

Although you may already feel confident in your current abilities, completing a qualification or part

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

of a qualification allows you to expand your current knowledge on the latest industry changes.

2. Open doors to other courses and qualifications After completing a qualification, you then have access to more courses and qualifications that have prerequisites.

For example, you may undertake the Certificate IV in Credit Management qualification and then decide to complete further studies at the Diploma level.

3. Broaden your career opportunities Completing further studies will provide more opportunities, giving you variety in your career choices.

Being qualified for a variety of different positions gives you more chances of finding a position that you are most suited. It not only benefits your career growth, but also shows employers you are eager to learn and grow.

See the latest vocational educational statistics from The National Centre for Vocational Education Research (NCVER).

aicm Training News 4. Feel empowered Aside from all of the career and financial benefits, completing a qualification gives you sense of selffulfilment and accomplishment. Benefits of getting a qualification will leave you more motivated in life as well as your career!

With perks ranging from personal and interpersonal, to financial and educational advancements, it would be hard to deny that it’s worthwhile investing your time into getting more qualified. You should try to take advantage of any opportunities to learn.

5. Give your team the leading edge Today’s corporate world is fast paced and competitive, there’s ever increasing pressure for organisations to stay up-to-date but as you know an organisation is really only as good as its people. Ensuring your teams have the best possible knowledge is key to the success of your organisation.

Employees will never see the further development of their skills as something negative. Even if it might mean they have to put in extra hours to participate in courses that are designed to enhance their work life. Sometimes it is necessary for a manager or team leader to get in experts to ensure the optimum growth and development of its company. This is something that every business, no matter what size, should be considering.

Recent graduates AICM would like to congratulate its recent graduates: FNS51515 – Diploma in Credit Management Richa Verma

NSW

Hager AU

FNS40115– Certificate IV in Credit Management Emma Purcival

QLD

Vinidex Pty Ltd

Statement of Attainments Iona Yin

NSW

FNSCRD504 – Manage the credit relationship

Indigenous Business Australia

Jacob Ramsey

VIC

FNSCRD502 – Manage factoring and invoice discounting arrangements

Scottish Pacific

Kristy Miller

VIC

FNSCRD502 – Manage factoring and invoice discounting arrangements

Scottish Pacific

Matthew Boscolo

VIC

FNSCRD502 – Manage factoring and invoice discounting arrangements

Scottish Pacific

Serene Lio

VIC

FNSCRD502 – Manage factoring and invoice discounting arrangements

Scottish Pacific

Sophie Wiltshire

VIC

FNSCRD502 – Manage factoring and invoice discounting arrangements

Scottish Pacific

Harry Rogers Woollett

VIC

FNSCRD502 – Manage factoring and invoice discounting arrangements

Scottish Pacific

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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aicm Training News April to June 30th 2020 – face to face training calendar NSW – RTO, Toolbox and Workshop Calendar

VIC – RTO, Toolbox and Workshop Calendar

Date

Event Type

Topic

Date

Event Type

Topic

Wednesday, 8 April 2020

Workshop

Understanding bankruptcy workshop

Wednesday, 22 April 2020

Workshop

Understanding bankruptcy workshop

Thursday, 16 April 2020

RTO

Establish and manage a trust account

Thursday, 23 April 2020

RTO

Respond to personal insolvency

Friday, 17 April 2020

RTO

Develop monitor policies and procedures

Friday, 24 April 2020

RTO

Respond to corporate insolvency Corporate insolvency workshop

Workshop

Corporate insolvency workshop

Wednesday, 6 May 2020

Workshop

Wednesday, 22 April 2020

Workshop

Hardship workshop

Thursday, 7 May 2020

RTO

Wednesday, 13 May 2020

Manage and recover bad and doubtful debts

Friday, 8 May 2020

RTO

Manage the credit relationship

Thursday, 14 May 2020

RTO

Respond to personal insolvency

Tuesday, 16 June 2020

Toolbox

Understanding credit risk toolbox

Friday, 15 May 2020

RTO

Respond to corporate insolvency

Wednesday, 10 June 2020

Workshop

Personal property securities (pps) workshop

Thursday, 11 June 2020

RTO

Manage people performance

QLD – RTO, Toolbox and workshop calendar Date

Event Type

Topic

Monday, 20 April 2020

RTO

Respond to personal insolvency

Tuesday, 21 April 2020

Toolbox

Understanding credit risk toolbox

Monday, 11 May 2020

RTO

Respond to corporate insolvency

Tuesday, 12 May 2020

Workshop

Understanding bankruptcy workshop

Tuesday, 26 May 2020

Workshop

Understanding bankruptcy workshop

Tuesday, 9 June 2020

Workshop

Wednesday, 17 June 2020

SA – RTO, Toolbox and Workshop Calendar Date

Event Type

Topic

Tuesday 7 April 2020

Workshop

Corporate insolvency workshop

Wednesday, 8 April 2020

Workshop

Personal property securities (pps) workshop

Thursday, 9 April 2020

Toolbox

Understanding credit risk toolbox

Fri 10 April 2020

Workshop

Hardship workshop

Tuesday, 9 June 2020

Toolbox

Fundamentals of credit toolbox

Tuesday, 23 June 2020

Toolbox

Collect with confidence toolbox

WA – RTO, Toolbox and Workshop Calendar Date

Event Type

Topic

Hardship workshop

Tuesday, 19 May 2020

Workshop

Corporate insolvency workshop

RTO

Assess credit applications

Wednesday, 20 May 2020

Workshop

Personal property securities (pps) workshop

Thursday, 18 June 2020

RTO

Manage people performance

Thursday, 21 May 2020

Toolbox

Understanding credit risk toolbox

Tuesday, 23 June 2020

Workshop

Personal property securities (pps) workshop

Friday, 22 May 2020

Workshop

Hardship workshop

Tuesday, 9 June 2020

Toolbox

Fundamentals of credit toolbox

Tuesday, 23 June 2020

Toolbox

Collect with confidence toolbox

RTO – Accredited training leading to a qualification.

Toolbox – Short course training Workshop – Short course training Important information:

You do not have to be a current AICM student undertaking a qualification to attend any of the face to face training programs. You may wish to undertake a program for your professional development or enhance and update your skills and knowledge.

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

PINNACLE AWARDS

PUT A SPOTLIGHT ON A GREAT PERFORMER T

he Pinnacle Awards were launched in NSW in 2013, Victoria in 2015, Queensland in 2016, and South Australia in 2018.

The Pinnacle Awards align with the AICM’s purpose to connect and recognise Credit Professionals as well as expanding the relevance and understanding of the Credit Function. The awards also represent a unique opportunity to align your brand with the AICM and an award that recognises the achievements of Credit Professionals. The awards recognise Credit Professionals at all levels and sectors of the industry through a process of nomination, selection of finalists and popular votes.

Some highlights of 2019 were: z 95 Finalists z 2727 Votes z 419 Event attendees

SA

QLD

VIC z NSW and VIC 2019 Premium Sponsor

z QLD 2019 Premium Sponsor

NSW

To see more photos from the Pinnacle Awards please CLICK HERE

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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New South Wales l Credit Manager of the Year – Sponsored by American Express

Julie Rojas micm

PINNACLE AWARDS

Rentokil Julie has managed the process of centralising the credit team and incorporated the banking and allocations previously part of the sales department. She has successfully managed this whilst reducing DSO, streamlining process and building engagement through the business. Julie is a staunch supporter of AICM with her team being members and has had a finalist in the YCP. The judges were impressed by Julie’s: z Dedication to mentoring team members including an AICM YCP finalist and encouraging team members to expand their knowledge. z Reduction of 90+ day debt by $3mil and 180+ day debt by $3mil whilst acquiring 7 businesses. z Reducing time to process one customer complex invoicing requirement from 1 week to 10 minutes. z Working with the New Zealand colleagues to replicate these achievements.

Julie is presented her award by Team Leader of American Express, Robert Lowe.

l Credit Supervisor of the Year – Sponsored by Alloc8

Nicola Kyprianou Optus Nicola is an inspirational leader who has great energy and motivational skills. She is a critical asset to the team and group. Nicola is an innovative thinker, constantly coming up with ways to optimise credit decisions, streamline team processes and finding better ways to do things. She is a professed self-learner and is always up for a challenge – nothing is too small for her. Recently, she was promoted to Credit Risk Assessment Manager for her efforts. She shares her knowledge and encourages team members to achieve their goals.

The judges were impressed by Nicola’s: z Involvement implementing a biometric solution that works for customers and front-line staff. This Nicola accepts her award from Trevor Middleton included upskilling her team and the communications MICM Regional of Cosyn Software, regional project. distributor of Alloc8. z Dedication to leadership of a large team with an individual and supportive approach. z Long tenure at Optus achieving several promotions and professional growth.

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

To see more photos from the Pinnacle Awards please CLICK HERE

New South Wales l Senior Credit Officer of the Year

Kim Puckeridge Transurban

PINNACLE AWARDS

Kim has delivered exceptional results in managing the Linkt Consumer retail customer base delivering a first call resolution and a customer first approach to collections while building a high performing credit team in a difficult and challenging environment.

The judges were impressed by Kim’s: z Achievement of bad and doubtful debt expense of just 0.04% of revenue. z Managing the end collection process. z Focus on ensure customers are treated equally and fairly in order to gain a positive outcome. z Maintaining a positive personal and team attitude. z Achievement of her Certificate IV in Credit Management and promotion through various roles at Transurban.

l Recruitment Consultant of the Year

Marcia Voller CNH Marcia is an internal recruiter at CNH and has worked in the talent acquisition space for over 15 years, having worked for a global recruitment company and successfully run her own recruitment business in South Africa, she is highly regarded in her industry as a professional and has a strong track record of achievement throughout her career.

The judges were impressed by Marcia’s: z Level and breadth of responsibility working across CNH’s $27 billion Captive Finance environment recruiting a range of junior, qualified and senior level professionals. z Implementation of a structured recruitment process which assists in mitigating risks and better staff management. z Achievements reducing staff turnover and increasing staff engagement. z Reduced agency fees by over $700 000.

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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New South Wales l Legal Representative of the Year – Sponsored by Jirsch Sutherland

Luis Ormazabal micm

PINNACLE AWARDS

BBW Lawyers Luis is an outstanding legal professional who represents his clients with the upmost dedication and professionalism.

Luis is tenacious and keeps himself up to date with relevant issues in law, and credit. An example of this is that in 2018 Luis became an accredited specialist in Commercial Litigation through the Law Society of NSW. Luis has remained a relevant member of the AICM community by involving himself in events and encouraging others to attend.

The judges were impressed by Luis’: z Recent success advising a multi-national client to successfully defend a $900k unfair preference claim. z Focus on understanding his client’s business and focus on meeting their KPI’s. z Breadth of experience working with ASX listed companies through to family owned and operated businesses.

Luis with NSW Division President Balveen Saini MICM CCE.

l External Collections/Mercantile Agent of the Year

Lydia Nemes micm Optimum Recoveries With over 20 years’ experience in the industry Lydia is able to apply her knowledge and experience to provide her clients with the support and credit knowledge needed to provide sustainable results. She is passionate about achieving results and benefits of good cash flow management and debt prevention.

Lydia prides herself on being respectful, non aggressive and using ethical engagement with her client’s customers.

She works with three team members and ensures herself; her team and clients are always kept up to date with industry news, and changes in legislation.

The judges were impressed by Lydia’s: z Reduction in aged debt of $263,281.00 within a month for one client. z Educating clients on debt prevention, credit policies, processes, and credit terms. z Breadth of experience and passion for the credit profession.

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

New South Wales l Consultant of the Year – Sponsored by Turkslegal

David Jovanov micm ARMA Recoveries

See you at AICM’s

PREMIUM SPONSOR

14-16 October 2020 | Sofitel Brisbane Central

go to www.aicm.com.au for more details

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

51

PINNACLE AWARDS

David has a strong focus on his customers and helping them overcome the challenges they face in the world of credit. His many years of experience in the credit industry allows him to not only help his clients with debt collection but also allows him to help them and give advice through whole credit process, from new applications to credit and risk assessment, to security, through to contingent collections and legal advice. His goal is to provide as much knowledge and expertise to his clients so he can help them overcome the challenges they face.

The judges were impressed by David’s: z Contributions to ensuring ARMA continue to deliver a high level of service and recovery rates. z Leadership of a team of ARMA specialists who responded at very short notice to assist a client with working capital improvement project resulting in record cashflow results for the client.

Queensland Credit Manager of the Year – Sponsored by People2People

Michelle Kirkby micm

PINNACLE AWARDS

ERM Power Michelle is a fantastic leader and mentor. She has developed her own skill set whilst working with ERM Power but has also increased the calibre across her team as well as recruiting a team leader. Michelle is an extremely valued employee of the business and is always looking to provide extra support and exposure to her direct and wider teams.

Some of her achievements include: z Leading her team to deliver key outcomes, reduced DSO days, increase on collections and improve credit quality. z Her and her team being recognised with the ERM Collaboration Award for 2019. z Maintaining an annual bad debt to revenue ration of less than ½ a percent over the last two financial years in the face of increasing electricity prices and increased solvency risk across a number of industries in Australia.

Ben Wheeler, Director of People2People presents Michelle with her award.

Credit Supervisor of the Year – Sponsored by Alloc8

Chad San Giorgio micm DHL Express Chad goes above and beyond for customers and his team.

He is an innovative self- starter who pro-actively identifies inefficient processes and develops solutions. Chad leads by example to help his team adapt to change.

The judges were impressed by Chad’s: z Approach to resolving month end pressures reducing processing time from four working days to less than two. z Structured and personalised way of supporting his team including regular meetings, workshops and recognition.

Chad receives his award from Ellen Singleton MICM of Cosyn Software.

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

To see more photos from the Pinnacle Awards please CLICK HERE

Queensland Senior Credit Officer of the Year – Sponsored by CreditorWatch

Ashleigh Mason micm cce National Collection Services

Ashleigh is presented her award by George Wolf, QLD sales manager of Creditorwatch.

Legal Representative of the Year – Sponsored by Jirsch Sutherland

Anna Taylor micm Results Legal Anna is a dedicated and thorough legal professional who utilises her extensive knowledge and experience in the law and credit management practice to achieve results and provide guidance to her clients. She develops a deep understanding of her clients and their business to find the best approach.

The judges were impressed by Anna’s: z Ability to navigate complex issues and balance costs with outcomes z Willingness to share her industry experience with clients and in industry presentations. z Transparency and clarity of her communications with clients. z Clients achieve a significant reduction of old debts including a successful 80% recovery rate for one client.

Anna accepts her award from Chris Baskerville MICM of Jirsch Sutherland.

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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PINNACLE AWARDS

Ashleigh is a highly motivated and passionate credit professional who consistently overachieves on her KPI’s, supports her teammates and takes on additional responsibilities. In 4 years with NCS she has grown personally and professionally achieving promotions and industry recognition.

The judges were impressed by Ashleigh’s: z Continual ability to exceed targets by at least 20% z Support of her colleagues including taking on the responsibility to train new employees and assist colleagues any way she is able to. z Positivity and enthusiasm that she uses to motivate and inspire her colleagues.

Queensland External Collections/Mercantile Agent of the Year | – Sponsored by SLF Lawyers

Angela McDonald micm

PINNACLE AWARDS

Optimum Recoveries Angela strives for success and has continued to display first class attributes including developing an amazing client service team and providing consistently great results.

Through clear, customised communication and efficient processes she provides the highest level of service to her clients.

The judges were impressed by Angela’s: z Ability to exceed client’s expectations consistently. z Commitment to best practice and continual improvement z Dedication to clients and support for her team.

Angela is presented her award by Callan Peach MICM of SLF Lawyers.

Recruitment Consultant of the Year

Siobhan Reynolds People2People Siobhan is a passionate recruiter who values the opportunity to make a positive difference in peoples careers making her well known to the those in the credit industry.

She has worked with clients and candidates across a range of sectors and industries to understand their needs and objectives forging a reputation as a trusted advisor.

The judges were impressed by Siobhan’s: z Ability to recruit across a range of sectors and industries. z Thinking outside the square to support clients and candidates z Personable approach to her work and pride in her commitment, and dedication to her clients.

AICM CEO Nick Pilavidis FICM CCE presents Siobhan with her award.

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Queensland Consultant of the Year – Sponsored by TurksLegal

Katheryn Kershaw micm National Collection Services

PINNACLE AWARDS

Katheryn is able to build trust, loyalty and motivation with the presence that you want to have in the office. She goes above and beyond for her clients and to get the best out of her colleagues. Katheryn is a forward thinker with a clear process and model that sets her apart from others in her field. She is passionate about her learning and developing whilst also fostering the same in her teams.

The judges were impressed by Katheryn’s: z Ability to meet and exceed clients expectations in challenging and dynamic situations. z Manner in establishing and maintaining clear expectations with clients and team members. z Passion for mentoring and supporting team members, clients and fellow credit professional.

Katheryn is presented with her award by AICM CEO Nick Pilavidis FICM CCE.

LET’S GIVE CREDIT TO YOUNG CREDIT PROFESSIONALS

Trusted Insights. Responsible Decisions.

DO YOU KNOW A TALENTED YOUNG CREDIT PROFESSIONAL WHO DESERVES RECOGNITION? The Young Credit Professional of the Year Award (YCPA) program is the largest and most prestigious Youth Credit Award program in Australia and provides a great opportunity for young Credit Professionals to gain recognition both for themselves and their employer.

By entering the YCPA program and discussing your career achievements and ambitions you will gain both valuable insight to the potential for your future advancement and support from young Credit Professionals like yourself and from experienced Credit Practitioners who are interested in assisting young Credit Professionals to achieve their potential.

The YCPA applications are now open!

To register your interest

CLICK HERE

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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South Australia l Credit Manager of the Year – Sponsored by Alloc8

Anne Wilkins micm

PINNACLE AWARDS

FMG Engineering Anne is an experienced well organised, dynamic, confident credit professional with over 20 years’ experience in the credit and collections industry. Anna has decreased DSO’s by 20-30% at her organisation and in the building and construction sector this is a tough ask. Anne has strong work ethics and the ability to make quick precise decisions in a fast-paced environment, while maintaining strong customer service and a high degree of professionalism.

l Credit Officer of the Year

Emma Den Hartog micm Brice Metals Australia Pty Ltd Emma is an integral part of the credit team at Brice and thrives in her role which entails new account processing and assessment, PPSR management, NCI and internal reporting. Emma’s efforts have been a major factor in the organisation’s improved DSO. Emma’s energy, enthusiasm and personal touch has seen her gain greater understanding of the credit function and has earned her the respect of not only workmates but customers, and other credit professionals.

Emma accepts her award from Division Councilor James Neate LICM CCE.

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

To see more photos from the Pinnacle Awards please CLICK HERE

South Australia l Legal Representative of the Year

Alice Carter micm cce Lynch Meyer Lawyers

PINNACLE AWARDS

Alice was selected as Legal Representative of the Year due to her proven track record of achieving commercial results in a timely manner using her years of experience gained in the field of debt collection and insolvency. Alice knows the court system inside and out and when it’s appropriate to use the system for the benefit of the creditor. Alice Carter takes the time to get to know her clients to enable her to achieve the best possible outcome.

l External Collections/Mercantile Agent of the Year

Ericson Malvar micm cce National Credit Insurance Pty Ltd (Brokers) Ericson is a dedicated employee of NCI Commercial Collections, who practices on the highest level of customer service and successful recovery of clients’ overdue accounts.

Ericson with SA Division Vice President Alice Carter MICM CCE

March 2020 • CREDIT MANAGEMENT IN AUSTRALIA

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South Australia l Consultant of the Year

Robert Naudi micm

PINNACLE AWARDS

Rogers Reidy (SA) Pty Ltd Robert is an insolvency practitioner with a long association with the credit management community and worked as a national credit manager before his career in insolvency. He bases his personal and practice operation on integrity and fairness.

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CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Victoria & Tasmania l Credit Manager of the Year – Sponsored by American Express

Joe Losinno micm cce Ruralco

Joe accepting his award from National Acquisitions Manager, Hayley Medley of American Express.

l Credit Supervisor of the Year – Sponsored by Alloc8

Candy Cuesta micm Dulux Group Candy is a highly dedicated leader who exceeds the challenging requirements of her role and the expectations of the company. She is focused on providing an environment and systems that ensures the success of her team. Candy is empathic and supportive, hard-working and fun loving, innovative and inspiring and just as importantly she genuinely cares about her team.

The judges were impressed by Candy’s: z Ability to improve service measures by over 20% despite increasing sales volumes and same team size. z Leadership in driving several system implementations and improvements such as increasing e-billing uptake from 10% to 70%. z Passion for Developing and challenging her team, including supporting team members to present at Dulux National Conferences and reducing staff turnover for 3 years running.

To see more photos from the Pinnacle Awards please CLICK HERE

Client Relationship Manager, Ellen Singleton MICM of Cosyn Software presents Candy with her award.

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PINNACLE AWARDS

Joe is an experienced credit manager working in various Ruralco businesses units. He has achieved significant and consistent results in debt reductions, system improvements and project management achieved through a structured approach and continual engagement with his team, Branch staff and the broader business.

The judges were impressed by Joe’s: z Reduction on overdues from over 10% in 2017 to under 3% in 2019 z Preventing any bad debt write off so far in 2019, significant in the Rural and agriculture sector. z Contribution to strategic projects across the business z Travelling thousands of kilometers each year to support Rodwells Branch staff and customers.

Victoria & Tasmania l Senior Credit Officer of the Year

Martina Vucak micm

PINNACLE AWARDS

Kingspan Insulation Pty Ltd Martina is a role model to her team working closely with internal and external stakeholders to continually improve the customers experience with the business. She is innovative and challenges the way processes are completed to establish more effective and efficient practices for all involved.

The judges were impressed by Martina’s: z Development and implementation of highly detailed and technical process improvements. z Initiating review of the Credit Application processes and terms and conditions, to ensure compliance with legislation and industry best practice. z Receiving an internal company award recognising her enthusiasm, empathy and consideration of others. z 2019 AICM High Achiever award – Certificate IV in Credit Management z 2019 AICM Vic/Tas YCP Tony Mammone Award recipient.

l Legal Representative of the Year – Sponsored by Jirsch Sutherland

Monique Milic micm Oakbridge Lawyers Monique is a driven, dedicated and commercial lawyer who always strives to obtain the best results for her clients while being conscious of the commerciality of each matter based on the individual merits of each matter.

The judges were impressed by Monique’s: z Ability to settle a $1.1 million debt with full payment within 8 months, achieved through a unique strategy involving securing the debt over multiple assets. z Successfully negotiated a settlement worth 78% of the client’s total claim in a recent commercial litigation prior to the matter reaching trial z Tailored personal communication strategy with each client.

Glenn Crisp MICM of Jirsch Sutherland with Monique.

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Victoria & Tasmania l External Collections/Mercantile Agent of the Year

Judy Vurlow micm McArthur Commercial Recoveries Pty Ltd

PINNACLE AWARDS

Judy was nominated for her drive and unrelenting work ethic to improve processes and continually achieving incredible results. Her passion and drive for debt collection is insurmountable. Judy supports her team by providing on-going support and development on topics such as legislative changes, Financial Hardship and best practice processes for dealing with customers and implementing the companies credit policies.

The judges were impressed by Judy’s: z Achievements implementing streamlined and best practice processes for hardship, high volume low value collections and training her team. z Ability to adapt to clients needs z A recovery rate of 96% versus client expectation of 30% z Focus on clear and consistent communication with her clients z Dedication to her own ongoing professional development.

l Consultant of the Year – Sponsored by Turkslegal

Artemis Vrionis Sharp and Carter Artemis Vrionis is a passionate and motivated Accounting and Finance recruiter. She values her team at Sharp and Carter and builds strong relationships across the business, clients and candidates. She provides exceptional service to her clients and candidates even if it doesn’t involve filling a role. She keeps up to date the credit industry and always finds their right fit for clients and candidates.

The judges were impressed by Artemis’: z Connection with credit industry meeting with at least 10 Credit Professionals a week to ensure she is up to date. z Consistently going above and beyond to support clients and candidates. z Technical knowledge of the credit profession.

Artemis accepts her award from Allan Kawalsky MICM of Turkslegal and VIC/TAS Division Councilor Sunny Sharma MICM.

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DIVISION REPORT

South Australia

Scott McGrice (Worrells) and Digby Luckhurst-Smith (Lynch Meyer Lawyers).

Amy Cooper and Angela Walden (both NCI) and Ryan Osborne (Worrells).

Merna Spain, David Keast and Emma Den Hartog (all Brice Metals Australia).

Susan Saunders, Racheal Knight and Allison Balkauskas (all Group Management Services).

President’s Report

z Consultant of the Year: Robert Naudi MICM, Rodgers Reidy (SA) Pty Ltd I would like to take this opportunity to congratulate our well-deserving winners, and I look forward to seeing the achievements that our wonderful credit professionals in the SA Division conquer this coming year.

The SA Division Council is excited to see some new faces stepping into Councillor roles, and I look forward to the energy and enthusiasm that they are sure to bring to their new responsibilities.

The new Councillors stepping into roles this year are: z YCP and Functions portfolios: Gemma Haggett z Professional Development and Media portfolios: Clare Venema While it is certainly exciting to have these young professionals contribute to the Council, it is also a time to recognise the valuable contribution and hard work of Gina Thorpe and Lisa Anderson, who will be retiring from the SA Division Council.

Both Gina and Lisa have greatly assisted the Council with their hard work and enthusiasm, both generally and

What a successful and productive year 2019 has been for the SA Division of the AICM. With a number of exciting events coming up in 2020, it’s a good time to reflect upon the year that was.

Last year’s Pinnacle Awards, held on 14 November at the Alma Tavern had a fantastic turnout of both familiar faces and new faces in the credit industry. The Pinnacle Awards presented a great opportunity to recognise the achievements of leaders in credit and was a nice time to catch up with colleagues before the Christmas break.

The winners of the SA Division of the Pinnacle Awards were as follows: z Credit Manager of the Year: Anne Wilkins FICM CCE, FMG Engineering z Credit Officer of the Year: Emma Den Hartog MICM, Brice Metals Australia Pty Ltd z Legal Representative of the Year: Alice Carter MICM CCE, Lynch Meyer Lawyers z External Collections/Mercantile Agent of the Year: Ericson Malvar MICM CCE, National Credit insurance Pty Ltd (Brokers) 62

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

South Australia Neil Fennell MICM – Treasurer Supervisor at Worrells Solvency & Forensic Accountants

Craig Jones, Ericson Malvar – External Colections/Mercantile Agent of the Year and AJ Jaramillo (all NCI).

in their respective YCP and Media portfolios. They will be missed!

Our current team is certainly up to the task of supporting our SA members, but we welcome any members who are willing to assist – either on Council or working in a subcommittee. Please feel free to contact either myself or any SA Division Council member, if you can assist. Along with our Toolbox sessions, CCE, and Women in Credit luncheon coming up this year, the SA Division is excited for upcoming event on 27 February in support of the Adelaide Fringe Festival, where we have an opportunity to see magical delights of award-winning magician, Matt Tarrant.

I look forward to seeing you there and wish you all a successful and productive year ahead.

– Nick Cooper MICM SA Division President

Neil has been a member of the AICM for 6 years. Neil originally joined the AICM to assist with developing his professional profile and take advantage of the networking opportunities that the AICM offers.

Neil is a Chartered Accountant and Justice of the Peace, with a background in public practice in taxation and auditing and have also performed some contract accounting roles. Neil is also a qualified property valuer with a Graduate Diploma in Property and a member of the Australian Property Institute. Furthermore, Neil has successfully completed the ARITA course in 2015 with advanced standing and was made a professional member in 2017. At Worrells, Neil is responsible for the running of our Eyre Peninsula office which is based in Whyalla.

In his spare time, Neil was previously involved with the Henley Football Club and performed the role as treasurer from 2009-2011. Currently, Neil is a patrolling surf life saver at the West Beach Surf Life Saving Club and competes in surf boat rowing.

The Australian Institute of Credit Management welcomes our Partners for 2020.

National Partners

Trusted Insights. Responsible Decisions.

Thank you to our departing councillors The SA Division Council of the AICM is sad to see Gina Thorpe, former Councillor of the YCP, and Lisa Anderson, former Councillor of Media to leave the council, however, are extremely grateful for their outstanding contributions to the AICM. Gina took an active role in Gina Thorp. mentoring and assisting YCP candidates, and Lisa did a fantastic job of ensuring that the AICM magazine had valuable contributions from SA credit professionals.

We wish Gina and Lisa all the best for their future endeavours, and look forward to seeing them at future events.

Lisa Anderson.

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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63

DIVISION REPORT

Meet councillor

DIVISION REPORT

Western Australia/Northern Territory President’s Report

Camilla Radenti (SLF Lawyers), Troy Mulder (WA/NT Division President), Lisa McNicholas, Ryan Murray (both SLF Lawyers) and Raff Di Renzo (WA/NT Division Vice President).

Nirav Shah, Alex Cimetta, Joshua Franzone, Elny Martin and Mariana Pereira (all SV Partners).

Great venue for the end of year event – well done to our organisers!

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“Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it’ was a classic quote from 1986’s Ferris Buellers Day Off, and that is certainly the case as we face down the end of the 1st quarter of 2020.

The WA division farewelled 2019 with our annual EOY sundowner at Matilda Bay, overlooking the Swan River and the CBD skyline on a very warm evening. Those members and guests in attendance had the opportunity to recognise outgoing President, Lisa Marr, and to reflect on what had been another successful year for the AICM in the West.

And as most of us downed tools for the Christmas and New Year break, we watched as the east coast battled with devastating bushfires and more recently, heavy rain and flooding.

We know that it is and will be a challenging time for our east coast credit colleagues and our thoughts are with them and they go about assisting their customers in this time of hardship. On the other side of the world, the UK has finally left the European Union, the US Court Jester, I mean President was impeached and acquitted and now, the coronavirus is wreaking havoc with travel and tourism across the globe. Yep, it’s going to be a very busy year for credit professionals.

It has been a quiet start for the WA Division, with our first events kicking off in March with a series of Credit Toolboxes being conducted across three days in the CBD, details and registration links can be found on the website.

I strongly encourage all credit professionals to try and make use of these workshops for themselves and their staff; they provide fantastic content and real value.

Moving further into the year, we have our Economic Update in April, always a popular event with fascinating insights, a Corporate

Western Australia/Northern Territory

Jayne Neil, Robert Webster (both AMCAP Debt Recovery) and Claire Smith (Investigative Solutions WA).

Stella Hulm (Credit Solutions) and Melissa McVey (Amcap).

Frank Vredenbregt (Automotive Holdings) with Raff DiRenzo (Nova Legal).

DIVISION REPORT

Immediate Past Division President Lisa Marr receives flowers from Claire Smith (Equifax) and Kevin Allen (Life Member and WA/NT Division treasure).

Insolvency Workshop slated for May, our first ever Specific Hardship Workshop, more Credit toolboxes and then we move into our ‘Awards’ season, with the prestigious Women in Credit Luncheon in June and the YCP Gala Dinner in August.

I, and the rest of the WA Divisional Council are excited about what is to come for the division in 2020.

We have discussed a number of consumer credit focused initiatives with new AICM Consumer Director, Debbie Leo MICM as well as looking to re-invigorate our functions and events, whilst building on the success of the WinC initiative and a strong candidate pool for our YCP programs.

I have no doubt that it will be another successful year for the AICM and look forward to sharing that success with all members over the course of the year.

– Troy Mulder MICM CCE WA Division President

Anna Kovalenko and Lauren O’Hearn (both AMPAC).

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DIVISION REPORT

Western Australia/Northern Territory

Jason Louis (BGC), Christopher Meadwell (Mediterranean Shipping) and Paul Saunders (AMPAC).

Jeremy Coote (BGC), Gareth Gammon and David Hurt (both WAIS).

Meet a WA Councillor

no way to go through life, son.” – Dean Wormer (Animal House). I like it because it is primarily a great piece of advice that comes from the main antagonist of the movie, showing his caring side – that he wants the students to become productive members of society.

Aside from work I enjoy: Investing and Economics – learning from Ray Dalio and Howard Marks in particular.

Baseball – It’s like cricket except harder, and you don’t have to stand out in the field for hours on end! And also tinkering with 4 stroke small engines.

Jeremy Coote Jeremy is a Credit Analyst at BGC (Australia).

He specialises in the Construction Industry and Commercial Trade Credit.

I kind of fell into this role when a previous role was made redundant 6 years ago with Lend Lease. I was tracking towards Cost Accounting from an Accounts Receivable base. The late Mike Murphy (past AICM National President) began my journey by taking a chance on me to handle assessing credit applications, without much in depth previous credit assessment experience. Under his tutelage I learned how to think critically and logically about the granting of trade credit.

After Mike’s passing, Jason Louis (2018 WA/NT Credit Manager of the Year) took the reins and has given me additional responsibility for making significant credit decisions requiring special consideration (including local business trends vs. sales requirements and general likelihood of adverse events) with or without security.

Jason recently allowed me to go to October’s National Conference in his stead. What an eye-opening experience!

Over the last several years we have reduced the turn-around time from an average of a week to within 24 hours for credit applications. This has allowed our sales teams to gain confidence that the back office is supporting their efforts out in the field to win work and keep the company ticking over, even during the prolonged construction downturn in WA. I volunteer on the AICM WA Council because it’s high time to give back to the credit profession and help promote the area of credit assessment in particular; because if you can keep the first part of the credit relationship tidy, the latter end should be a much more pleasant experience. I’m looking to lend a hand where I can to support (and if required, entertain) members across the state.

My favourite movie quote is: “Fat, drunk and stupid is 66

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

The Australian Institute of Credit Management welcomes our Partners for 2020.

National Partners

Trusted Insights. Responsible Decisions.

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.

Queensland DIVISION REPORT

Kirsty Gray and Maria Schandl (both Stoddart Group).

DHL Credit Team out in force to support Catherine Stenshagen.

President’s Report What a start to the year! After a very busy and challenging 2019, it seems the dial was turned up a few notches. Since the last report, we have all been impacted one way or the other by a litany of large scale disasters.

The latest being the COVID-19 outbreak in the 2nd largest economy in the world and a growing number of nations.

While the effects are hard to determine at this juncture in time, one thing is sure, we are in for a challenging and busy few months as there will be many disruptions to supply/demand and cash flows and credit will become a focus. It is always good to know that we are all part of an organisation comprising of so many professionals in the area of credit, with the sole purpose to educate, network and represent us.

I am pleased to inform you that we have a new councillor on the Queensland Division Council. Mervyn Mahoney of GNS Wholesale Stationers has volunteered to join council. Merv has had prior experience on council and we look forward to working with him.

I am always amazed by the dedication and enthusiasm that all councillors bring to the AICM and is very rewarding work. A big thank you to the team. If you are interested in contributing in some way, please don’t hesitate to reach out as we have many avenues, be it via sitting on council, or if you are time poor, joining one of our subcommittees and if education is your thing, we are also looking to increase the number of member trainers to assist with workshops. I encourage our members to continue to engage with the AICM through all the training and networking opportunities we provide. Knowledge is power and it’s important to stay as up to date and current in such uncertain times.

On the events front the Qld calendar has just gotten busier with the news that Brisbane will now host the 2020 national conference. We also have a packed agenda with lots of networking and educational opportunities. We recently had our first event of the year – our economics breakfast, which was a great way

External collections/mercantile agent of the year finalists – Angela McDonald (Optimum Recoveries), Ashleigh Mason, Annette Fabian (both National Collection Services) and Tim Sullivan (Optimum Recoveries).

to get a peek into the year to come and insights into a lot of reports that are used to gauge the health of the economy. We also have our national insolvency seminar coming up in March. This is lining up to be a great event and recommend people register early to secure a spot.

I encourage you all to keep an eye on the calendar for upcoming events.

I also wanted to take a minute out to speak on CCE, the AICM offers members the opportunity to test and showcase their knowledge via a classroom style exam or an online exam and essay submission. Given how much time we spend in continuous development, it is always a good idea to have something that helps signify your professional and academic achievements. If anyone would like to know more about CCE, don’t hesitate to speak to anyone at head office or on council as most of us have or are in the process of obtaining this.

Lastly, I wanted to thank all of our members who contribute to this amazing community of professionals and to our event supporters, state and national sponsors.

Without your support, we would not be able to achieve the goals of the AICM. We look forward to working together into the foreseeable future.

– Roger Masamvu MICM CCE Queensland Division President

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DIVISION REPORT

Queensland

Recruitment consultants of the year finalists – Siobhan Reynolds (people2people), Sam Wood (Troocoo), Jess Blakemore, Alyce McNally (both Ranstad) and Natalie Nicolaou (Robert Walters)

Credit managers of the year finalists – Catherine Stenshagen (DHL), Michelle Doherty (Hanson), Decia Guttormsen (University of Queensland), Ben Wheeler (sponsor of award – people2people), Michelle Kirkby (ERM Power) and Stacey Feaver (Silver Chef)

Our Amazing MC and Division Vice President Stacey Woodward.

Nickie Dalziell and Rozanne Durston (both DHL Express) Senior Credit Officer Nominees.

Pinnacles

Nominees for the award were: z Cathrine Stenshagen – DHL Express (Australia) Pty Ltd z Decia Guttormsen – The University of QLD z Fiona Doherty – Hanson z Michelle Kirkby – ERM Power z Stacey Feaver – Silver Chef

Our night of nights, the final BANG for the year! 2019 Pinnacles were held at the ever so hip and eclectic Cloudland. A beautiful urban oasis with a proud Brisbane history. The evening was hosted by our socialite and Vice President, Stacey Woodward. With so many amazing awards to get through, Stacey did an amazing job and we are most certain that it won’t be her last MC role for QLD Council – thanks Stacey.

The Pinnacles would not be possible without the support of all of our members and their involvement in the nomination process, so we would like to say a huge thank you to everyone who took the time to shine a light on their professional peers. To support each other and pay credit where it is due is something that the AICM holds close to their hearts. And we can’t forget our judges either – thank you judges!

Credit Supervisor of the Year: Congratulations Chad San Giorgio – DHL Express

Sponsored by Alloc8 Nominees for the award were: z Chad San Giorgio – DHL Express z Kirsty Gray – Stoddart Group

Senior Credit Officer of the Year: Congratulations Ashleigh Mason – National Collection Services

Sponsored by CreditorWatch

Here are all of the nominations and winners: Nominees for the award were:

Credit Manager of the Year: Congratulations Michelle Kirkby – ERM Power

Sponsored by People2People 68

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

z Ashleigh Mason – National Collection Services z Nickie Dalziell – DHL Express (Australia) Pty Ltd z Rozanne Durston – DHL Express (Australia) Pty Ltd

Queensland

Queensland Division Councillor Decia Guttormsen presents Angela McDonald (Optimum Recoveries) with her 15 year membership pin.

Jess Blakemore (Ranstad Australia) and Sam Wood (Troocoo).

Gail Lord (Hanson Construction) receives her 15 year membership pin from Councillor Decia Guttormsen.

Legal representative of the Year:

z z z z z

Congratulations Anna Taylor- Results Legal

Sponsored by Jirsch Sutherland Nominees for the award were: z Anna Taylor – Results Legal z Callan Peach – SLF Lawyers z Garrett Everson – National Collection Services

External collections/Mercantile Agent of the Year: Congratulations Angela McDonald – Optimum Recoveries

Sponsored by SLF Lawyers Nominees for the award were: z Angela McDonald – Optimum Recoveries z Annette Fabian – National Collection Services z Ashleigh Mason – National Collection Services z Dale Hannan – National Collection Services z Edward Sklavos – National Collection Services z Tim Sullivan – Optimum Recoveries

Recruitment Consultant of the Year: Congratulations Siobhan Reynolds – People2people

Nominees for the award were:

Allyce McAnally – Randstad Australia Jess Blakemore – Randstad Australia Natalie Nicolaou – Robert Walters Sam Wood – Troocoo Siobhan Reynolds – people2people

Consultant of the Year: Congratulations Katheryn Kershaw – National Collection Services

Sponsored by TurksLegal Nominees for the award were: z Katheryn Kershaw – National Collection Services z Ravina Krishna – CreditorWatch

Member Milestones 15 Year Membership Milestones for both Angela McDonald & Gail Lord. It got me thinking, what else happened 15 years ago that coincided with Angela and Gail becoming members? z Qantas launched its discount domestic airline Jetstar z Major earthquakes and typhoon in Japan resulting in Nuclear plant accident in Fukushima

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DIVISION REPORT

Susan Withers and Skie Stringfellow (both ERM Power).

DIVISION REPORT

Queensland

Student of the Year Judith Riley (Iplex Pipelines Australia) presented by AICM CEO Nick Pilavidis.

Economic Breakfast attendees: Steven Staatz (Vincents), Roger Masamvu (JBS Australia), Dean Pearson (NAB) and Decia Guttormsen (UQ).

z Martha Stewart convicted and sentenced to 5 months in prison z The Janet Jackson’s revealing Super Bowl half-time show with Justin Timberlake z Best Picture at the Academy Awards – Million Dollar Baby z Best Actor at the Golden Globes – Leonardo DiCaprio – The Aviator z ARIA Album of the Year – Jet – Get Born

coronavirus as we wait to see the true impact of both of these significant events.

Our President, Roger Masamvu, provided a brief session on CCE accreditation and we were very lucky to have some QLD CCE Dux recipients in attendance. We look forward to welcoming new CCE accredited members in this months’ online and face to face exams.

The Australian Institute of Credit Management welcomes our Partners for 2020.

Student of the Year Congratulations to Judith Riley of Iplex Pipelines Australia our very own Student of the Year. Judith completed her Diploma within 18 months which demonstrated a great commitment to her professional development. Each assessment displayed good research and knowledge relevant to the particular unit and how it was instrumental in the workplace. Based on her commitment, we have no doubt that Judith will be instrumental in driving the future of her organisation.

National Partners

Trusted Insights. Responsible Decisions.

Divisional Partners

Economic Update, CCE Breakfast and Exams A fabulous turn-out for QLD’s first event for 2020!

Dean Pearson, Industry & Business Economist from the NAB, joined us to talk all things Economy. We were all engaged with the insight that Dean shared, including how Australians think, our fear of the future and if we have a voice in shaping it. Who we trust and what our biggest concerns with the cost of living and the factors impacting our well-being. It was concluded that we all must go out and adopt a four legged friend, advice that I think it SPOT ON! We were also introduced to a new type of economy— the “Mullet Economy,” named after the ever so popular hair style which is strangely making a comeback!?

We couldn’t avoid the topics of bushfires and 70

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

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.

Victoria/Tasmania

President’s report Welcome to 2020. I’m excited with what’s ahead for this year. We have kick started our year on a high with membership engagement on the increase for VIC/TAS and we have locked down our Events and Professional Development days for the year.

The drive and the commitment by the Victorian State Councillors has built a great calendar of events for 2020.

Please check the AICM website for all upcoming events.

We are excited to have 3 new VIC/TAS Councillors join us officially. They have already embraced their portfolios and are looking forward to meeting you at our events.

They are: z Michelle Carruthers (Dichmann) – Senior Business Development Manager at CreditorWatch, who looks after the Publication portfolio and helps with Sponserships z Ricky Forster – Head of Collections at Axsesstoday, who looks after Portfolio for Consumer z Farhan Hossain – Manager – Operations (Banking and Commercial) at Recoveries Corporation, who looks after the Portfolio for Membership Farewell and big thank you to: z Alison Said, Credit & Payments Manager at AGL Energy who is taking some time out to enjoy motherhood, z Alison Malek – Senior Associate at Mills Oakley, Commercial Disputes & Insolvency and z Katheryn Kershaw who is taking time out to travel the world. Thank you for all of your help and contribution to the portfolios you have looked after over the years.

For the Tasmanian members, we are proud to announce that we are bringing WINC to you in Mid -June

this year. I’m looking forward to meeting you all face to face and to hear what we can do for you as our members.

Happy New Year to all of you and don’t forget to incorporate in your professional development the AICM events and sessions we will be running this year.

Looking forward to seeing you all at our next events.

– Sherif Hussein MICM CCE VIC/TAS State President

Pinnacle awards – what a night!

It was a great night to celebrate our winners, nominees and milestone members on Thursday 21st November at the Melbourne Marriott Hotel. Hosted by Sunny Sharma from Viva Energy, the night saw 140 attendees, a record turnout. The Pinnacles awards recognises leading performers in our industry, throughout the year. A grand sit-down dinner with flowing wine at a premium venue ensured a night of professionals letting their hair down, networking and celebrating the wellearned achievements of their colleagues. We are proud to mention the below finalists and categories winners.

CONGRATULATIONS and we look forward to seeing your careers flourish and what achievements 2020 brings for you. As for the 2020 Pinnacles, we certainly encourage you to nominate someone who you believe is exceptional.

Credit Manager of the Year Congratulations Joe Losinno MICM CCE – Ruralco

Sponsored by American Express Finalists: z Lilian Bougiouklis MICM – Ball and Doggett z Mary Petreski MICM CCE – Asahi Beverages z Patrick Barry MICM – Goodyear & Dunlop Tyres

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DIVISION REPORT

Victoria/Tasmania division council celebrating a fantastic 2019: Left side of table Robyn Erskine (Brooke Bird), Catrina Galanti (NCI), Sunny Sharma (Viva Energy), Michelle Carruthers (CreditorWatch), Katheryn Kershaw, Farhan Hossain (Recoveries Corporation). Right side of table Frank Gambera (McMahon Fearnley), Sherif Hussein (Interactive), Mary Petreski (Asahi), Lou Caldararo (Landmark) and Rex Cheng (CGU).

DIVISION REPORT

Victoria/Tasmania

Credit Supervisor of the Year finalists – Mark Hourareau (Optus) and Candy Cuesta (Dulux).

External Collections/Mercantile Agent of the Year finalists – Zoilin Keshishian (National Collections Services) and Judy Vurlow (McArthur Commercial Recoveries).

Consultant of the Year finalists – Brendan Sherry, Borna Boltuzic (both CreditorWatch), Artemis Vrionis (Sharp & Carter), Jeanne McArthur (McArthur Commercial Recoveries) and Katheryn Kershaw (National Collection Services)

CreditorWatch Team – Cathy and Gordon Porter, Michelle Carruthers, Borna and Katheryn Boltuzic, Brendan Sherry and Kelly, Danny and Virginia O’Neill and Jason Sutherlin.

Credit Supervisor of the Year

External Collections/Mercantile Agent of the Year

Congratulations Candy Cuesta MICM – Dulux Group

Sponsored by Alloc8 Finalists: z Mark Houareau MICM – Optus

Senior Credit Officer of the Year

Congratulations Judy Vurlow MICM – McArthur Commercial Recoveries Pty Ltd

Finalists: z Zolin Keshishian MICM – National Collection Services z Dale Hannan MICM – National Collection Services

Congratulations Martina Vucak MICM – Kingspan Insulation

Finalists: z Surinder Chopra MICM – Viva Energy z Karen Nicholas – Asahi Beverages

Legal Representative of the Year Congratulations Monique Milic MICM – Oakbridge Lawyers

Sponsored by Jirsch Sutherland Finalists: z Rebecca Fahey MICM – SLF Lawyers 72

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Consultant of the Year Congratulations Artemis Vrionis – Sharp and Carter

Sponsored by Turkslegal Finalists: z Borna Boltuzic – CreditorWatch z Brendan Sherry – CreditorWatch z Jeanne McArthur MICM – McArthur Commercial Recoveries z Katheryn Kershaw MICM – National Collection Services

Victoria/Tasmania

Josie Armao of Pinnacle Premium Sponsor American Express welcomes attendees to the night.

DIVISION REPORT

A big thanks to our wonderful MC Vic/Tas Councillor Sunny Sharma who was magnificent.

Legal Representative of the year – Monique Milic (Oakbridge Lawyers) and Rebecca Fahey (SLF Lawyers).

Dulux team – Natasha Clarkson, Chris Tabone, Thomas Francis, Gareth Godfrey, Donna McNaught, Tai Iuli, Sarah Mcguigan, Larissa Amery, Sue Horkings, Sophie Robinson, Candy Cuesta, Mary Karvelis, Sandra Kohlman. Back row, Cain Lacey, Debbie Taramai, Mark Ralphsmith and Bart Van riel.

Member in the spotlight

Meet our new Councillor

Melissa Rhook

Ricky Forster

Credit Manager TASCO Petroleum

Head of Collections at Axsesstoday

Melissa has reached 15 years as a member of the AICM! Congratulations!

Melissa is a very humble person, family orientated and a bit of a foodie.

Based in Albury, she, along with Katie and Marg, run a tight ship on their accounts, they have seen it all.

She’s been in the Petroleum industry since 1990 and is proud to be part of such a changing and competitive industry. Melissa is especially honoured to be working for a family owned business that’s been running for 60 years, TASCO Petroleum.

She enjoys keeping up to date with the credit industry via the AICM website and magazine. When I asked her what advice she would give to a young person starting out in credit, she simply said “do the courses that the AICM offer, they are a great learning opportunity and starting point”.

With over 20 years’ experience across a number of different organisations, I have been responsible for developing, implementing and managing high performance credit and collections teams.

I have worked with organisations such as General Motors, Liberty Financial, Sensis and Axsesstoday, which has allowed me the opportunity to work in a number of different credit and collections disciplines in both consumer and commercial.

I am volunteering at the AICM because I am exceptionally passionate about our industry and I believe the AICM is pivotal in the development, education and success of our credit professional careers now and into the future.

The AICM is an exceptionally underutilised

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Victoria/Tasmania

Membership Pin recipients Donna Smith (Reliance Recoveries), Allan Kawalsky (TurksLegal), Frank Gambera (McMahon Fearnley), Amaran Navaratnam and Janice Thomason (Cummins South Pacific)

Credit update breakfast panellists – Michael Jacobs (TurksLegal), Ingrid Ozols (Melbourne University) and Neil Smith (City West Water).

organisation in our industry and I am a strong advocate to ensure this organisation reaches as many credit professionals as possible.

We are so lucky to have an Institute such as AICM, and I want to be a driver to share the amazing exposure, support and opportunities members are afforded for being a member.

Outside of my work world I am a garden enthusiast with a strong passion for architecture, travel and family.

workplace and community, mental health and suicide prevention lived experience advocate, educator, and peer support consultant with more than 19 years in the field.

As founder and managing director of Mental Health at Work (mh@work®), Ingrid consults to businesses, government and non-government organisations offering a variety of related innovative programs and services.

Improving workplace understanding and skills around mental health, suicide prevention from face to face evidence based approaches to strategic sustainable planning and implementation to create supportive cultures. The key take away from the session was that although we all have KPI’s to adhere to, it is important to remember the human element of our roles. If you or someone in your team is struggling with the darker aspects of their work, reach out and let them know they are not alone. The AICM is here to support our members as our members support each other.

Credit Update – Breakfast AICM members braved the early morning fog of Thursday 13 February to make their way into TurksLegal Rialto Offices. With the recent bushfires up the East Coast of Australia, the theme for our first Credit Update of 2020 was “Hardship”.

Members enjoyed strong coffee and bacon and egg rolls (or fruit cups for the healthy types) and caught up on their Christmas breaks. Then it was down to business.

Michael Jacobs started us off with an instructional presentation on corporate hardship. Michael is Special Counsel in Turkslegal’s Commercial Group and has over 30 years’ experience in banking, insolvency and commercial disputes. He joined TurksLegal in 2010 and has most recently been extensively engaged in failed managed investment scheme portfolio recoveries.

Followed by Neil Smith, who discussed managing hardship as a credit manager. How to motivate your team and keep them trained up and an innovative idea; why not treat sole traders and small partnerships as consumers when dealing with hardship? Neil is currently Credit Manager at City West Water and a former AICM councillor.

We finished up the session with a moving presentation from Ingrid Ozols. Ingrid is a Senior Fellow, Department of Psychiatry at Melbourne University and is an active 74

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

– Catrina Galanti MICM CCE Vice President Vic/Tas

Saying goodbye to Katheryn Kershaw Katheryn has decided to work while travelling the world; her first stop is Bali. Why not! She is incredibly organised, smart, tech savvy and such a lovely person to work with which is why she will be missed.

Katheryn did a great job looking after sponsorship and nothing was ever too hard a challenge for her.

We are looking forward to hearing all her stories when she returns and would welcome her back to council in a heartbeat.

Victoria/Tasmania

Vic/Tas Vice President Catrina Galanti with Ineke Carey (Noble Systems).

Things for the radar

Upcoming events

The Treasury Laws Amendment (Combatting Illegal Phoenixing) Bill 2019

14th April – Motivating High Performers 24th April – YCPA Info Session 15th May – Women in Credit – Victoria 5th June – Economic Update Breakfast 19th June – Women in Credit – Tasmania

On the 5 February 2020 the above bill was passed by the Senate. While it is aimed to strengthen the laws for those involved in Illegal Phoenix activity it remains to be seen if it will significantly reduce the occurrence of Illegal Phoenix Activity. Certainly, the new laws provide for criminal penalties to apply for those found to have engaged in Illegal Phoenix Activities or those who have engaged in creditor defeating dispositions. Credit Professionals need to be aware however that these amendments are all about Illegal Phoenix Activities not Legal Phoenix Activities.

Legal Phoenix occurs when a company which maybe in debt, sells for fair value, its assets to a new company.

The new company commences trading, often from the same premises doing the same business under the same or similar name, albeit with a new ACN/ABN as it is a new and different legal entity. This type of behaviour is not caught by the new laws but still can leave many creditors unpaid. The difference between illegal and legal phoenix behaviour is all about whether the assets sold are sold at fair value and it is not about leaving creditors unpaid.

Also buried within this legislation is the introduction of personal liability for directors for unpaid GST. This now means that once this law receives Royal Assent in the coming weeks, that directors of companies can be personally liable for unpaid GST as well as PAYGW and unpaid superannuation. Credit Professionals need to be vigilant as there may be some directors keen to avoid the looming personal liability, who move to place their company into liquidation or voluntary administration, prior to the laws taking effect.

Credit Professionals while they can take some comfort in this legislation cannot relax and it continues to be as important as ever to know your customer!

DIVISION REPORT

Credit breakfast attendees listening attentively to our panellists.

The Australian Institute of Credit Management welcomes our Partners for 2020.

National Partners

Trusted Insights. Responsible Decisions.

Divisional Partners

CREDIT MANAGEMENT SOFTWARE

Official Division Supporting Sponsors

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

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New South Wales

Credit Manager finalist Julie Rojas (Rentokil) award sponsor Robert Lowe (American Express) and Simon Holloway (Holcim).

Credit Supervisor award sponsor Trevor Middleton of Cosyn – regional distributor of Alloc8 with finalists Nicola Kyprianou (Optus) and Stuart Nichols (Dimension Data).

President’s Report A warm welcome to our members and partners for 2020.

In the wake of the bushfires, flooding and now the coronavirus scare it has been a tumultuous summer. With that said, we hope that our members, and their families, are safe and well.

We are well and truly into what is shaping up to be a great year, and for the first few months of 2020 the NSW Council have been working to ensure our Division Partners AMPAC with their team and guests Back row: Miral Sarviya, Deborah Green, Carlo Naves, Chris Lagana (Netstrata), Babita Behari (Qube), Bill Edmonds, David Ryan, members are engaged, energised Joanne Degenkolbe, Balveen Saini (NSW Division President), Anthony Stevanja. and excited about the year to Front Row Mark Logue and Nicole Zou. come. All of this is with thanks to our National and Divisional Information and Networking evening on 2 April 2020.

Partners for their continued support in ensuring that The dedicated WINC committee will be hosting the quality events and education is paramount.

NSW luncheon on 22 May 2020. Please lock this date In an effort to ensure there is more consistency and into your diaries as not only is it a wonderful afternoon uniformity with the level of education nationally, NSW will with your credit professional colleagues, but you will be be the first state to hold the National Insolvency Seminar. supporting a valuable charity.

In collaboration with ARITA and a committee of credit, We hope to see you getting involved and enjoying legal and insolvency professionals, on 12 March 2020, the what the AICM has to offer at the abovementioned AICM will be hosting the NSW seminar, with the other events, over the coming months. states to run theirs over the coming month. The feedback from the members, and participants, in 2019 was fantastic – Balveen Saini MICM CCE so we are looking forward to another quality, educational NSW President and insightful afternoon.

We are all working to motivate our members, councillors and board members who are eligible to sit NSW – Pinnacle Awards the CCE exam, to do so, and enrol in the 6-9 March 2020 Over 150 guests enjoyed the 2019 Annual Pinnacle exams.

Awards that were held on 21 November at the spectacular We are getting ahead of the game this year and Hyatt Regency. calling out to our potential Young Credit Professional The night offered a welcome celebration to all plus candidates by hosting a Young Credit Professional entertaining moments and awards for those who had 76

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New South Wales

Membership Pin Recipients – Sharon French (Equifax), Robyn Whitehouse (Ecolab), Nicole Chesher (Automotive Holdings), James Van Poppel (Commercial Credit Services), Gregg Odlum (Automotive Holdings), Frank Merrit, Christine Vincente (Fletcher Insulation), Babita Behari (QUBE Logistics) and Anthony Stevanja (AMPAC).

excelled in their chosen credit profession during 2019.

The finalists in their categories were:

Senior Credit Officer of the Year finalists – Ben Pettit (Veolia), Kim Puckeridge (Transurban) and Novka Krnetic (Southern Steel).

Sharon Speakman, Marcia Voller, Vanessa Laevsky, Brooke Sutton (all CNH Industrial) congratulate Marcia on her win of the Recruitment Consultant of the Year.

Recruitment Consultant of the Year Congratulations Marcia Voller – CNH

z Debbie Hannaford MICM – Veritas Recruitment z Paul Clarke MICM – Trace Personnel

Consultant of the Year Congratulations David Jovanov MICM – ARMA Recoveries

Senior Credit Officer of the Year

Sponsored by TurksLegal z Adam Mercurio MICM – Creditorwatch z Amanda Best – AON z Matt Jackson MICM – Creditorwatch z Paul Mead MICM – CreditorWatch z Trevor Middleton MICM – Cosyn Software

Congratulations Kim Puckeridge – Transurban

Sponsored by Alloc8 z Ben Pettitt MICM CCE – Veolia Group z Corrine Riley MICM – Graincorp z Novka Krnetic MICM – Southern Steel

External Collections/Mercantile Agent of the Year

Credit Supervisor of the Year

Congratulations Lydia Nemes MICM – Optimum Recoveries

z Stuart Nichols MICM – Dimension Data

z Chris Hayes MICM – Ellite Collections Pty Ltd z Joanne Degenkolbe – Ampac

Credit Manager of the Year

Congratulations Nicola Kyprianou – Optus

Congratulations Julie Rojas MICM – Rentokil

Sponsored by American Express z Simon Holloway MICM CCE – Holcim Australia

Legal Representative of the Year Congratulations Luis Ormazabal MICM – BBW Laywers

For the first time a silent auction was run at the back of the hall, in aid of the AICM Education Foundation. The

Sponsored by Jirsch Sutherland z Anna Taylor MICM – Results Legal

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Fiona Reynolds (TurksLegal) with finalists for the Consultant of the Year – David Jovanov (ARMA Recoveries), Paul Mead, Matt Jackson, Adam Mecurio (all CreditorWatch) and Trevor Middleton (Cosyn Software).

DIVISION REPORT

New South Wales

Maja Dunimaglovska and Vaidehi Bhatt (both Equifax).

Brad Morton (Corsair Solutions), Steven Lamb (Brickworks) and France Olazabal (American Express).

auction ended up being a live auction with fantastic participation from several well know faces in the industry. Andrew Smith of ARMA and Bill Edmonds of AMPAC both picked up major prizes, courtesy of Trace Personnel and Netstrata.

An exciting addition to the night was the presentation to Gregg Odlum of his life membership on account of his long and ever loyal Alek Pappas, Jan Reeves (both Get Paid), James Hunt, Simon Holloway (both Holcim), Trevor Middleton (Cosyn Software) and Christine Vincente (Fletcher Insulation). service to the Institute.

Following the formal part of the evening, it was upstairs to the rooftop bar to round and pride to be recognised in any small way within the off 2019 in the best way possible. Thanks to the AICM industry. event organisers and sponsors for making it all happen.

Between 2009-2018 she was an active member in training/conferences/networking events. In 2018 she completed her CCE, joined AICM Council and won NSW Credit Manager of the Year winner at the annual Pinnacle Meet a NSW Councillor Awards. In 2019 she achieved 10 years membership with Theresa Brown MICM CCE the AICM. Theresa is Associate Director, Theresa loves spending time with her husband Corporate Credit Risk & Collections and two teenage daughters. She is passionate about at Optus and has been with the everything she does whether that be shopping, playing telco for 7 years. card/board games, going on bike rides, picnics or Theresa started her journey planning their next holiday! in Credit as a Junior in Accounts Receivable at Temperzone and then Senior Credit Controller, JJ Richards. Theresa had various roles NSW Toolbox session at other companies before starting at Optus in 2013.

– Fundamentals of Credit She loves to give back to the industry adding value Credit Toolbox courses are a unique opportunity to learn where she can. Theresa first attended an AICM event in and refresh on the fundamentals of Credit Management 2008 and was introduced to YCP program as a youngster. from Credit Professionals with extensive real-world This initial interaction filled her with much excitement experience.

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New South Wales Your credit can help you spot fraud. If you’re keeping an eye on your credit score and pulling your free credit report every four months, you’ll be much more likely to spot problems that indicate you could be the victim of identity theft.

Credit Quote of the Month

Grant Morris (Southern Steel Group), Natalie Kapovic (CreditorWatch), Mila O’Bryan and Nicola Wynne-Peters (both Hunter Douglas).

Courses are presented by Credit Professionals with extensive experience in credit management, are CCE’s and/or have held senior roles in many organisations and industries.

The courses have been designed by the AICM’s most experienced Credit Management Trainer to ensure all courses cover the fundamentals required to understand what and why credit professionals do what they do.

“There are two kinds of people those who do the work and those who take the credit. Try to be in the first group; there is less competition there” – Indira Gandhi

The Australian Institute of Credit Management welcomes our Partners for 2020.

National Partners

Trusted Insights. Responsible Decisions.

Meet a Sponsor Anna Taylor Principal at Results Legal

How long have you been working at Results Legal? I’ve been with Results for 10 years and I’ve been a Principal of the firm since 2016.

Divisional Partners

What are your passions aside from work? My family, my daughter Elke and my husband. F45 and running (slowly). Family beach time. My growing wine cellar.

CREDIT MANAGEMENT SOFTWARE

Official Division Supporting Sponsors

An interesting fact about yourself. I am known for making the best cheese/antipasto platters in my circle of friends and family.

What gets my goat A customer has just appointed a Voluntary Administrator after having been served a demand from the Liquidator of another company for $430K. The second company went into Liquidation 3 years ago. One doesn’t have to be a Rhodes Scholar to deduce the Liquidator’s demand is a preference claim. 3 years. Legal, ie within time constraints, but seriously.

Incidentally there is absolutely no relationship between the two companies.

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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Did You Know?

DIVISION REPORT

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

New South Wales

Victoria

Jamie Aaron Canon Thomas Arcadi CreditorWatch Emma Boyce Bartier Perry Jan Bride Canon Finance Phoebe Brosnan Gadens Timothy Buckley Gadens Christopher Conrad Canon Finance Ross Coutts Canon Finance Daniel Gonzalez QBE Yasmin Khouri Mitsbubishi Electrical Josephine Lim Canon Fuad Mahfuz Grow Asset Finance Lucy Martin Coil Steels Scott Mason Equifax Adam Mercurio CreditorWatch Toni Morrow Equifax Grant Penrose Canon Finance Australia Leanne Penza CreditorWatch Shyama Perera NTT Australia Imelda Setiawan Canon Finance Australia Danielle Stone Gadens Khyati Thakkar Toyota Material Handling Australia Pty Ltd

Steven Babos Leigh Baker Maddison Basso Teletha Bird Sean Brasher Nicole Bridges Zarah Butcher Andrew Buxton Skye Callinan Skye Callinan Johnny Chalhoub Claudine Coles Tracy Davey Monique Davis Debra Downham Kaitlin Duscher Dimitri Griek Jamie Griffin Lauren Hulstaert Natalie Jarvis Chathura Jayasekara Felicity Keenan Shelby Kostroa Cathy Lau Ranjan Mankar Danelle Molnar Tim Morosoli Thomas Mullavey David Murray Katrina Narracott Brigid Nichols Ahenk Ozirmak Maureen Petros Phillip Popovski Trudy Price Belinda Rees Tania Smith Harry Stirling Kirsty Targett Stephen Tayler Benjamin Teycheney Sandeep Viradia Esther Wagg Robert Warner Craig Williams Louise Wright Graeme York Dani Zheng

Queensland Jade Baird Property Compliance Australia Jos Basson Rostron Carlyle Rojas Lawyers Alida Chan Oakbridge Lawyers Michael Clay Puma Energy Renee Dobson NCI Chantelle Fisher Gimme Alia Hamid Rodgers Reidy (QLD) Pty Ltd Gordon Jones Gimmie Nicholas Lancaster Rodgers Reidy Hio Tong Lao Rodgers Reidy QLD Pauline Lowe BMI Group Pty Ltd Jason Madden Shine Lawyers Pty Ltd John McEniery Rose Litigation Lawyers Brisbane Pty Ltd Kasey Meddings Brisbane City Council Natalie Salter Brisbane City Council Liz Scott Gimmie Amy Steele Gimmie George Wolf CreditorWatch Joshua Wright Rodgers Reidy

South Australia Henry Lu Rachel Nelson Margaretta Prosilis Clare Venema 80

Oakbridge Lawyers Pty Ltd Mercantile CPA Viterra Ltd Oakbridge Lawyers Pty Ltd

CREDIT MANAGEMENT IN AUSTRALIA • March 2020

Woolworths Reece Axsesstoday Limited Woolworths REA Group Woolworths Axsesstoday Limited Axsesstoday Limited Woolworths Woolworths Axsesstoday Limited Urbis Woolworths Woolworths Woolworths Ltd Axsesstoday Limited QBE Rea Group Axsesstoday Limited Woolworths Axsesstoday Limited Woolworths Reece Axsesstoday Limited REA Group Reece Group Axsesstoday Limited Woolworths Woolworths Woolworths Woolworths QBE Australia Oakbrigde Lawyers Axsesstoday Limited Woolworths Allegion Woolworths Canon Finance Australia Pty Ltd Woolworths Reece Group Zipform Digital Axsesstoday Limited Axsesstoday Limited Biosis Pty Ltd Woolworths Woolworths REA Group

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 ADVISORY AICM Divisional Partner

SV Partners Suite 7, Ground floor, 26 St Georges Terrace Perth WA 6000, GPO Box 2527, Perth WA 6001 Tel: 08 6277 0026 Fax: 07 3229 7285 Email: perth@svp.com.au SV Partners is a national specialist accounting and advisory firm, with offices in the metropolitan and regional areas of each state, across the eastern seaboard. Our expert accountants and advisors have the skills and experience to assist across a wide range of areas, including insolvency, turnaround and advisory services for accountants, financial institutions, corporations, financial and legal advisors, and their clients.

COLLECTIONS

COLLECTION SYSTEMS

DISTRIBUTION & PRINTING AICM Divisional Partner

AICM Divisional Partner

Esker Australia Pty Ltd Suite 1502, Level 15, 227 Elizabeth Street, Sydney NSW 2000 Tel: 02 8596 5126 Email: info@esker.com.au Web: www.esker.com.au Cash is the heartbeat of your business, so give your AR department the tool they deserve! Esker’s AR solution help companies reduce costs for invoice delivery, accelerate their cash collection process and automate the reconciliation of payments.

Contact us to easily achieve your cash collection goals, tackle root causes of payment delays and reduce collection disputes while improving customer relationships.

AICM Divisional Partner

Lane Communications Tel: 08 8179 9900 Web: www.laneprint.com.au Lane are widely regarded as one of the largest and most technologically advanced print production and distribution companies in Australia. We are an industry leader in digital and offset print, point of sale signs, complex embellishments and print finishing, storage, kitting and mailing. With innovation at our core, our services extend beyond transactional mail and promotional print production to include SMS, bulk email communications, and electronic billing solutions. Lane are your partner in print and multichannel communications.

INFORMATION

AICM Divisional Partner CREDIT MANAGEMENT SOFTWARE

OnGuard 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.

CreditorWatch

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

GPO Box 276 Sydney NSW 2001 Tel: 1300 501 312 Web: www.creditorwatch.com.au CreditorWatch is a leading commercial credit reporting bureau used by over 50,000 businesses across Australia. CreditorWatch offers a variety of products including customer monitoring/alerts, credit reporting, an indepth trade program and online credit applications to assist with customer onboarding and decisioning. Contact us today for more information or to organise a FREE TRIAL of any of products.

AICM National Partner

AICM Divisional Partner

Trusted Insights. Responsible Decisions.

Australian Recoveries and Mercantile Agents Tel: 1300 363 394 Email: info@armagroup.com.au Web: www.armagroup.com.au ARMA is a specialist provider of contingent debt recovery solutions, outsourced accounts receivables and litigation services. ARMA was started with the aim to have fewer customers and provide better service.

We provide big agency expertise with a boutique service. The ARMA team has a wealth of experience in the debt collection industry across a diverse range of markets that was gathered from working at some of the largest collection agencies in Australia.

illion

Credit Solutions Unit 1/245 Fullarton Road Eastwood SA 5063 Tel: 08 8418 1450 Email: gcrowder@creditsolutions.net.au Web: www.creditsolutions.net.au Credit Solutions, a division of the Credit Clear Group. A debt collection partner you can trust.

Working with some of the country’s leading providers of information management and data intelligence solutions. Since 1965 Credit Solutions has set the benchmark for providing quality collection and recovery services to South Australian businesses and government.

AICM MARKETPLACE

Tel: 13 23 33 Web: www.illion.com.au Dun & Bradstreet has changed. We are now illion.

Bringing data, analytics and insights to life is at the heart of what we do, and we will continue to break new ground in the product development and innovation space. Our commercial and consumer databases enable Australian businesses and consumers to make informed decisions, based on real time data drawn from an extensive range of sources. We remain a reliable and trusted partner to a wide range of global organisations, who use our solutions for credit reporting, risk management, sales and marketing and receivables management.

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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 INFORMATION AICM National Partner

Equifax Tel: 13 83 32 Web: www.equifax.com.au Equifax is a global information solutions company, providing data and insights that help organisations and individuals make more informed decisions. As a leading provider of credit information and analysis in Australia and New Zealand, Equifax serves key markets in risk management, marketing services and HR solutions.

Drawing from trusted sources to compile and process data, Equifax helps its customers see things and make connections that others can’t.

INSOLVENCY AICM Divisional Partner

INSOLVENCY

LEGAL

AICM Divisional Partner

AICM National Partner

Rodgers Reidy

TurksLegal

Level 3, West Wing, 50 Grenfell Street Adelaide SA 5000 Tel: 08 8470 9010 Web: www.rodgersreidy.com.au Contact: Rob Naudi

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

The international insolvency network of Rodgers Reidy is uniquely resourced to specialise in turnaround and recovery strategies, corporate and personal insolvency. We aim to, wherever possible, rescue a company or individual in financial difficulty by designing arrangements that will return commercial viability, will benefit all stakeholders, and which avoid the need for liquidation or bankruptcy.

TurksLegal is a specialist commercial law firm with 33 Partners and over 160 staff across our Sydney, Melbourne and Brisbane offices. We are proud to look after the interests of trade creditor suppliers and financial institutions in: l Portfolio debt recovery using our market-leading, real-time client interface, ‘TurksFocus’ l Resolution of complex debt disputes l PPSA recovery l Defence of unfair preference claims l Supply documentation and guarantees.

LEGAL

TECHNOLOGY

AICM Divisional Partner

CreditSoft Solutions

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

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

Nova Legal Level 2, 50 Kings Park Road West Perth 6005 Tel: 08 9466 3177 Web: www.novalegal.com.au Nova Legal can assist with the recovery of problem debtors (large and small). Founding director Raffaele Di Renzo acts for creditors, debtors, directors, credit managers and insolvency practitioners in relation to solvency issues and dispute resolution.

Tel: 1300 720 164 Email: info@creditsoft.com.au Web: www.creditsoft.com.au Paypensity Australia, hosted by CreditSoft Solutions, is a machine learning model trained specifically for the Australian debt collection market. The model takes an agency’s internal information about a debt and combines it with CreditSoft’s rich debtor data and calculates the propensity to pay for each debtor whilst also identifying early consumer hardship flags.

TRADE CREDIT INSURANCE AICM Divisional Partner

National Supporting Sponsor

Insolvency Intel

Results Legal

Tel: 1300 265 753 Web: www.insolvencyintel.com.au Email: answers@insolvencyintel.com.au

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

National Credit Insurance Brokers

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.

National Credit Insurance Brokers (NCI) has established itself as the premier trade credit insurance broker in Australia, New Zealand and Singapore. Trade credit insurance is a highly specialised area of insurance and, with its 30 years of experience, National Credit Insurance Brokers has developed an unmatched depth of expertise in arranging the right protection at the best price for your particular trading needs.

Insolvency Intel: a subscription-only provider of insolvency and turnaround services for credit managers. Backed by national firm Jirsch Sutherland, our friendly team is just a phone call or email away, providing members with practical, strategic advice about corporate and personal insolvency. Free initial consultation; networking opportunities; training and presentations; knowledge database access; regular newsletters.

Register now for a free subscription.

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Tel: 1800 882 820 (freecall) Email: info@nci.com.au Web: www.nci.com.au

AICM MARKETPLACE

2020

SAVE THE DATE SA VIC NSW WA TAS QLD

Friday, 8 May 2020 Friday, 15 May 2020 Friday, 22 May 2020 Friday, 5 June 2020 Friday, 19 June 2020 Friday, 21 August 2020 PREMIUM SPONSOR

SUPPORTING SPONSORS