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Volume 20, No 4 May 2013

CREDIT MANAGEMENT IN AUSTRALIA • May 2013

SA Division: Barry Phillips (left) and Lindsay Chuck at the Credit Focus.

29

VOLUME 20, NUMBER 4 – May 2013

Presidents Report 2

2013 AICM National Conference 3

OutsourcingDoes Outsourcing Pay Off When Managing Bad Debt? 6By Terry Franklin and Denise Tipping

Legal RecoveriesOn Which Documents Must a Company Set Its ACN? 10By Peter Ryan

CollectionsHave You Tried Everything With Your Written Off Debts? 12By Adam Dayeian

Credit ManagementHey Congratulations – Well Done 13By David Searle

The Hidden Side of Credit 16By Gareth Jones

SME’s are at Risk of Significant Financial Losses 18Due to Lack of Awareness and understanding of the Personal Properties Security Register

Credit Managers – Any room left on your desk? 22By Trevor Goodwin

QLD Division: Membership Chair Erica Barron (R) presenting Tarnya Lowe (L) with her membership certificate.

32

CONTENTS

Adam Dayeian

12

Peter Ryan

David Searle

13

Trevor Goodwin

Gareth Jones

22

16

10

EDITOR/PUBLISHERTerry Collins

Email: [email protected]

CONTRIBUTING EDITORSNSW

Murray Ashford QLDGail Watt SA

Christine Ashworth WADonna Smith VIC/TAS

ADVERTISING MANAGERTony Paul

Association MediaTel: 0401 917 799


EDITING & PRODUCTIONAnthea Vandertouw

Ferncliff ProductionsTel: 0408 290 440


PRINTINGJohn Fisher Printing114-118 Victoria Rd

Marrickville NSW 2204Ph: 9516 1588

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 1, 619 Pacific Highway, 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, 2013.

FEATURES

July 2013Human Resources

Insolvency Practitioners

October 2013Export and Credit Insurance

Mercantile AgentsA Special Edition to Coincide with

the National Conference

EDITORIAL CONTRIBUTIONS SHOULD BE SENT TO:

The Editor, Level 1,619 Pacific Highway

St Leonards NSW 2065or Email: [email protected]

May 2013 • CREDIT MANAGEMENT IN AUSTRALIA

NSW Division: Youth Network Night – Winning Team.

34

Credit ManagementYoung Credit Professionals Awards – Alison Said 24Gaining Recognition and Advancement in the Credit Industry

Survey reveals corporate overdue payment in Asia Pacific region 26deteriorated in 2012Companies are less optimistic about recovery of global economy in 2013

Around the States

New Members 29South Australia 29Queensland 32New South Wales 34Western Australia/Northern Territory 37Victoria/Tasmania 40

VIC/TAS Division: Golfers enjoying themselves at the Vic/Tas golf day.

40

Association Mediafor advertising opportunities in

Credit Management in Australia

CALL Tony PaulPhone: 0401 917 799


DIRECTORS

Australian President G.L. Morris MICM CCE

Australian VP Law & RegulationJ.A. Neate MICM

Professional DevelopmentE.R. Verge MICM CCE

YCPA & CCER. Freier MICM CCE

Member ServicesJ.G. Hurst FICM CCE

FinanceN. Pilavidis MICM CCE

CHIEF EXECUTIVE OFFICERT.J. CollinsLevel 1, 619 Pacific HighwaySt Leonards NSW 2065Tel: (02) 9906 4563Fax: (02) 9906 5686Email: [email protected]

EXECUTIVE OFFICES

Queensland DivisionLevel 1619 Pacific HighwaySt Leonards NSW 2065Tel: (02) 9906 4563Fax: (02) 9906 5686Email: [email protected]

NSW DivisionDeborah MannersLevel 1619 Pacific HighwaySt Leonards NSW 2065Tel: (02) 9906 4563Fax: (02) 9906 5686Email: [email protected]

VIC & TAS DivisionPeter KerlinPO Box 131Wendouree VIC 3355Ph: 0417 717 015Fax: (03) 9303 8911Email: [email protected]

SA DivisionKerry HammillPO Box 2131Felixstow SA 5070Tel: (08) 8365 9021Fax: (08) 8365 9021Email: [email protected]

WA DivisionRon AdamsPO Box 8463Perth Business Centre WA 6849Tel: (08) 9427 0816Fax: (08) 9427 0817Email: [email protected]

2 CREDIT MANAGEMENT IN AUSTRALIA • May 2013

aicmf rom the p res iden t

There were some great articles in the previous magazine and one in particular sticks in my mind. Not because it was written by David Searle, a colleague

of mine at Coates Hire, but because it drew on experiences of the credit profession more than a century ago. In David’s review he quotes from the 1897 publication “ The book opens with the qualifications needed. These included honour, discernment, firmness, memory, tenacity and good address among others. Then 15 chapters explore topics such as: Valuable Information and Methods of Obtaining It, Salesman and the Credit Man, Mercantile Agencies – Their Use and Abuse, Treatment of Slow, Doubtful or Desperate Accounts, Cannot Credit Men Be Too Careful.”

It set me thinking about the talent, skills and experience that lies within our profession and this has been reinforced by the stories in this issue from some of our longer serving members. In the NSW Around the States section you will see comments from Reg Wilkinson who has been a member for 40 years and Harry Carroll for 25 years – yes the days of Woodstock, flower power and the Vietnam War and our Bicentenary. Please take the time to visit their stories.

We have a great depth of talent and this talent grew from the old days when we all had someone who taught us the ropes and explained what credit was really all about. In those days there was no formal study or courses. We didn’t have Certificates III or IV, Diplomas or CCE or the myriad of seminars now offered by the AICM to up-skill us in an ever changing and complex legal environment of PPSA, Privacy and Competition and Consumer Acts etc.

Sure we use new talents and skills, be they electronic or data, but don’t these new skills simply provide a greater and broader depth of data and the means to “shuffle more paperwork” faster?

What we really need is to draw on the past depth of experience and knowledge, in other words mentors, and combine that with modern skills and ideas.

The role of mentor is not taught. We see it in others. It is a crucial role and part of being professional. Any contribution to better the credit industry and to teach is surely worthy.

We are a self-policing sector of industry. Good practices are taught and shonky practices are shunned. There is a key role for mentors, be they senior people or younger team leaders on the rise. Understand that role and enhance your own standing, reputation and professionalism by being an active mentor. Share your time and experience, develop staff and be active in attending events.

AICM can help us with this.We still supervise and advise, share our experience

and develop our staff, but do we actively encourage their involvement with AICM?

Do we identify courses or events for them and attend these events with them? Do we share our knowledge, not just with our own team, but others at these events?

Do we coordinate their membership through the group membership scheme or explain why professional membership is a way to progress a career? Very importantly, do we nominate and support them for entry into the Young Credit Professional of the Year or the Credit Team of the Year awards? To push them to new levels and achieve state and national recognition.

The AICM Young Credit Professional of the Year competition is sponsored by Dun and Bradstreet and is currently underway. It is an excellent opportunity to recognise and develop individual talent within your team and provide them with a potentially life changing experience with fantastic career enhancement opportunities.

The AICM Credit Team of the Year award is sponsored by Veda and is also presently underway. It is an invaluable experience which draws a team together like no other event. For serious results and team building go beyond team activities like barefoot bowls and enter your team in this competition.

Winning either of these awards provides national recognition which is unrivalled both inside and outside your business and if you do nothing else with your team this year you should enter them in one or both competitions.

The Personal Property Securities Act has had a major impact on Australian business and particularly the Credit Profession. The new Privacy Reforms will dwarf that experience. The changes affect all businesses in Australia and require immediate planning and action for you to be ready for them when they come into effect next March. If you haven’t already done so I urge you to get started now on bringing yourself up to speed and implementing the necessary changes before you are embarrassed by fines and penalties. No one wants to be known for having breaches of the Act.

The Around the States section of your magazine features an Events Calendar detailing all upcoming events. I would encourage you to look at the line up and get along to the next event. Perhaps you could mentor some of your team, renew old contacts or, heaven forbid, make a new one. I recently attended the Youth Network Night in Sydney with 55 others and had a ball. It was a fun night and although not winning the trivia competition I still left in good spirits and with renewed contacts.

In closing I must remind you of our National Conference in Adelaide. The subject matter is worthwhile and appropriate to us all and the substantial endeavours and enthusiasm of the South Australian Division of the AICM promise to make this the best ever National Conference. See you in Adelaide in October.

Grant Morris CCEAustralian President

Visit aicm.com.aufor details and earlybird registrations

See you at AICM’s

Hilton Adelaide23-25 October 2013

ConferenceConference2013 National2013 National

NationalConference2

013

2

Conference Delegate Registration form

23rd – 25th October 2013 Tax InvOIce

Personal Details (please print clearly)

Title: .......................... Given name: ............................................................................................. Family name: .............................................................................................................................

Preferred name for badge: ................................................................................................................................................................................................................................................................................

Job title: .................................................................................................................................... Company name: ........................................................................................................................................

Billing address: .............................................................................................................................................................................................................................................................................................................

Work Telephone: ..................................................................................................................................... Work fax: ...................................................................................................................................

Email: .....................................................................................................................................................................................................................................................................................................................................

Dietary requirements: .............................................................................................................................................................................................................................................................................................

Registration and fees (All prices include GST) – Conference Registration includes dinner

combined Member Non Member

(Conference & Workshop) Early bird to 30/8/13 $1190 Early bird to 30/8/13 $1530

from 31/8/13 $1240 from 31/8/13 $1590

conference Only Member Non Member

Early bird to 30/8/13 $990 Early bird to 30/8/13 $1310

from 31/8/13 $1070 from 31/8/13 $1360

Please indicate if you are attending the President’s Dinner: (included in conference registration fee)

President’s Dinner Yes No

Workshop only Member Non Member

Early bird to 30/8/13 $255 Early bird to 30/8/13 $365

from 31/8/13 $275 from 31/8/13 $385

Please find enclosed cheque of $.................................. or I authorise $.................................. to be deducted from my credit card

Cheque Mastercard Visa Amex Diners

Card No: Security No.: .......................... Exp. Date: ............/...............

Card Holder’s Name: ........................................................................................................................... Signature: .........................................................................................................................

EFT Bank details: Commonwealth Bank, Artarmon BSB 062 104 Account no 1003 9560

Fax this full page to AICM 02 9906 5686 to confirm your conference attendance.

OR post to: Australian Institute of Credit Management – Level 1, 619 Pacific Highway, ST LEONARDS NSW 2065

ABN: 79 008 455 758

NationalConference2

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3

Partners and Guests Registration form

23rd – 25th October 2013 Tax InvOIce

Please complete one form per person

Partner or guest details (please print clearly)

Title: .......................... Given name: ............................................................................................. Family name: .............................................................................................................................

Preferred name for badge: ................................................................................................................................................................................................................................................................................

Dietary requirements: .............................................................................................................................................................................................................................................................................................

Bill to (name): .......................................................................................................................................... Signature: .......................................................................................................................................

Billing address: .............................................................................................................................................................................................................................................................................................................

Registration and fees (All prices include GST)

President’s Dinner

Thur 24 October 2013 $145 Per Person

Please find enclosed cheque of $.................................. or I authorise $.................................. to be deducted from my credit card

Cheque Mastercard Visa Amex Diners

Card No: Security No.: .......................... Exp. Date: ............/...............

Card Holder’s Name: ........................................................................................................................... Signature: .........................................................................................................................

EFT Bank details: Commonwealth Bank, Artarmon BSB 062 104 Account no 1003 9560

Fax this full page to AICM 02 9906 5686 to confirm your conference attendance.

OR post to: Australian Institute of Credit Management – Level 1, 619 Pacific Highway, ST LEONARDS NSW 2065

ABN: 79 008 455 758


Outsourcing

The collection of overdue accounts and recovery of unpaid debt is a critical component of every major credit granting organisation. The ability to recover monies due and manage risk effectively is a key component of the performance of every business. If you consider that the profits earned from many good accounts will be wiped out immediately by one bad account then the importance of effective collections and recoveries strategies and processes becomes very apparent

The decision to outsource more seriously delinquent accounts or written off accounts is now considered standard practice in the process of managing delinquent accounts. This is largely due to the ability to reduce direct internal costs and shift these to success based indirect costs. The management of accounts on behalf of the credit issuer is commonly known as contingency collections and is the primary focus of this article.

The question of whether to use a Debt Collection Agency (DCA) or not is generally down to a simple equation; does the approach generate more net recoveries without any detrimental impact on reputation. This may extend to selling debt either on an ad-hoc basis to clear historic non-performing debt or on a forward flow basis where debt of a specific age or after a pre-determined set of processes is sold to the DCA. A further question that results from the choice to outsource debt collection activities is ‘are we optimising the benefits and minimising the risks?’

Types of accounts commonly outsourcedBefore attempting to answer this question let’s identify the type of accounts that are commonly outsourced:

l > 90 day delinquencies l Written off accounts l Litigation required l Alternative action required, e.g. field

investigation or door to door visit l Accounts where accelerated

treatment has been recommended – Unlocatable (gone away / trace)

or too costly to locate – ‘unwillingness to pay’ where there

are believed to be assets or cash flow to service the debt

We will look at the tools and levers deployed by those agencies and how best to manage relationships and achieve strong performance. We will also investigate the tools and techniques being deployed in some markets to ensure that debt liquidation expectations are realised and bad debt levels minimised.

Benefits of outsourcing debt collection activitiesEconomies of scaleThe expectation is that DCA’s will be more efficient due to the volumes of accounts on which they are collecting together with their ability to spread fixed costs over greater volumes – leading to a reduced cost of collection per account.

Better toolsThe increased volumes handled by a DCA will also allow them to invest in more sophisticated technology and analytics than the average credit provider can

Does outsourcing pay off when managing bad debt?Co-Authors:Terry Franklin, Collections Consultant (Experian Global Consultancy)Denise Tipping, Consultant (Experian Global Consultancy)

Denise Tipping

Terry Franklin

May 2013 • CREDIT MANAGEMENT IN AUSTRALIA 7

Outsourcing

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The question of whether to use a Debt Collection Agency (DCA) or not is generally down to a simple

equation; does the approach generate more net recoveries

without any detrimental impact on reputation.

justify for the relatively small number of seriously delinquent accounts on their book. Leading practice organisations invest in analytical decision engines to enable interpretation of vast quantities of data in order to determine strategies and apply the most appropriate treatment paths for collection and recovery. Ensuring the right treatments are applied in line with the segmentation and strategies set through the decision engine is critical. These systems manage pre-legal collection activities quickly and efficiently with collector involvement only ever applied where contact has been successful or a valid query has been raised which needs resolution. With integration to tertiary systems such as predictive diallers, SMS distributors, payment portals and print houses a DCA can drive huge efficiencies and economies of scale. These systems also manage the litigation and/or door to door recovery phases where appropriate. The application of fees and charges to either the customer account or in a shadow balance are also facilitated here, ensuring that balance details are up to date and relevant during and dialogue with the customer.

Controlling costsMoney collected per positive contact, for more seriously delinquent or other ‘collection activity accelerated’ account results, increases the average cost of

collections. The ability to transfer a direct cost to a ‘success based’ cost through outsourcing generally results in overall cost savings to the credit provider.

Data AccuracyAs a general rule, DCA’s invest in data cleansing services at point of acquisition and the more sophisticated organisations have dynamic phone monitoring techniques in place to identify new numbers from various sources to ensure there is every opportunity to make contact

Data Recency – up to date peripheral data Bringing relevant data such as a customer’s asset portfolio, employment history or whether they have settled previous debts following legal action

or post default, will better inform the collection action that should be taken for a customer.

In many markets, sharing payment performance data and establishing links from one address to the next, provides organisations with excellent insight to the behaviour of a potential customer; and credit applications have long been assessed using this type of data to aid risk assessment. In Australia, the permissible activities will be subject to the Credit Reporting sections of the recently amended Privacy Act.

Data matchingThe use of a credit bureau can offer significant advantages to leading DCA practitioners, enabling them to link the same customer across multiple products or accounts through bureau matching


Outsourcing

routines. This data is predictive and through the application of analytics can be combined with the DCA’s own data and public domain data, e.g. Geo-demographic or court data, to develop scorecards for predicting propensity to pay or settle; or propensity to pay following litigation etc. These scorecards are then deployed in an organisation’s operational processes to determine key segments for targeted campaigns and optimal use of resources.

TracingManaged through the collection system with leading exponents of DCA tracing combining internal expertise with automated treatments that call out to trace data sources (usually 1 or multiple credit bureaux) to establish linked address matches for the customer.

Skilled collectors – dedicated to converting contact to paymentTypically strong negotiation skills coupled with listening, empathy and closing techniques ensure that the strategies and treatments are ultimately successfully translated into cash collection. Whether it is payment in full or an uplift of an existing plan, when the right account is presented to such individuals and through effective case management the right party is in dialogue, they are well versed in ensuring the customer is fully aware of their position, aware of the consequences of not taking action and clear in the steps or actions they must now take to avoid those consequences.

Self Serve Where appropriate this is offered to allow an element of anonymity for those customers that will avoid contact and a discussion of their personal circumstances. It is a fine balance to ensure these are only presented where relevant and the strategic decisioning and scorecards deployed will usually ensure this sub-population is clearly defined. An experienced debtor will not utilise such facilities and this has to be remembered when setting strategy.

As can be seen above, with all of these components in place DCA’s are in a strong position to maximise recoveries

and can consistently, appropriately and with pin point accuracy maximise the net present value on every account and more significantly, for every customer they manage.

For many organisations, replicating this capability is expensive and often requires over engineering where the volumes are small. Whilst it is important to continually challenge the DCA performance with a ‘hold back sample’, when taking into account the true cost of providing the infrastructure to deliver a similar capability, it is generally recognised that the service of DCA’s, when well managed, adds significant value.

Getting the most out of your DCA relationshipBest practice measure for successRather than a simple view of performance based upon a recovery rate as a percentage of total inventory, best practice suggests that performance, and hence success, is more accurately reflected in the liquidation rate measured against vintage of accounts together with peer group comparisons to this vintage liquidation curve.

Review and rewardMuch like people, DCA’s thrive when they understand how they are evaluated; how to influence those factors that contribute to success, and the recognition and reward available for top tier performance. With a fair reward mechanism in place, (typically commission oriented although this has become more sophisticated in some markets), the relationship should be win-win.

Clearly defined processes to increase the success of an outsourced arrangement

l Put in place a validation process for prospective outsourcing partners which is consistently applied

l Correctly defined measures of success which are included in contractual agreements.

l The ability to re-visit the performance metrics or the benchmarks on an annual basis

l Continuous tracking of vintage based performance both in absolute and across peer groups

l Clear definition of expected levels of compliance to all relevant legislation and financier standards

l Take a commercial approach to operational and reputational risk – The more aggressive the collections process aimed at creating cash flow, the greater the costs.

l Leading practice sees the use of analytics and optimisation specifically being applied when allocating debt. In this instance the debt issuer uses sophisticated modeling techniques to align the account and/or customer characteristics with the DCA which has the highest propensity to collect that specific debt. Since contracts are often in place to determine minimum debt thresholds these optimisation models work within those constraints to ensure the best mix of accounts are allocated to each DCA in turn, in line with contractual commitments, in order to maximise net returns. These techniques are proven to deliver 8-15% uplifts in overall net returns. Since every DCA receives more of the debts and customers it is best suited to collect they also benefit.

It is common for more than one DCA to be deployed on a portfolio and this method is used to create competition between the DCA’s. Competing DCA’s are commonly provided with league tables that show how well they are performing against their peers. Periodically the worst performer may be dropped or a new provider introduced. These DCA league tables are typically used to dictate future volumes of debt with the best performers receiving more.

Often these league tables extend beyond pure performance and include a balanced scorecard of measures such as number of queries generated and worked by the debt issuer, average settlement % per batch, number of complaints, audit performance, compliance with contractual conditions, innovation, etc. The balanced scorecard should ultimately allow the debt issuer sufficient insight to determine which DCA generates the best level of cash, for the lowest cost and maintenance in the manner and with the professionalism expected.


Outsourcing

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Don’t lose sight of the whole pictureHaving defined the measures of success of the outsourcer’s performance, there are several other factors that credit provider needs to be aware of when selecting a DCA:

l Transparency – the DCA’s ability to meet contractual, financial and legal compliance requirements (and agreeing to an audit process as required);

l Service Model – ensure that the credit provider’s clients are being treated fairly and ethically in order to limit brand reputation risk and maintain a customer-centric commitment

l Support for performance management – maximise revenue opportunities for collection of write-offs through successful performance management of the vendor.

Whether or not a credit provider is willing (or able) to commit to an embedded agency manager, there are several techniques which can be used by onsite managers to ensure that the focus is on their accounts, and maintain an ongoing quality review and performance management process. The tools are fairly common in today’s environment:

l remote monitoring and quality reviews of customer contacts (i.e. digital logging)

l monthly publishing of competitive liquidation results to a competitive agency process with market share incentives

l weekly updates of month-to-date competitive results to each vendor to promote competition

l periodic “special” promotions/contests tied to performance where below target MTD, and;

l monthly performance “kickers” for exceeding monthly liquidation targets at certain pre-determined levels.

The key is to maintain constant visibility and a competitive atmosphereDCA’s are becoming increasingly sophisticated in how they work and the leading organisations will generate revenues from debts regardless of how hard they have been worked by the originator, provided the incentive is appropriate. The relationship is symbiotic and where true partnerships are in place and best practice deployed then results are advantageous to all involved. It is an element of collections and recoveries we see working effectively for some considerable time. n

www.experian.com.au


Legal Recoveries

l Exception to requirement to have ACN on receipts – Section 154 and Section 155

through the regulations provide that a company does not have to set out the expression “Australian Company Number” followed by its ACN on certain cash register receipts and certain travel documentation.

Section 601DE imposes the same requirement on a registered Australian body or registered foreign company which must set out the company name, Australian Registered Body Number (ARBN), and its place of origin on all public documents and negotiable instruments which are signed, issued or published.

Now that all seems fairly straight forward and we probably were all aware to some extent that that was the law.

What is a negotiable instrument? The Act defines “negotiable instrument” to mean in relation to a body corporate:a. A bill of exchange, promissory

note, cheque of other negotiable instrument; or

b. An endorsement on, or order in, a bill of exchange, promissory note, cheque or other negotiable instrument; or

c. A letter of credit of or purporting to be issued or signed by or on behalf of, the body.A body corporate includes a body

corporate that is being wound up or has been dissolved.

What is a public document?What I found particularly interesting was the definition of a public document.

Section 88A of the Act defines a public document as follow:. “(1) Subject to this section, public

document, in relation to a body, means: (a) an instrument of, or purporting

to be signed, issued or published by or on behalf of, the body that:

(i) when signed, issued or published, is intended to be lodged or is required by or under this Act or the ASIC Act to be lodged; or (ii) is signed, issued or published under or for the purposes of this Act, the ASIC Act or any other Australian law; or (b) an instrument of, or purporting

to be signed or issued by or on behalf of, the body that is signed or issued in the course of, or for the purposes of, a particular transaction or dealing; or

(c) without limiting paragraph (a) or (b), a business letter, statement of account, invoice, receipt, order for goods, order for services or official notice of, or purporting to be signed or issued by or on behalf of, the body.

Labels and packaging are expressly excluded from the definition of “Public Document” by s88A(2).”

ASIC Interpretation:The Australian Securities & Investments Commission (ASIC) has deemed the issue significant enough to issue a regulatory guide on the use of ACN, ABN and company names (the Guide). The Guide also contains a discussion of the meaning of “public document”.

ASIC’s view expressed through the Guide on particular public documents is:

l A statement of account includes any written communication issued by a company to the effect that it owes money to a person or that a person owes money to it including a net or nil balance after offsetting debts or partial payment, whether or not it includes a demand for payment of promise, but does not include a promissory note;

l An invoice is an itemised list of goods included in a shipment and their prices, whether or not it also includes additional charges;

l A receipt is a company’s written acknowledgement of payment

l An order is an offer to contract for goods or services;

On which documents must a company set its ACN?By Peter Ryan*

Peter Ryan

A company is required by section 153 of the Corporations Act 2001 (the Act) to use its ACN on certain documents.

We examine this section in more detail to understand what it means.

l s153(1) of the Act requires that a company must set out its name on all public documents and negotiable instruments.

l S153(2) stipulates that if the company’s ACN is not used in its name then the company must also set out with its name or with one of the references to its name, either:a. The expression “Australian

Company Number” followed by the company’s ACN; or

b. If the last nine digits of the Company’s ABN are the same, and in the same order as the last nine digits of its ACN, the words “Australian Business Number” followed by the company’s ABN.

If the company’s name appears on two or more pages of the document or instrument, this must be done first to those pages.

l s153(3) provides that an offence based on subsection 1 or 2 is an offence of strict liability under the Commonwealth Criminal Code.


Legal Recoveries

l Official notices include – – Instruments signed, issued

or published under or for the purposes of any Australian Law, including:

– tax returns; – group certificates; – court documents; – memorials lodged under deeds

registration legislation; – registrable instruments affecting

Torrens title; – a supplier company’s disclosure

notices issued to the public in respect of defective goods, as required by the Trade Practices legislation.

Instruments required by a company’s constituent documents or for government purposes, whether they are issued to one or more individuals, displayed in public, published in the gazette or a newspaper or lodged with ASIC or another authority.

l Instrument means another document intended to have an effect “transaction” and “dealing” cover any act entered into to create legal

rights or obligations, even if the act is unilateral or the rights flowing from it unenforceable;

l An advertisement by itself would not usually be an order for goods or services and would only be a transactional document if it constituted an offer in terms of contract law. This applies to price lists, circulars, card vouchers, catalogues, brochures and advertising leaflets; and

l Credit card vouchers and ATM and EFTPOS slips appear to be transactional documents, but ASIC does not intend to enforce ACN requirements for card vouchers.Advertising material issued by a

body corporate will not come within the definition of public document unless it falls within one of the above categories.

Some decided cases of interest as to the use of ACN on documents include:1. National Education Advancement

Programs Pty Ltd v Ashton (1996) 14 ALC 30 decided that examination papers are not “Public Documents” which require the publication of

a Corporations ACN as they are intellectual property and therefore a different class of documents to those specified as general business documents under s88A(1);

2. In Aldridge v JHA 09 Pty Ltd [2012] QCAT 440 (10 September 2012) the senior member found that there had been a breach of Section 153 of the Act where a consultant prepared a property inspection report on a company letter head and omitted the ACN; and

3. In RMG Acquisitions no. 8 Pty Ltd v Collard [2011] FMCA 596 (5 August 2011) the Federal Magistrate found that a Bankruptcy Notice issued by the Registrar was not a document issued by the creditor, which was a company in liquidation, and was therefore not a public document and did not need to bear its ACN on the Bankruptcy Notice. n

Peter Ryan is Executive Counsel for Hemming+Hart Lawyers and is part of the HemLaw Recovery management team. www.hemlawrecovery.com.au

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Collections

So another customer hasn’t paid. You may have tried negotiating, legal action and even outsourced to a collection agency, yet you now have no choice but to write off the debt as uneconomical to pursue and add it to the rest of your bad debt ledger.

The above is a fairly common scenario in all credit teams whether your debtors are consumers or trade credit – write offs are always going to happen.

However have you ever asked yourself what else can you do with your written off debt ledger?

Debt SaleA strategy commonly employed successfully within the financial services and telecommunications industry is selling their written off debts once all avenues of recovery have been attempted. The fact a debt sale is such a regular process for some of the largest and not so large companies in Australia shows the value this strategy has on the bottom line no matter what business you’re in.

So how do you go about a debt sale? How do you know how much you can sell your debts for? Which debts can be sold and which have no value?

Firstly, debts with a director or personal guarantee are going to be of more value and potentially easier to sell then debts only secured by the business. You may have tried everything in your power to recover these funds however debt buyers will still see value in working with debts ongoing that have personal guarantees. The factors then to be considered are:1. Age of debt, 2. Average balance, 3. Last payment date, 4. Days since write off;

…..and the list goes on.

Once you have all the data elements required you could then contact the debt buyers and tender out for the best price. Keep in mind, as it is a bad debt ledger you really need to manage your expectations early when it comes to price. Although a lot of factors impact price, looking at single digit cents to the dollar is a more realistic region to be considering for a typical bad debt inventory sale. If you start thinking 10’s, 20’s or even 30 cents to the dollar, then it will be difficult to feel a debt sale being anything but a disappointment.

Debt Sale BrokersA fast growing market has recently emerged in the debt sale industry and that is the use of debt sale brokers. These specialist organisations can consult with you on analysing your portfolio, providing a valuation and managing the debt sale process on your behalf.

As debt sale brokers have relationships with most, if not all the debt buyers, you can be assured the debts will only be sold to companies who are compliant and treat yours and their brand just as seriously as you do.

Depending on the contract negotiated, in most cases you only pay a percentage of the proceeds you receive after the sale, which usually means approvals for the use of brokers becomes much easier without having to find up front fees from your business.

Next time you are reviewing your bad debt ledger, see how much is sitting there literally doing nothing for you and then think how much the business can benefit by selling these bad debts. n

*Adam Dayeian is Director, Debt Sale Brokers Australia. Email: [email protected]: 0416004361

Have you tried everything with your written off debts?By Adam Dayeian*

Adam Dayeian


Credit Management

Hey Congratulations. Well done! You have finally landed that key credit role you have always wanted, that of Accounts Receivable Team Leader. Your new role involves trade credit, you have 4-6 years professional experience, and you are now keen to manage your first credit team. The first fortnight was easy. You have met key staff, got to know your immediate manager and your team of seven. You begin to learn the formal and informal reporting lines, the company products and culture; plus some of “this is how we do things around here”. Where do you go from there, to ensure that in three months’ time you have made such excellent progress that your bonus or permanent appointment is secured? This article outlines strategies to achieve that goal, and to ensure your manager and others quickly recognise your above average contribution.

Setting Key Goals: Be WiseThe core of your new role will be getting the cash in and managing risk. So your early priorities are to set realistic goals on cash collections to achieve desired DSO targets and become familiar with the risk that you are now managing. As the new person, setting goals can be fraught with difficulty, so have an early discussion with your manager and agree and document goals for what he/she considers important. Work towards meeting those expectations as obviously

his/her knowledge of the company’s needs plus experience will naturally be greater than yours. Avoid the trap of accepting or setting higher goals than can be attained. Listen carefully for implied expectations. Keep in mind that once you have become established and shown what you can achieve, then that is probably the optimum time to bring about the major changes that seemed so obvious on day one.

Priorities & Focus: People, Processes, SystemsAs Team Leader you have three major areas to manage. People, Processes and Systems. By People is meant your manager, other staff, your team and all stakeholders. By Processes is meant those daily activities around opening accounts, collection routines, invoice claims handling and reporting. By Systems is meant the computer hardware and software plus other IT tools. If the position was vacant for some time, or the credit function lost focus prior to your arrival, much of your time may be spent fire-fighting and patching processes. Your greatest leverage to getting things done initially however is from those areas directly within your control: People and Processes. Therefore you must manage change in both areas simultaneously and later review Systems. The following three sections explain why, and the broad approach you should consider taking.

Hey Congratulations – Well Done!By David Searle*

“Continuous effort – not strength or intelligence – is the key to unlocking our potential.” (Winston Churchill)

David Searle

The core of your new role will be getting the cash in and managing risk. So your early priorities are to set realistic goals on cash collections to achieve desired DSO targets ...


Credit Management

(1). PEoPlE: Building Your Team In the past you may not have had to work through people to get things done. You were probably working with colleagues. It is a major shift to manage a team to realise the goals before you, and the risk is that you take on too much yourself during your settling in phase. Surprises and opportunities will arise outside your plan of action, and time must be factored in for that.

At the earliest opportunity create a strengths and weaknesses profile for each of the team. Observe and note down what you see, hear and read. Add to that what others say and record in detail critical incidents, good and bad, so a rounded factual picture is built of each member’s capabilities. From that, you can then identify where training and extra support may be required, or opportunities exist to enhance productivity. If each person’s key tasks are then added alongside your assessments, you may find the need for cross training so that if a key player suddenly leaves your progress is not slowed.

(2). PRoCESSES: Assess and Address!The main processes within most credit teams involve opening new accounts, sales ledger maintenance, collections, claims resolution, and reporting. Observe those staff that perform key tasks quickly and efficiently. Find out why? Do some staff comment that they are lacking the tools and internal support to get things done. Assess and address. Can you see staff struggling to complete tasks in a reasonable time? Assess and address. Or is much overtime being worked to deliver mediocre results? Assess and address. Do staff from other departments constantly interrupt with invoice claims and comment about the performance of your newly inherited staff? Assess and address. You must make it clear that any staff related issues, whilst encouraged, should be brought to you directly, in

private and in confidence and assurances given that they will be addressed. How the team interacts with other departments may need to be revised to reduce regular interruptions, especially during key telephone collection periods 10-12pm and 2–4pm. New procedures may be relaxed once a backlog of work is cleared or a new procedure bedded in for example.

In this article I want to help you review just two key processes. Claims resolution and collection activities.

(a). Resolution of Claims: An Art!Effective handling of customer invoice claims is often the biggest issue faced by any credit team. The process can be fraught with difficulties, resolution stressful and at times frankly demotivating for staff. Note that I have not used the term disputes, as the term can promote a them and us and even a confrontational attitude, among all those involved. Experience has shown that with patience and skill, this is an area in which your team can shine and make a major contribution to the company’s cash flow, customer service and how the customer views your organisation. Your senior management team will also be pleased that you are managing what at times, can be “their biggest headache.”

The art of invoice claims handling is to train and equip your staff with the tools and confidence that removes the emotion and heat that often surrounds the resolution process. This is because the causes of an invoice claim can be multiple and complex, involve many people at several locations, and claimed events may have happened weeks ago and are now delaying payment of large sums. The first step in effective claims handling is to capture them uniformly, accurately and simply. Then record them in a database so that the reason, amount, customer and area responsible for resolution can be

recorded and reported on regularly, both to your manager and the heads of those departments responsible for resolving claims. This information in the hands of a finance manager can quickly help bring about the changes among other departments you need. If a claims system does not exist, an Excel spreadsheet on a shared drive, or on Google Docs could work well. Have a more comprehensive system developed if the on-going level of disputes justifies it and you haven’t minimised causes after several months.

At an early stage it can be very instructive to analyse all credit notes issued one year before your arrival. If high volumes were raised, limit your review to the top 20% of customers. Build an Excel spreadsheet showing credit note reason, value and customer. This usually provides very valuable insights to guide future claims related action on an informed basis, and solidly support your calls for changes that will rapidly improve your teams collections effectiveness and the company’s cash flow.

(b). Collections: 80% of the Issues with 20% of CustomersFor most sales ledgers the Pareto Principal applies. That is, approximately 80% of the amount of debt is with 20% in number of accounts. You need to quickly identify those accounts, and build your own profiles summarising payment and claims history, high level contacts and the experience of the team member managing it. Arrange visits where changes by the customer would bring about large cash flow improvements. Then visit other major customers to build rapport and gain an understanding of the issues they face and the market generally. There may be benefit in periodically reallocating accounts among the team and changing collection techniques. Regular team brain storming sessions should be held to establish what is working and what could be improved. Seek suggestions on what improvements staff would like to see. Some may have experience and ideas that could bring about team wide changes quicker, than if imposed or suggested by you. Share the journey. You don’t need to be the pathfinder all the time.

Effective handling of customer invoice claims is often the biggest issue faced by any credit team.


Credit Management

(3). SYSTEMS: The EssentialsIn your early unproven months, you may not be able to influence enhancements to your credit control or top end ERP systems. However, do open a notebook in Evernote and record system related shortfalls that affect the productivity of your team, cash flow and particularly customer service. Each time you have to report issues to IT, summarise in Evernote the solution delivered, the time taken to deliver it and the impact before and after the changes. Once a factual history has been built, you are in a better position to strive for bigger changes.

Today we all seem to use Outlook, Word and Excel for many credit related tasks. Some staff quickly become experts. Ensure they train other staff to get the best from these tools. Engage external trainers if needed, but first establish what everyone needs to know, be it V Look ups and advanced formulae in Excel, or macros in Outlook. Create simple training guides so that new starts can be quickly up-skilled and your initial investment is repaid many times. The same applies to your core Credit Management system. Avoid commissioning in-depth customised “How To” guides or training. 80% of your time spent using any system will usually involve just 20% of the systems features. Ensure everyone uniformly knows how to optimally use those.

Cost effective off the shelf credit management systems are rare in small to mid-sized companies. However, if you want to measure the effectiveness of collection calls, have follow-ups automated, payment promises quantified and all e-documents and communications with a customer in one place and accessible by all, then help is at hand. Yester years contact management systems have blossomed today into customer centric communications managers and CRM systems. They offer many tools out of the box that support collection activity, claims management and productivity reports that will be quickly embraced by all credit staff. You can install such a system for a relatively risk free $500 on your desktop. Then play, learn and customise as you go. Ask staff to sit alongside you and get their input as you make changes. Adoption is quicker if staff help build it! If the result clearly

meets your needs, then it’s a simple step to relocate the system on a server for all staff to use. Again keep things simple. Decide what such a system must deliver now and focus on that.

In the CRM space, find out what the rest of the world uses. There are usually very good reasons why. In software selection, keep focus on what’s essential now, to deliver the results you want now and balance that against cost. Take a close look at software solutions called ACT!, Maximiser, Legrand and Zoho. Most of these systems can be installed, customised and managed by you. Search the web for a trial version. It will be time well spent and a career skill that will travel easily with you.

PERSONAL DEVELOPMENT: Yours & the Team Until now, we have focused on team productivity and development, IT skills and process review. Not surprisingly, it is in these areas that you should constantly up-skill and expand your knowledge. A first step should be to join the Australian Institute of Credit Management and the Credit Network Forum. At least 1000 credit professionals have already joined the CNF, so it’s a rich source of up to the minute advice and guidance on most credit matters. In this wired world there is still nothing to beat personal interaction. So attend AICM meetings and constantly update your contact management system. You do have one don’t you? It may be as simple as an iPhone app or a top end system like ACT! Effective use of these tools will serve you well throughout your career and networking life. Get to know these tools inside out. How they link to iCloud, Gmail and Google apps for example. Research remote control software so you can set up access to your desktop wherever it and you may be in the world. Identify a mentor and share successes and failures with him/her and

gain new perspectives. It’s less costly than an MBA and the practical streetwise smarts you’ll learn, will be priceless.

Set up a team library of various credit related resources. Encourage staff to attend courses, conferences and trade shows. Ask them to share key learning’s with the team. Particularly relevant material should be documented and become part of team members training manuals.

Always encourage your team to be on the lookout for ideas that could be adapted for your company and enhance the contribution your team makes. Don’t just go looking at credit websites, books or professional publications. Scan much wider and reward those that become Idea Hunters. Read the strongly recommended book: The Idea Hunter (Boyton/Fisher 2011 Wiley). In today’s employment climate, ideas people go further and last longer! So will you and your Team.

CONCLUSION: Continuous Effort & Improvement Checklist!To paraphrase Churchill, unlocking your potential and that of others, requires continuous effort. It is sincerely hoped that this article has presented strategies that will support your efforts and career as a credit professional. A longer Improvement Checklist, of which this article forms part, is available. If you would like a copy or have questions, then please email the writer. n

*David W Searle MICM has held senior credit management and business consulting roles in NZ, London and Edinburgh, and is with Coates Hire Operations, Mascot, NSW. Email: [email protected]

In software selection, keep focus on what’s essential now, to deliver

the results you want now and balance that against cost.


Credit Management

Credit plays a critically important role in wealth creation and economic growth. This is a widely known and largely undisputed fact, it’s also the reason why credit is so closely scrutinised from both a regulatory perspective and by the media as they seek to inform the public about the state of our economy.

However to the detriment of credit managers, regulators and the general population, a significant part of the credit story continues to remain largely hidden. Vast amounts of attention are given to bank credit, while the state of trade credit in Australia is largely ignored. As a result, we often obtain a view that is skewed to the larger end of town as credit is much easier to access for this group of businesses.

Also, this picture ignores two critically important facts. Firstly, larger businesses don’t fund their operations solely on bank credit, instead a significant majority use a mix of bank and trade finance.

Secondly, trade credit is often the first source of finance for small businesses, and one they depend on heavily during challenging periods. As a result, trade credit data provides a unique and interesting perspective on the financial position of Australia’s small businesses, as well as providing a different view point on the state of the economy.

Global studies support this fact, with research revealing that trade credit is the largest source of short-term finance for businesses around the world. The Internal Revenue Service in the United States estimates that for every dollar in short-term finance provided by formal credit markets there is $1.94 in trade credit outstanding. Other research has simply concluded that trade credit ‘far exceeds the business lending of the entire banking system’.

These figures demonstrate the importance of trade credit to individual businesses and the economy. The sheer scale of the trade credit market is one reason why it deserves greater attention than it currently receives. It also plays a critical role in business success and is predictive of corporate health, making it an important economic indicator.

A study carried out by the Stern School of Business at New York University and the Kelley School of Business at Indiana University supports this view. The study examined all of the variables commonly available to credit managers before determining that trade payment data has the greatest ability to differentiate. The study also noted that ‘payment information generated by D&B has significant power in predicting firm failure.’

Importantly, this isn’t the only study to put forward a view that trade credit plays a vital role in the economy.

The findings of a 2012 study – Financial Frictions, Trade Credit, and the 2008-09 Global Financial Crisis – which came out of the Federal Reserve Bank in the United States, found firms with access to trade credit during the GFC experienced a smaller decline in sales than firms that had no trade credit access. The study also found that export-intensive firms resorted less to trade credit as an alternative source of finance, which contributed to their larger declines in sales. Consequently, those firms that utilised trade credit had a greater chance of survival during the GFC.

These findings become particularly relevant to the Australian economy when we consider the performance of our banking and trade credit markets.

Banking statistics show that business credit grew just 2.8 per cent during 2012. This compares to the 24 per cent growth in 2007, before the onset of the

The hidden side of creditBy Gareth Jones*

Gareth Jones


Credit Management

While the time taken to settle trade accounts has come down by five days since the height of the GFC, it still sits stubbornly at around 52 days.

GFC sent levels of credit growth steadily down during the years that followed. With credit growth levels so low in the banking sphere, trade credit would need to grow substantially to offset the difference and to support GDP growth. However this is not happening, with a similarly weak level of growth in trade credit, and poor performance from existing trade credit.

While the time taken to settle trade accounts has come down by five days since the height of the GFC, it still sits stubbornly at around 52 days. This payment behaviour is placing significant amounts of cash flow pressure on firms.

Unsurprisingly in this environment, 75 per cent of Australian business executives indicate that cash flow will be an issue for business’s operations during 2013. In addition, more than 28 per cent rate outstanding accounts receivables as their biggest barrier to growth1.

This data suggests that while the Australian economy is faring well relative to other developed economies, there are still challenges that need to be managed if we are to stem the tide of businesses that end up failing due to cash flow struggles, and if our businesses are to return to solid revenue growth.

The data on business failures shows a five per cent rise year-on-year in the December 2012 quarter. At the same time, financial data for companies generating more than $1 million in annual revenue reveals that average revenue growth more than halved across corporate Australia over the last 12

months. Company earnings rose by just 5.2 per cent in the 2011–12 financial year after relatively strong growth of 11.8 per cent in the 2010–11 financial year.

All of this data highlights the struggles that are at play as businesses seek to return to growth after the shock of the GFC. Despite other positive signs in the economy, we haven’t yet reached the tipping point that will set us on the path to substantial and sustained growth.

As noted in the most recent Statement on Monetary Policy from the Reserve Bank of Australia, GDP growth in 2013 is expected to be below trend, at around 2.5 per cent. This forecast has been pulled back since the November 2012 statement as a consequence of a weaker outlook for mining and non-mining investment.

This trend towards lower levels of investment is evident in D&B’s latest Business Expectations Survey. The actual index for December 2012 was negative for the second consecutive quarter, with 21 per cent of firms reducing

investment. Looking ahead, the picture is also downbeat. Capital investment expectations have dropped sharply for the June 2013 quarter, down 11 points to five, the lowest point since the September 2011 quarter.

Importantly, the cash flow challenges that are evident within much of the latest data would be less of a surprise if trade credit data was deeply ingrained in business risk assessment practices, included in macroeconomic models and reported to a greater extent by the media. The very absence of this data in these forums, particularly macro-economic models and media, has resulted in a lack of understanding regarding the true value of this information. n

*Gareth Jones, Chief Executive Officer, Dun & Bradstreet Australia and New Zealand.www.dnb.com.au

FOOTNOTES:1Dun & Bradstreet’s National Business Expectations Survey – Q2 2013

Sales & Marketing Debt Collection Commercial & Consumer Risk dnb.com.au

38 global headquarters193 countries223,757,469 business records171 years of insight


Credit Management

At a recent industry forum hosted by Veda, Asia-Pacific’s leading provider of consumer and commercial data intelligence and insights, industry stakeholders claimed Australian small businesses are at risk of significant financial losses due to a lack of awareness and understanding of the Personal Properties Security Register (PPSR).

Speaking recently at Veda’s PPSR 12 Months in Review, 12 Months Ahead Forum, representatives from Veda, Commonwealth Bank, ANZ Bank, Gadens Lawyers, the Australian Institute of Credit Management and Insolvency and Trustee Service Australia urged Australia’s SME sector to begin using the PPSR or run the risk of learning the hard way when suppliers get into financial difficulty.

Veda reveals SMEs are at risk of significant financial losses due to lack of awareness and understanding of the Personal Properties Security Register

Panellists: Del Cseti,( left) National Training Manager and Manager External Affairs, AICM addressing the panel comprising Anthony Walsh, Senior Associate, Gadens Lawyers, Bronwyn Yam, General Manager of Asset Finance, Business & Private Banking, Commonwealth Bank, Cindy Bushell, Program Director, ANZ Bank, Alex Beck, PPSR Product Manager, Veda and Carol Chris, General Manager of Commercial and Property Solutions, Veda.


Credit Management

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“By registering security

interests on the PPSR, small business will be at a lower risk from the bad debts of

their partners.”

Carol Chris, Veda’s General Manager of Commercial and Property Solutions revealed that just 11 per cent of Australian SME’s are using the PPSR database to search for and register security interests.

A lack of general awareness on what the PPSR is, combined with a lack of knowledge of how the system operates, were cited as the main barriers to adoption within the SME sector.

This confusion was also cited as extending into areas of the legal industry due to the complexity of the PPSR system. Other factors which are contributing to the limited use of the system include a prevalence of conflicting advice from parts of the legal sector due to a lack of detailed understanding.

Failing to register interests on the PPSR holds significant risks for SME’s but also presents a major opportunity for the legal industry to take a proactive stance in the education process according to Veda’s Carol Chris.

“By registering security interests on

the PPSR, small business will be at a lower risk from the bad debts of their partners. Registering on the PPSR also betters the position of businesses in the list of creditors in the event of insolvency or liquidation.

“Registering your interests on the PPSR should be an integral part of good practices in credit management but it is clear that this is not happening within Australia’s small business sector, and the legal industry can play a key role in encouraging adoption of the system.” said Ms Chris.

While big banks and larger businesses have adapted well, smaller businesses are not protecting their interests adequately. The panel shared insights that some SME’s continue to rely on handshakes and verbal agreements in place of formal protection measures.

By failing to register security interests on the PPSR, SME’s risk dropping down the pecking order behind banks and big business when trying to recover their debt in the event of their debtor going into liquidation.


Credit Management

While acknowledging that the PPSR system is complex, the panel advocated for the legal and financial industries to take a proactive approach to educating the SME sector and the broader market on the benefits of the PPSR.

As part of their PPSR offering, Veda develops bespoke solutions that allow businesses to quickly and easily search and upload entries to the PPSR, saving them both time and money by removing the need for businesses to manage this process in-house.

About the Personal Property Securities Register (PPSR)The PPSR is a national commercial law on secured finance involving personal property, bringing together 26 different Commonwealth, State and Territory laws and registers under

one national system, the Personal Property Securities Register (PPSR).

The PPSR is one of the biggest changes impacting the credit industry in the last two decades, bringing significant changes to existing Australian business practices, from commercial lending and trade credit, to leasing, legal and professional services.

The PPSR makes it significantly easier for businesses to protect their interests in the event of their business partners and suppliers going into liquidation.

About Veda’s PPSR 12 Months in Review, 12 Months Ahead ForumThe cross-industry event examined insights into how the PPSR has fared in the first 12 months of operation.

l Keynote speaker: – Gavin McCosker, COO, Insolvency and

Trustee Services Australia l Panellists:

– Anthony Walsh, Senior Associate, Gadens Lawyers – Cindy Bushell, Program Director, ANZ Bank – Del Cseti, National Training Manager and Manager

External Affairs, AICM – Bronwyn Yam, General Manager of Asset Finance,

Business & Private Banking, Commonwealth Bank – Alex Beck, PPSR Product Manager, Veda n

www.veda.com.au

... the panel advocated for the legal and financial industries to take a proactive approach to educating the SME sector...

Keynote speaker, Gavin McCosker delivers his presentation.

Become the National Credit Team of the Year

The Credit Team of the Year Award is going national! Enter your team by 31 July 2013 for your chance to be awarded for credit excellence.

Nominees for national winner receive:

• Two registrations each at the 2013 AICM National Conference in Adelaide

• Accommodation for two representatives at the 2013 AICM National Conference at the Adelaide Hilton

• Travel for two representatives to the 2013 AICM National Conference in Adelaide

• Introduction on stage at the 2013 AICM National Conference for announcement of National Credit Team of the Year winner

National winner receives:

• $2,000 professional development services with AICM• Recognition as national winner in AICM magazine, AICM, Veda

and Credit Network websites• 2013 National Credit Team winner’s trophy

There will be four finalists, two of which will be selected as nominees for national winner.

Applications and information is available at aicm.com.au

Proudly sponsored by Veda.


Credit Management

Credit management is an important aspect of any company’s business. Credit personnel undertake a crucial role in ensuring accounts are paid in a timely manner, by identifying debtors who pose a risk to the business and protecting their employers cash flow.

Most companies today are faced with a difficult business environment, whilst also having to cope with changing legislation and new processes such as the introduction of the Personal Property Securities Act in 2012, revisions to the Privacy Act and comprehensive reporting requirements. In many instances, the Credit Manager is left to deal with these additional requirements whilst remaining under resourced and facing increased pressure from management and sales staff to grow business.

So is your desk loaded with more tasks than 3 years ago?

Credit professionals are required to: l keep abreast with the changing

world of credit

l remain highly skilled to manage credit effectively

l minimise credit payment defaults l identify and follow “best” credit

management practices l efficiently evaluate their customers.

This includes following the credit principles in the pie chart below.

It is a challenge for credit staff and their employers to offer competitive credit terms to clients whilst having the confidence that invoices will be paid. On top of this, they need to know intimately their key accounts and have the confidence their largest client(s) will pay on time.

Providing credit is crucial to business growth and it is of upmost importance to have sound credit strategies in place to learn and stay informed about customers and their business. This includes identifying good and bad risks, and verifying the correct legal entity that is applying for a credit account, while ensuring all documentation is properly completed and executed.

To effectively manage credit, a company must have a well-written

credit policy and an established credit assessment process. They

also need to employ well trained and skilled credit staff whilst having in place a sound credit application, terms of trade and security documents. Well-drafted documents give confidence to creditors if legal action needs to be taken.

Staff not only need to have good skills and training,

but access to a range of credit information databases and reports

to effectively analyse and manage

Credit Managers – Any room left on your desk?By Trevor Goodwin*

Trevor Goodwin


Credit Management

their debtors. In managing risk, credit managers should refer to the 5 C’s of credit: Character of the customer, Capacity for them to pay, Capital injected into the business, Collateral of the business and Conditions; which have an effect on their operations.

Monitoring of customers and following up overdue accounts that are outside acceptable terms is essential in the credit process so as to determine the early detection of adverse information and enable steps to be taken to quickly mitigate the risk.

At all times, credit personnel need to maintain communication with their customers, management, sales team, credit staff and other trade suppliers, their credit information bodies and collection firm and with trade credit insurers.

To make sure you are not “hit” with a surprise loss, it is also important to conduct annual reviews of customers to check for changes in management or

ownership control, financial condition, payment pattern with other suppliers and industry trends. Following the review a decision can be made to revise the customer’s credit limit or payment terms.

If you’re a Credit Manager and are tired just reading the above, I’m not surprised!

To support their credit practices businesses are now more actively seeking the services of credit information bodies to assist them in their credit operations, beyond the usual credit reports and debt collection services. Professional credit services firms have the latest technology and efficient credit techniques across a broad range of services and work closely with their clients to provide accurate up to date information.

Credit services compliment the ‘cradle to grave’ package and specialist companies such as National Credit Insurance Brokers (NCI) provide a total credit service package including debtor

analysis with credit opinions, debtor monitoring and alerts, investigations, information reports, registering and management of PPSR, debt collection legal and recoveries, while also administering trade credit bureaus and providing technical advice to clients. Many businesses also make use of trade credit insurance to mitigate their debtor risk and safeguard against losses from insolvency occurrences.

With increasing complexities in credit and a difficult business climate, businesses can be assured they have access to the support of credit service organisations. Additional credit services can be a cost effective and efficient way to improve your company’s cash flow and overall success of your business.

Need some space on your desk? n

*Trevor Goodwin is Manager Credit Services at National Credit Insurance (Brokers) Pty Ltd. www.nci.com.au

Credit Services

Analysis

Monitoring

Reports

Debtor alerts

Informationgathering

Advice

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Credit Services, an NCI trade credit solution.

When it comes to designing trade credit solutions, NCI can point you in the right direction. NCI Credit Services can assist you with all your credit management needs and create a complete risk solutions package specific to your requirements.

Visit www.nci.com.au or call 1300 654 500 for more information.

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Credit Management

1. What prompted you to become a member of the AICM?I heard about the AICM from a work colleague a few years ago and I was instantly intrigued about the organisation. I knew that the AICM would be a great way to expand my network and learn more about the Credit Industry, so I joined and quickly became active and engaged with the networking events.

2. What prompted you to apply for the YCP Awards?I believe you have to constantly challenge yourself in life in order to continue to grow and develop. The YCPA is a great opportunity for young people in Credit to meet new people and other young professioanls in the Industry. The whole process prior to the finalist stage is an experience in itself, and I would strongly encourage other young people to participate.

– YOUNG CREDIT PROFESSIONALS AWARDS – Gaining Recognition and Advancement

in the Credit Industry

Recently I had the pleasure of interviewing one of the up and coming Young Credit Professionals, Alison Said, VIC/TAS Division’s Finalist in the National YCP Awards 2012. I’ve known Alison for some time now, and she’s always been a go getter, but I wanted to find out what prompted her to become involved with the AICM and the YCP Awards program. In examining Alison’s experience, other Young Credit Professionals can hopefully understand the benefits of being involved with the institute and how the YCP Awards program can put them on the fast track to success within the industry. (Interviewed by Donna Smith

AICM VIC/TAS Division Council) Alison Said.

3. Has being involved in the YCP Awards changed how you engage as a collection professional and if so how?The YCPA experience was one of the best professional experiences and memories I can recall! I had such a fantastic time going through the process, including the state and national selection and attending the Gold Coast National Conference. The experience assisted me in continuing to build on my network and professionally develop. I also had the chance to spend time with the other finalists in the Gold Coast, who were all great young Credit professionals and worthy contestants.

4. What’s your favourite thing about being a member?Definitely the networking! I regularly keep in touch with fellow AICM members at events and during council meetings, as well as outside of work. The Institution has so many great members, all of which are so supportive and encouraging to the younger members. I see this to be invaluable to my professional development and my YCPA journey. Being an active member of the AICM also allows me access to important news and changes in the Credit Industry. It’s a great way to stay connected and informed.


Credit Management

5. What do feel you get out of being a member?There are so many things that I find beneficial! By being a member, you are regularly updated on current events and legal issues affecting the Credit Industry and leading Industry news. The regular Networking events and XMAS party are a highlight for me. Also, the professional guidance and support I have discovered from the fellow AICM members has been fantastic! Since winning the Victoria YCP award, I have also had the opportunity to sit on the Vic AICM Council, which has been great.

6. What has been your favourite event to date?Definitely the Awards dinner at the Gold Coast 2012 National Conference. Being a YCPA finalists opened me up to so many great people and enlightened the experience for me. Although I didn’t take out the National prize, this did not take away from the memory for me. I enjoyed the event so much! I also got engaged that night, which topped off the night and added to the experience!

7. What value do you think the YCPA program offer to young credit professionals?There are so many benefits for young professionals! The networking experience; the professional development; the opportunity to sit the panel interview and presentation during the finalist selection rounds; the events and Awards Dinner (which is a big rush for all of the contestants!). The list goes on….

8. How has your involvement in the AICM changed/improved or augmented your career path?The AICM has definitely added to my professional awareness and exposure. I feel more informed about what’s going on in

the Industry and my professional network has grown. I know that if I have any pressing questions or need advice from an experienced credit professional, I feel welcome to contact one of my fellow AICM members. The YCPA experience also added to my professional confidence overall, which is extremely important when you are leading and managing a team of other Credit Professionals.

9. Is the AICM a great place to network and find mentors?The AICM is the perfect forum to build your professional network! I have met so many great people throughout my time with the AICM and I regularly keep in touch with many of them. Building on your network is especially important when you need professional advice or just need to run a question by someone who is also in the Credit Industry. I can’t stress how important a strong Network is when developing your career. I must say that the Networking opportunities have been the most valuable part of the AICM for me.

10. What do you think I should tell young credit professionals about the AICM and the YCPA program that would get them excited about becoming members and coming to events at the AICM?Do it! I enjoyed the experience of AICM and YCPA so much; I would recommend it to anyone that wants to grow their career. Don’t’ hesitate or be afraid of not winning, as the process is about the experience and not just about winning. Throughout the process, you will realise that you are already a winner for challenging yourself to give it a go. And at the end of the experience, you will realise how valuable the experience will be to your professional journey.

Nominations for the 2013 Young Credit Professional Award, sponsored by D&B, are now open. If you are under 30 years of age as at 30 June 2012 and work in any of the many roles that embrace credit such as collections, customer service, factoring and invoice discounting, credit analysis, credit control, credit scoring, leasing and equipment hire, risk and/or loans, then you have what it takes to be this years Young Credit Professional.The National Winner receives $1000 cash prize and Educational Scholarship from AICM (valued at $2,000). The Division Winner wins their airfares, accommodation and registration costs to attend the AICM National Conference to be held at the Adelaide Hilton on 23 – 25 October 2013.To register your interest and have an AICM representative contact you with further information and assistance go to www.aicm.com.au

You have what it takes to be the2013 Young Credit Professional.


Credit Management

Corporate non-payment increases compared to 2011 According to the survey, 67% of the interviewed enterprises reported overdue in 2012, a 2 % increase compared to 2011. Among those that reported overdue, 43% expressed the overdue amount was higher than last year which is quite alarming as only 29% reported the same in 2011. Comparing all countries participating in the survey, most companies in Australia reported overdue (83%) and more companies in China reported the actual overdue amount had increased (56%).

In our experience, companies with more than 2% of long overdue accounts against turnover could have liquidity problem and have high risk of non-payment to their suppliers. In India, 60% of companies with overdue have more than 2% of their receivables are overdue for 6 months or longer which is the highest among other countries.

‘The corporate payment experience in Asia Pacific region deteriorated in 2012. Not only more companies reported overdue, more companies reported the actual overdue amount had increased which is not a good signal.

The economic slowdown in global economy continued to hit the companies in Asia Pacific region in 2012 as the EU and US markets are still the largest exporting markets for Asia, particularly for China, Hong Kong, Taiwan and Singapore.

In China, SMEs also faced several shocks in 2012, notably substantial wage pressures and problems of access to finance. In Australia, the high Australian dollar made Australian goods more expensive to sell in both export and domestic markets.

Some large failures also made a wide domino effect on non-payment in Australia. In India, high inflation has forced the central bank to keep monetary policy tight and therefore Indian businesses rely heavily on supplier’s credit to finance their operations. Debt management and refinance are critical for Indian companies in tough economic conditions.

Coface also recorded a significant growth of payment incidents in these three countries in 2012.’ said Richard Burton, CEO of Coface for Asia Pacific Region.

Does more credit offered automatically increase non-payment?Companies in the region who offered credit sales to their buyers increased from 76% in 2011 to 82% in 2012. Market competition is still the main reason of offering credit sales but more and more buyers asked for credit terms because of their tight liquidity. Even the confidence level decreases, companies still offer credit terms in order to win business against competition.

Among all countries, companies in

Survey reveals corporate overdue payment in Asia Pacific region deteriorated in 2012Companies are less optimistic about recovery of global economy in 2013

A survey of corporate credit risks management in Asia Pacific region was conducted in the fourth quarter of 2012 by Coface, a leading global credit insurance group. The survey revealed that corporate payment experience in the region generally worsened. Companies in Australia, China and India suffered more non-payment. Sectors of building & construction, IT, ISP & data processing, textile, clothing & shoes and household electric & electronic appliances are at higher risk. Companies in the region are less optimistic about recovery of global economy in 2013.


Credit Management

Taiwan and Japan are most aggressive in offering credit terms. 42% of Japanese companies and 48% of Taiwanese companies offered 90 days or more as their average credit terms. 58% of Japanese companies and 48% of Taiwanese companies have more than 75% of credit sales in their annual turnover.

Even though, about 90% of companies in Japan and Taiwan were able to control their overdue debt below 2% of their turnover and kept an average overdue days below 60 days, demonstrating the best credit control in the region.

Companies in Hong Kong and Singapore are less aggressive in offering credit terms. Majority of them offered less than 30 days as their average credit terms.

However, 49% of Hong Kong companies and 53% of Singapore companies had more than 2% of their receivables overdue for 6 months or longer, which is quite high compared to the Asia Pacific average of 37%. Moreover, the number of companies reporting average overdue days of more than 60 days in these two markets is also higher than the regional average of 29%.

‘Companies in Hong Kong and Singapore are usually SMEs and are less aware of the importance of receivables protection in their financial management. Conversely, the usage rate of credit management tools by companies in Taiwan and Japan reached 80% and 100% respectively, reflecting companies in Taiwan and Japan put more investment in credit management to minimise their bad debt risk.

Even though they are aggressive in granting credit to their buyers, they are able to keep their receivables and average overdue days at a very low level.

Receivables are as important as other assets and sometimes the largest one of a company. Offering credit sales certainly is an effective way to win business. However, without proper credit control, it will create siginificant impact to the financial condition of a company. It is also encouraging to see that the usage of credit insurance increased from 18% to 24% in 2012.’ said Burton.

Risky industries: building & construction, IT & data processing, textile, clothing & shoes and household electric & electronic appliancesThe survey also reveals that the overdue situation, overdue trend, average overdue days and more than 6-month overdue ratio of companies in building & construction, IT, ISP & data processing, textile, clothing & shoes and household electric/electronic appliances industries are at higher risk comparing to other industries.

Building & construction: In China, Singapore and Hong Kong authorities have taken measures to cool down the property market in fear of formation of a speculative bubble coupled with the rise of discontent among a high and growing proportion of the population unable to finance a home.

The sector is highly sensitive to government policy and financial market. Construction related to public work and infrastructure development is less volatile in view of continuous expansionary policies and re-establishment after natural

Appendix 1: Overdue situation in Asia Pacific Region in 2012

Percentage of companies experienced overdue in 2012

Any overdue in sales during the last 12 months

2011 2012

Yes67%

Yes65%

No33%

No35%


Credit Management

disasters in many Asian countries. Oversupply in sectors of building materials (steel, coal and cement) should also be monitored.

IT, ISP & data processing: The sector is characterised of over-competition and slim margins as most of the companies in this sector are SME’s. The market is vulnerable to continuous evolution of information technology.

Textile, clothing & shoes: The sector is a traditional risky sector as demand for consumer goods is easily affected by economic downturn. The recovery of EU and US markets is critical as still a majority of companies relies on export to these markets. Competition in domestic market is also very intense in this sector.

Household electric & electronic appliances: The sector is highly export oriented in the region. Except high end products like smart-phones and tablets, medium to low end appliances are badly hit by slow demand in export market, high competition, fast changing technology trend and rising production costs.

Companies in Asia Pacific region are less optimistic about global economy69% of the respondents believe the slowdown of the economy will not end in 2013, reflecting a less optimistic view on the global recovery. Companies in Australia, China and Japan are less favourable about recovery of both global and local economy.

‘The unsolved situation of debt crisis in the Euro zone and the slow recovery of the US market made most companies doubtful about the recovery in 2013. Most of them are putting much hope on local monetary policies, improvement in access of finance, industry incentive program, local infrastructure projects and recovery of property markets.

Appendix 2: Comparison of overdue amount

We expect global growth to be stable in 2013 at 2.7%. GDP growth is going to be driven by emerging countries and Asia in particular. Some large emerging markets will benefit from lagged effects of 2012 accommodative economic policies indeed, along with robust domestic demand. On the other side, the Euro zone with -0.4% remains a drag for global growth. We still expect the US growth to reach 1.5% this year contributed by the improvement in private investment and consumption recovery.’ said Burton. n

This survey was conducted in the 4th quarter of 2012 with responses from 2,274 companies of all sizes and industries in Australia, China, Hong Kong, India, Japan, Singapore and Taiwan. This survey aimed at providing a broad understanding of the status of payment experiences, payment trends and credit risk management practices in companies in the Asia Pacific Region.

www.coface.com

Amount (dollars) of the overdue compared to last year

Amount (dollars) of the overdue compared to last year


QueenslandLynne Walton EDX (Qld) Pty Ltd

New South WalesMark Diggory Euler Hermes Aust Pty LtdHamish Osborn EDXBen Zammit Euler Hermes Aust Pty Ltd

NEW MEMBERS

The Institute welcomes the following credit professionals who were recently admitted to membership in March 2013

Barry Phillips (left) and Lindsay Chuck at the Credit Focus. Darryl Gobbett & Gail Crowder.

The second half of 2013 will continue to be busy for the S.A Division as our Divisional Council continues to work hard in programming quality workshops and functions. Members are reminded of the upcoming National Conference which will be held here in Adelaide in October and we hope to see a number of you attend. This is our opportunity to show what Adelaide has to offer and the success of the Institute in this State.

In conclusion I wish to take this opportunity to thank our past-Vice President Catherine Goedecke who has resigned from the SA Divisional Council due to work and personal commitments for her contribution on Council for many years.

– Trevor Goodwin FICM CCE, President, S.A. Division

aicma r o u n d t h e s t a t e s new members

aicma r o u n d t h e s t a t e s south australia

Victoria/TasmaniaJohn Asztalos Skip Investigations Pty LtdKatrina deKaste Patrick LogisticsCasey Gatti Lawrence Stora Enso Timber Aust Pty LtdMark Harrick Harrick Lawyers

South AustraliaJoanne Barling Toro Australia Group Sales Pty Ltd

President’s ReportI am pleased to report that 2013 has been a busy and productive time for the South Australian Division with our monthly Credit Focus Workshops, the March Credit Symposium, a National seminar on Privacy and Credit Reporting reforms and a morning networking breakfast with the Lord Mayor, Stephen Yarwood as guest speaker.

As mid-year approaches I ask our younger members to consider nominating for the Young Credit Professional Award sponsored by D&B and the opportunity to represent the S.A. Division at the National Conference in October. The winner of this year’s State YCP Award will be announced at the July Awards Dinner.

aicma r o u n d t h e s t a t e s


south australia

Credit Symposium 2013The AICM SA Division recently held a full day Credit Symposium at the Rydges South Park Adelaide which was very well attended. There was a well balanced program offering a broad range of topics such as -:

Economic Outlook 2013 presented by Darryl Gobbett Chief Economist Prescott Securities, Financial Analysis What You Need To Know presented by Trevor Goodwin , SA AICM State President & Information Manager NCI Insurance (Brokers) P/L, Staring Down The Liquidator presented by Jack Madsen Director Madsen Rowley Solicitiors, Registration & Policing of the Insolvency Profession – The New Regime presented by Hywell Thomas Australian Securities & Investment Commission Senior Accountant Institute of Practitioners, Stakeholder Team, Review & Update Your Company Credit Policy & Collecting Your Debt presented by Lynette McKell SA AICM State Councillor Banner Hardware Group Credit Manager, Maximise Returns Through Best Use of The Legal System presented by James Neate Australian Vice President AICM, SA Director AICM Partner Lynch Meyer Lawyers Insolvency & Recovery Specialists, PPSA An Insolvency Practitioners Perspective One Year on presented by Robert Naudi Director Macks Advisory Registered Liquidator & Receiver.

The seminar was well received by those in attendance who enjoyed an opportunity to gain an insight into expectations of the economy in 2013 & beyond together with valuable information regarding current laws & regulations which govern the credit industry.Gail Crowder, Lyn McKell & Lisa Anderson.

Kerry Hammill & Adelaide Lord Mayor, Stephem Yarwood.

State President Trevor Goodwin & Kathryn Jarrett CCE at Breakfast with the Lord Mayor.

13 June 2013

Credit Focus:A Credit Hypothetical – What Would You Do?

11 July 2013

Credit Focus: Empowering the Credit Professional – Presentation Skills to Create a More Confident You.

8 August 2013

Credit Focus:Effective Collections – Maintaining a Good Relationship and When to go Legal

12 September 2013

Credit Focus:The Privacy Act Revised and Updated

10 October 2013

Credit Focus:Understanding Bankruptcy & Alternatives – Par X arrangements Explained.

23-25 October 2013

National Conference

14 November 2013

Credit Focus:Credit Vs Sales Part ii – Mock Presentation with Positive and Negative Outcomes

10 December 2013

Council & Councillors’ Dinner

Events Calendar



south australia

Of particular interest were the Economic Outlook & the presentation which included the PPSR one year on as there are still a lot of questions yet to be answered.

The feedback from the attendee’s was very positive, many questions were asked during each presentation & all of our speakers provided a comprehensive set of notes which has since been emailed to attendees.

Many of the participants remained after the seminar to personally speak with the presenters and enjoy some networking opportunities.

We would like to thank all our Guest Speakers for their time & the excellent presentations they provided on the day & we would also like to offer a special thank you to Gail Crowder SA AICM Vice President & Business Development Manager NCML who kindly agreed to serve as Master Of Ceremonies.

Membership MilestonesThis quarter we celebrate the following membership milestones;40 years – Leslie Thompson MICM, joined in March 197330 years – Christopher Renwood LICM, joined in April 198325 years – Maris Rudaks MICM, joined in March 1988

Congratulations to each of you.

Adelaide Lord Mayor, Stephen Yarwood & Sean Blair of Randstad.

The Australian Institute of Credit Management South Australia welcomes

the following organisations as our sponsors for 2013

The Australian Institute of Credit Management and our Sponsors benefit from a cooperative and supportive relationship that provides high profile branding opportunities to sponsoring organisations and gives the credit industry greater recognition and the opportunity to work together to promote best practice in the credit industry and in so doing provide professional development opportunities for credit

practitioners in Australia.

Robert Naudi, Director Macks Advisory Registered Liquidator & Receiver.

Credit Symposium 2013.

Credit Symposium 2013.



Presenters at the April Credit Network Night from left: John Sneddon – Shand Taylor Lawyers, Erica Barron – Qld Councillor and Tarnya Lowe – Ranstad Recruitment.

queensland

Paul Rojas (Right) and Michael Stretton of Rostron Carlyle, presenters for the CNN.

Delegates at the April Credit Network Night.Membership Chair Erica Barron (R) presenting Tarnya Lowe (L) with her membership certificate.

From the PresidentQueensland Council’s offerings for the year have commenced with the March Credit Network Night with Rostron Carlyle’s Paul Rojas review of the “Do’s and Dont’s of Credit Recovery”. Paul’s presentation examined practices relating to contracting with the correct entity, terms and conditions, credit recovery risks arising from the Personal Property Securities Act 2009 and service of documents.

Last year, we introduced the well received format of 2 speakers presenting on a theme, this gives the opportunity for attendees to experience different views in short sharp succession. April saw a focus on personal development with a topic “Professionalism in Credit” presented by Tarnya Lowe of Randstad Specialist Recruitment. Tarnya covered practical advice to assist those in the credit industry maintain a professional image. John Sneddon of Shand Taylor Lawyers outlined some of the considerations in “Managing Employee Performance”. Sessions such as these are designed to give useful, practical information that can be used in your day-to-day professional life.

Coming up in May we have a prestigious panel consisting of Karl Hill of Results Legal; Nick Combis of Vincents and Peter Mills of M+K Lawyers who will discuss Insolvency Case scenarios including recent PPSA decisions. Also on 18 – 19 July we have the encore National Privacy seminars in Brisbane, in case you missed this first time round and separately our half day seminar which is a practical guide to surviving Compliance in a credit environment.

At our last CNN the 2012 Queensland YCP recipient Hamish McIntosh gave a brief outline of the benefits of participating in the YCP process. The Queensland Young Credit Professional 2013 presentation dinner will be held on July 24th, I urge to reserve that date in your diary.

I would also like to welcome Peter Ryan of Hemming Hart Lawyers and Tarnya Lowe of Randstad Specialist Recruitment onto council.

I believe we have an exciting year ahead and a diverse range of presentations that can assist keep you informed and across the issues at hand.

– Brian Kay FICM CCE, QLD President



Nick Combis of Vincents Chartered Accountants presenting at the Qld Feburary Breakfast.

queensland

Delegates at the April Credit Network Night.

Sponsors Tarnya Lowe of Randstad and Paul Rojas of Rostron Carlyle.

The Australian Institute of Credit Management Queensland welcomes the following organisations as our sponsors

for 2013



Wednesday 12 June 2013

Credit Network NightSubject – Privacy Implication Update

Speakers – Credit Reporting Agency

& Credit Manager

VENUE – TATTERSALLS CLUB, QUEEN STREET

Thursday 18 July – Friday 19 July 2013

Privacy Law ReformsSpeaker – Del Cseti, AICM National Training Manager

VENUE – SOfITEL HOTEL

Membership MilestonesThis quarter we celebrate the following membership milestones;40 years – Robert Burns LICM, joined in March 197340 years – Phillip Osborne MICM, joined in February 197335 years – Marion Hintz LICM joined in February 197820 years – Darryl Kassulke MICM joined in April 1993


Events Calendar



We asked Harry Carroll, a member for 25 years for a few words on his time since joining the AICM;

Harry Carroll MICMAICM member for 25 yearsI first joined the AICM when I was employed as a Credit Manager with General Credits Ltd (which became AGC Finance). At that time I was heavily involved in Hire Purchase agreements and debt recovery on those agreements. I had to regularly attend court on behalf of the organisation to undertake debtor examinations. I hate to admit it but this was before the joy of computers and everything was done on ledger cards and follow up letters were typed – yes typed on a typewriter. The poor typist if they made one mistake they had to re-type the entire letter. Thanks goodness for “Word”

After a few years of “full on” debt recovery I found myself interested in pure accounting and decided to become a qualified accountant. After completing my degree I started working with the Port of Newcastle as

new south wales

Annual Half-Day Symposium 19 February 2013, Grace hotel

Geoffrey McDonald, Barrister and expert on all matters credit and law related presented a jam-packed program covering updates and reviews of legislation changes and recent case law that affect credit managers day-to-day roles. Over 50 people attended and all left either feeling comforted that they have everything under control and taking away a few key points to implement back at the office or panicked that they need to update documents or procedures due to changes they didn’t think applied to them.

– Nick Pilavidis MICM CCE.

Youth Network NightOver 50 delegates attended the AICM’s Youth Network Trivia Night at the Madison Hotel on 23rd April 2013. It was a great event and a fun-filled evening, with combined tables providing an excellent networking opportunity with other members of the Credit community. The trivia was very entertaining and there were a number of games during the night including the “Plastic Cup Challenge” which proved to be difficult especially without using water or other means!!

It was excellent having NSW Young Credit Professional of the Year, Baz Sleiman as the MC for the night and present to promote this year’s award. Well done to the combined Dun and Bradstreet, Channel 10 and Randstad table who won the trivia – albeit by the slightest of margins! Thank you to everyone responsible for putting the event together including, Treacy Sheehan, Gregg Oddlum and the rest of the council. The food was great. Laughs were a plenty and we look forward to attending the next AICM event!

Luke Hebbe, Randstad

Membership MilestonesThis quarter we celebrate the following membership milestones;40 years – Reginald Wilkinson MICM, joined in May 197335 years – Kenneth Sheppard LICM, joined in April 197825 years – Harry Carroll MICM, joined in May 198825 years – Paul Kane MICM, joined in May 198820 years –Judith Karaolis MICM, joined in April 1993


Over 50 delegates registered for Legal Update Symposium.

Youth Network Night – Winning Team.Over 50 delegates in attendance at the YNN.



new south wales

a Finance Officer responsible for budgets and, yes, credit management, collection of charges on ships using the Port of Newcastle and having to deal with many international companies. I progressed through the Port of Newcastle to become the Head of the Finance section and was heavily involved in taking the Port through corporatisation to a State Owned Corporation. Yes technology had progressed by this time and 5¼ inch floppy disks had been replaced by 2½ disks. In the early stages of working at the Port I was involved in two major external focus groups to provide feedback on whether the “mouse” would be a market success and also whether the use of windows on the monitor would work. The group said the mouse would not take off – going from the keyboard to a mouse would be a problem. How wrong can a focus group be?

As my career progressed I found myself becoming more involved in the accounting side rather than the credit management side, but each position I have held has had a strong responsibility for credit management and it is a profession I have always found interesting and enjoyable.

I moved to Canberra to take up a role with Airservices Australia a Government Business Enterprise responsible for Air Traffic control in Australia. This was as Manager of the Business Services Centre, which had a wide variety of responsibilities in finance and again a very strong domestic and international credit management function in collection aviation charges on aircraft using Australian airports and airspace. By then ICT had moved on significantly and credit managment was well and truly into the electronic age of recovery.

Following Airservices I went down the sporting and not-for-profit route by joining Swimming Australia as Corporate Services Manager. Unfortunately I never had the opportunity to attend an Olympic games but did attend several World Swimming Championships and had the joy

Delegates at the annual NSW Symposium.

Geoffrey McDonald, Barrister and expert on all matters credit and law related presented at the Symposium.

21 May 2013

Tax Office Policy and Director Penalty NoticesSpeaker: TBA

VENUE: GRACE HOTEL, SYDNEY

6 June 2013

CCE WorkshopVENUE: TBA

18 June 2013

How to manage relationships with Sales (Public Speaking)

Speaker: Bernadette Eichner, Director HRM Resolutions

VENUE: HOLIDAY INN, PARRAMATTA

16 July 2013

Young Credit Professional of the Year & Awards DinnerVENUE: SYDNEY CITY – TBA

25 July 2013

Personal Property Securities (PPS) RegisterHALf DAY SEMINAR (IAM – 12.30PM)

20 August 2013

PPSA – No more transitional protectionSpeaker: Daniel Turk, TurksLegal


17 September 2013

Signs of Insolvency VENUE: GRACE HOTEL, SYDNEY

10 October 2013

Youth Network NightVENUE: WATCH THIS SPACE – A SECRET LOCATION.

23 – 25 October 2013

AICM 2013 National ConferenceVENUE: HILTON HOTEL, ADELAIDE

19 November 2013

2013 Credit Symposium Part 2 Featuring Collections Master Class


19 November 2013

End of Year Awards Dinner featuringAward presentations and recognitions


Events Calendar



new south wales

Delegates at the annual NSW Symposium.Delegates at the annual NSW Symposium.

The Australian Institute of Credit Management New South Wales

welcomes the following organisations as our sponsors for 2013



In 1990 I decided to move to Bonny Hills on the North Mid Coast of NSW, just 20 kilometres south of Port Macquarie. In 1994 I purchased Kempsey Credit Bureau Service from Ron Gibbons (ex Aztec Transport in Parramatta) changed the name to Statewide (NSW) Credit Management and Bureau Services and chaired meetings in Coffs Harbour, Kempsey, Port Macquarie, Taree, Tamworth, Singleton and Dubbo, offering members a debt recovery service and credit management advice.

In 2005/06 I was advised I needed a triple heart bypass so I decided not to travel those long distances on the road to the Credit Bureaux and closed the Credit Bureaux down and concentrated on debt recovery.

What am I doing know? Still working 5 days a week, still operating a commission free debt recovery service and still being told I should retire.

The information contained in the AICM magazine has been an integral facet in the longevity of my business career and I thank you.

New Sponsor in NSWThe NSW Division welcomes Experian as a sponsor in 2013.

of meeting some fine athletes such as Ian Thorpe, Grant Hackett, Michael Phelps, Giaan Rooney and many wonderful and talented overseas athletes. I now work at Australian Library and Information Association in Canberra, which is the professional association for librarians and libraries within Australia, as Director Corporate Services, responsible for all Corporate services, including credit management, accounting, ICT and I am also the Company Secretary. A much slower pace than the sports industry.

Over my 25 years of membership of the AICM I have seen many changes, have met many great people in the credit profession and developed wonderful friendships through the Institute and the National Conference. When I joined the AICM it was very much a “boys club”, the annual conferences involving more socialising than professional development. The progression to the very professional body it is today with a diverse range of membership is very pleasing. The professionalism and quality of the Conferences is “first rate” and I would encourage members to attend these conferences, not only for the networking opportunities, but most importantly, for the quality of education provided and the ability for ongoing professional development. The Board and Executive of the Institute should be congratulated on moving the AICM forward into being a very professional body.

Whist over the last 15 years I have been more involved in the accounting side of my career, I have continued to have a strong responsibility and involvement in credit management and have always, and will continue to, value my membership of the AICM and what it can and has done for me as a member.

We asked Reg Wilkinson, a member for 40 years for a few words on his time since joining the AICM;

Reg Wilkinson MICMAICM Member For 40 YearsThank you for the opportunity to contribute to your magazine – a magazine that I hold as one of the most professional being produced.

In 1968 I was appointed Credit Manager of one of the largest Steel Stockholding Company’s in The Midlands in the UK with sales of up to 20 million pounds a month, I returned to Australia in 1970 and commenced employment as a Credit Officer and later Assistant Credit Manager and Credit Manager with Pioneer Concrete NSW, between 1972 and 1974. I attended the necessary classes and passed exams, which enabled me to become a Member of the Australian Institute of Credit Management and also the Australian Institute of Mercantile Agents. I attended the Institute of Credit Management meetings in Parramatta.

In 1977 I was asked by several Credit Managers to commence a Mercantile Agency, which I did and it was called Atlantic Mercantile Agency, based in Bankstown. In 1983 I had a heart attack, which set me back, and deciding I did not need the stress of being a business owner I sold the business to Gary Burrows (ex Sterland Bros in Gosford) and I stayed on as an employee. Our clients included many of the major building suppliers in Sydney.



western australia/nt

From the PresidentAs you are reading this article it will become obvious where my theme is heading….in fact not just heading but spiralling and in some cases uncontrollably towards…Yes , that’s right… the end of the financial year. The 30th of June. One of the most important dates on our calendars and one that receives extra special attention from the top to the bottom and across almost all organisations. This time 12 months ago I wrote about the role we all play in working up to and past this magical date. I also wrote about how it affects each and everyone of us in one way or another and do we dread this time of year or welcome it. Only you can answer that question!

My focus this year is on the role played by ‘leaders’ in our organisations through this time of year and yes, like it or not, you are a leader in your own right.

But, I would like to take this a step further and talk about you as a “Conscious Leader”. I have gathered a lot of material about this subject over the years and its time to share it with you. Here are some ‘thoughts’.

Firstly, Conscious Leadership is far more than a happy coincidence of talent, opportunity and hard work. Conscious Leadership is at the core of how we live and work and it constantly inspires us to a sense of renewal.

Conscious Leadership is in action where we see: l Authenticity: Authentic leaders support “the good of all’ over ego and

personal gratification; l Fearlessness: Fearless leaders create a vision that sees beyond personal

beliefs, opinions, judgements and values; l Listening: These leaders are naturally curious and listen deeply to

people, regardless of differences; l Grace: These leaders experience grace under pressure. They are

resilient in defeat and bounce back quickly; l Loyalty: Inspired leaders personify loyalty. Trust in their integrity is

never doubted; l Thoughtfulness: Thoughtful leaders are deeply aware of THOUGHT

itself. They know that it is the unseen, misunderstood and mismanaged resource within organisations;

l Connection: Connected leaders are fully engaged. They live life moment to moment without the limitations and impossibilities of the past.

Councilor David Stinton thanking Raffaele Di Renzo.

Natalie Walker, Blitz Credit Management.

Alan Langford, Chief Economist, BankWest.

Every time I re-visit this material I feel in some way better than I was feeling before. I hope it works the same for you. You see, as I stated earlier, you are all leaders in you own right. If you possess all or any of the above attributes then you already know what to do to help your organisation finish this financial year in the best shape it has ever been in…

I cannot finish without making reference to our young, up and coming leaders. The Young Credit Professional Awards sponsored by D&B are approaching fast. Please register your interest and get on board. You will be pleasantly surprised.

– Colin Phillis MICM, WA President



14 June 2013

Breakfast: White Collar Crime – Police to present7.30 am – 9.00 am

MATILDA BAY REST

17 July 2013

Annual Awards DinnerIncorporating the YCPA

6.00 PM – 11.00 PM

15 August 2013

Training: Credit Life Cycle8.30 am – 12.30 pm

36 BRISBANE STREET, PERTH

10 September 2013

Training: Telephone Techniques8.30 am – 12.30 pm

36 BRISBANE STREET, PERTH

13 September 2013

Breakfast: Building an effective credit management team7.30 am – 9.00 am

MATILDA BAY REST

16 October 2013

Training: Mock meeting of creditors4.30 PM – 7.30 PM

15 November 2013

Breakfast: How to work better with the Bailiff 7.30 am – 9.00 am

MATILDA BAY REST

04 December 2013

XMAS Sundowner – The final countdown 5.30 PM – 7.30 PM

Events Calendarwestern australia/nt

about Europe and the failing economies. If the US economy improves in 2013, will it unleash resurgence in inflation that spooks a global bond market that is an important source of capital for Australian companies?

As the RBA removes emergency monetary stimulus, will it manage to strike the right balance between preventing established house prices from rising too quickly without choking the emerging recovery in residential dwelling construction so badly needed to prevent an excess demand for dwellings relative to supply from fuelling an even bigger price bubble. The subject and questions were dealt with very effectively by our quest speaker Mr Alan Langford – Chief Economist for Bankwest.

Credit Law – April 2013When to Issue a Statutory Demand and Some of the Pitfalls!! and How to Prepare for a Pre-Trial Conference in the Magistrates Court.

Richard Graham Speaker VOGT Graham Lawyers.

Councilor Jason Louis (R) thanking Richard Graham (L).

AICM WA Seminars “Satisfying a growing Demand”The Western Australian division seminars are alive and healthy with attendances on the up. The WA Councillors have been working behind the curtain with good organisation, promotion and excellent speakers for the following subjects so far this year:

Economic and Financial Market Update and Outlook – February 2013What is the risk of another double-dip global recession in 2013 and if it does happen, will it either trigger or be the cause for another credit crunch. Will China get caught up the next time? And even if the major advanced economies improve further, can China sustain its momentum in the face of Beijing’s attempts to rein-in speculative bubbles and what



western australia/nt

Effectively managing regulatory risk requires a complete understanding of both changes to existing legislation and the introduction of new legislation. The impact of non-compliance can result in significant losses in time, legal costs and reputation.

Regulations are mandatory requirements that can apply to individuals, businesses, state or local governments and non-profit institutions.

‘Credit activity ‘ is defined in the National Consumer Credit Protection Act and includes activity relating to credit contracts, consumer leases, related mortgages and guarantees and credit services.

Our speaker Raffaele De Renzo of Nova Legal – Corporate Lawyers spoke on the Stat Demands in an informative way and speaker Richard Graham of VOGT Graham Lawyers gave the audience the inside running on how to deal with the pre-trial conference system.

Telephone Collection Techniques Seminar – March 2013:This course was a very popular interactive half-day workshop that provided participants with practical and effective techniques for improving their communication skills with a focus on the recovery of overdue accounts. The participants were shown how to increase their levels of confidence in dealing with difficult internal and external customers.

l Workshop Objectives achieved on the day were: l Understanding the psychology in debt collection l Providing new strategies for collecting the “hard” accounts l Taught how to deal with common excuses for non-payment of

accounts l Time management skills l How to handle the aggressive debtor l Provided practical telephone collection techniques

Presenter was Mike Murphy MICM CCE Credit Manager BGC

We thank the Participants, Quest Speakers and Councillors in making the WA seminars so far this year a success story.

– Warren Myers MICM, Media and Publications

Young Credit Professional WA 2013Once again the YCP sponsored by D&B is approaching and the preparations are in progress.The Western Australian’s are looking forward to their WA State Awards and choosing a winner to once again challenge for the prize of being Australian Young Credit Professional of the Year.

Members at the Credit Law Breakfast.Members networking at the Credit Law Breakfast.

Membership MilestonesThis quarter we celebrate the following membership milestones;20 years – James Lewin MICM, joined in May 1993

The Australian Institute of Credit Management Western Australia/NT

welcomes the following organisations as our sponsors for 2013





victoria/tasmania

Networking Night - 13 February 2013Frank Gambera of McMahon Fearnley Lawyers delivered a lively presentation on the phenomena of the phoenix company and phoenix company activities at the Parkview Hotel in St Kilda Road. Frank discussed examples of phoenix company activities and director duties in this context. He also touched upon the recent legislative changes concerning Director Penalty Notices and personal liability of directors. Frank also covered the implications these changes have for credit managers.

Networking Night March 2013Our March Networking Evening was a real treat for members who attended. Suzanne Hughes, Divisional Credit Manager Visy, delivered a brief presentation on the benefits to becoming a Certified Credit Executive. Suzanne explained how the CCE designation is prestigious, and allows candidates to further their careers, by earning a certification recognised by a national association. The CCE program acknowledges credit professionals for their years of experience and work within the financial industry.

Sacha Close from Veda, presented valuable information on Risk based Collections vs Value Based Collections. Sacha discussed prioritising collections activities based on the risks associated with your debtors rather than just the dollar value of an account and how it can help you reduce your organisation’s bad debt. Sacha demonstrated Veda’s new Debtor IQ service and how it can help credit managers identify the right debt to chase by comparing the payment behaviour of your customers with how they are paying other suppliers, and how others in your industry are faring, against Veda’s debtor score to provide a complete picture of your debt exposure.

VIC/TAS Division Golf Day 5 April 2013The VIC/TAS Annual Gold Day is becoming one of the “must do” events of the calendar, the whole event selling out in record time. The weather was perfect for the Best Ball Ambrose Competition that kicked off 11:00am

at Southern Golf Club in Keyborough with practice at the driving range, followed by a light lunch, a shot gun start at 12:30, finishing with a dinner and presentation. We’d like to extend another huge thank you to all of our Event Sponsors, too many to name, but their support for the event was overwhelming. There were prizes galore, more than 20 in total, with Rhys Buzza, Michael Sailland, Kerry Murphy and Eoin Morgan taking out the major prize for the day winning with a score of 6 under the card for the day. Thank you to Southern Golf Club for providing such a lovely course for play, and to the committee members who organise the event, and with whose hard work culminates in such a successful day. If you missed out this year get in early for next year because it’s certain to be a sellout event again next year.

Golfers enjoying themselves at the Vic/Tas golf day.



Members at February 2013 networking night.

…..So close and yet so far. Amir Lingam missed the $10,000 hole in one prize by 40 cms.



victoria/tasmania

Ashley James, Donna Shearsby, Barry Gallacher and Jeff Hurst (AICM Director) – the Scalzo Team – Ride to Conquer Cancer, a 2-day, 200km cycling event.

The Australian Institute of Credit Management Victoria/Tasmania welcomes

the following organisations as our sponsors for 2013



June 2013

Ten Pin Bowling (Social Mixer – Mixed Teams) 20 June 2013

Privacy Changes “The Year in Review”A great deal has changed with relation to Privacy Laws in the last 12 months, we take a look back over those changes and how they impact us as Credit Managers (New Afternoon Session)

10 July 2013

YCPA Dinner

18 July 2013

Developing a Good TeamAnn Watson of B There Mindset Coaching covers the nature of developing a balanced team

23 July 2103

Personal Property Securities (PPS) RegisterHalf day seminar (9am – 12.30pm)

22 August 2013

Service Providers – Worth their Salt?Panel Debate 19 September 2013

Service Providers – Worth their Salt?A panel debate exploring the various service providers in the industry and what value they bring to the credit management table. (New Breakfast Session)

October 2013

Youth Networking Evening(6.00pm to 8.00 pm)

October 2013

Liquidation Case StudyHalf day Seminar Seminars (2.00pm to 5.00pm)

October 2013

Champagne Appreciation (in time for Spring Racing Carnival)

November 2013

CCE Lunch (12.00pm – 2.00pm)

21 November 2013

Directors Liabilities “The Year in Review”

4 December 2013

Christmas Dinner

Events Calendar

2 Days. 200 Kilometres. 1 Epic Ride.This year on 26-27 October, Jeff Hurst and 3 workmates from Scalzo will be riding to Conquer Cancer, a 2-day, 200km cycling event that raises funds for cancer research and treatment. All proceeds from the event go to the Peter MacCallum Cancer Centre, the only public hospital in Australia solely dedicated to cancer. They have named their team after a work associate who has been hit by Cancer!

Membership MilestonesThis quarter we celebrate the following membership milestones;45 years – Bruce Murfet LICM, joined in April 196845 years – Betty Fleming LICM, joined in April 196825 years – Angelo Gasparini MICM, joined in April 198825 years – Jeff Hurst FICM, joined in May 198825 years – Nigel Plaskett MICM, joined in May 1988


New Sponsor in Victoria/TasmaniaThe Victoria/Tasmania Division welcomes Experian as a sponsor in 2013.

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