The Publication for Credit and Financial Professionals IN ... · Details on the NSW Credit Team of the Year award in 2012 appear in this edition of the magazine on page 5. The 2012

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u Insolvency

u Factoring & Discounting

u Legal Recoveries

u Collections

u Human Resources

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The Publication for Credit and Financial Professionals I N A U S T R A L I A

Volume 19, No 4 May 2012

That’s why you need CreditorWatch.com.auTTTTTTTTTTTThhhhhhhhhhhhaaaaaaaaaaaaatttttttttttt’’’sssssssssssss wwwwwwwwwwwwwwhhhhhhhhhhhhyyyyyyyyyyyyy yyyyyyyyyyyyyoooooooooooouuuuuuuuuuuuuu nnnnnnnnnnnneeeeeeeeeeeeeeeeeeeeeeddddddddddddd CCCCCCCCCCCCCCrrrrrrrrrrrreeeeeeeeeeedddddddddddddiiiiiiiiiiittttttttttttoooooooooooorrrrrrrrrrrrrWWWWWWWWWWWWWWWaaaaaaaaaaaaattttttttttttcccccccccccchhhhhhhhhhhh........ccccccccccccoooooooooooommmmmmmmmmmm........aaaaaaaaaaaaauuuuuuuuuuuuuu

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With our competitors charging up to 80% more, why wouldn’t they when they can start monitoring all of their customers at affordable rates. Members receive:

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For AICM corporate accounts contact Chris Tredwell on 1300 50 13 12 or email [email protected]

Want to know why more and more corporates are joining CreditorWatch?

“Hindsight is a useless tool”

May 2012 • CREDIT MANAGEMENT IN AUSTRALIA

Rodney Jarvis

12

Moses Samaha

4

VOLUME 19, NUMBER 4 – May 2012

Presidents Report 3

Credit ManagementThe Pitfalls and Red Flags of Bad Credit Management 4 – is any Business Good Business?By Moses Samaha

Credit Bureau Meetings and the Internet 6By John Theoharris

A Shorter Deadline for Registering Company Changes (PPS Act) 8By Greg Young and Paul White

Fuji Xerox Joins AICM Employer Membership Discount 9

Information Shortages Hinder Small Business Growth 10By Damian Karmelich

Credit Management Logistics and Your Career 12By Rodney Jarvis

Australian Benchmark Initiatives – Receivables survey 14

The Need for Data on all Segments of the 16 Australian Business Sector is IncreasingBy Colin Porter

PromotionsCredit Team of the Year 2012 3

Employer Membership Discount Program Promotion 9

2012 YCPA 10

National Conference 2012 17

Credit Network 27

QLD Division: February CNN – Presenters Brian Kay and David Maczek.

SA Division: James Devonish (left) with new member John Madsen.

30 33

CONTENTS

John Theoharris

6

Colin Porter

Damian Karmelich

10

16

EDITOR/PUBLISHERTerry Collins

Email: [email protected]

CONTRIBUTING EDITORSVanessa Graydon NSW

Murray Ashford QLDGail Watt SA

Christine Ashworth WAVIC/TAS

ADVERTISING MANAGERTony Paul

Association MediaTel: (02) 9460 7955

Fax: (02) 9460 8632Email:

[email protected]

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, 2012.

FEATURES

July 2012Human Resources

Insolvency Practitioners

October 2012Export and Credit Insurance

Mercantile AgentsA Special Edition to Coincide

with the National Conference in Surfers Paradise

EDITORIAL CONTRIBUTIONS SHOULD BE SENT TO:

The Editor, Level 1,619 Pacific Highway

St Leonards NSW 2065or Email: [email protected]

CREDIT MANAGEMENT IN AUSTRALIA • May 2012

InsolvencyCorporate Insolvency in the Australian Construction Sector 18 – Key Findings from ASIC. By Robert Jochelson

Proof of Debt (Part 2). By Michael Peldan 22

Factoring and DiscountingIFD – Chairman’s Address and AICM Student of the Year 24

Legal RecoveriesAutomatic Fee Calculators – Debt Recovery Tools that Add Up 26By Karl Hill

CollectionsWarning to Credit Managers – the Rules Have Changed Forever 28By Roger Mendleson

Human ResourcesMarket Salary Matters. By Liana Gorman 29

Around the StatesQueensland 30New South Wales 32South Australia 33Victoria/Tasmania 36Western Australia/NT 38New Members 40

VIC/TAS Division: Golf Day – No pressure from the team mates!

WA/NT Division: Alan Langford, chief economist, BankWest with Colin Phillis, WA President.

36 38

Association Mediafor advertising opportunities in

Credit Management in Australia

CALL Tony PaulPhone: 02 9460 7955 Fax: 02 9460 8632


DIRECTORS

Australian President Frank Vredenbregt MICM CCE

Australian VP FinanceG.L. Morris MICM CCE

Professional DevelopmentE.R. Verge MICM

YCPA & CCER. Freier MICM CCE

Marketing & PublicationsJ. A. Neate MICM

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

EXECUTIVE OFFICES

Queensland DivisionToni SawyerExecutive OfficerPO Box 239Petrie QLD 4502Tel: (07) 3482 2111Fax: (07) 3482 2111Email: [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]

Roger Mendelson

28

Michael Peldan

22

Liana Gorman

Karl Hill

29

26

May 2012 • CREDIT MANAGEMENT IN AUSTRALIA 3

aicmf rom the p res iden t

Terry CollinsChief Executive Officer

Whilst the Australian President is on leave in Europe on a well-earned holiday, AICM CEO Terry Collins provides an update on current developments.

The AICM – Employer Sponsored Member Discount Program continues to grow with 33 companies having signed up 394 employee members as at the end of April 2012. Employers gain significant savings from the discounted fees for AICM membership for their employees. The latest company to join was Fuji Xerox Australia Pty Ltd with 63

members. An article from Fuji Xerox and details of the Employer Sponsored Member Discount Program appear in this magazine at page 9.

AICM recorded membership growth in 2011/12 and through the support of credit practitioners and our sponsors we have been able to continue to deliver professional development and training, networking, submissions to government and awards to promote and enhance the credit industry in Australia. Membership renewal Invoices will be forwarded to all members in May 2012 for the 2012/13 membership year.

The Young Credit Professional of the Year Award (YCPA), sponsored by D&B, has been the subject of review in 2012 and made more accessible to young credit practitioners from a wider range of positions in credit in Australia. Applicants and those seeking information on the YCPA program need only go to the AICM web site and click on a link and an AICM representative will contact them to personally inform them of the benefits of the program and the application process. The response to date has been very strong and applications remain open until 31 May 2012.

The Certified Credit Executive award continues to grow due to there now being 2 opportunities to sit the CCE online, open book examination each year and the ability of candidates to submit a professional paper identifying their own skills and understanding of credit practice. 21 candidates sat the CCE examinations in September 2011 and March 2012. All candidates passed the online examination and to date 11 professional papers have been submitted with all 11 successfully graduating to CCE status.

The Certified Credit Executive award remains current for 3 years, during which time such members need to accumulate a further 30 professional development points to gain recertification for a further 3 years. Certified Credit Executives who graduated or recertified in 2009 will be required to recertify in 2012 and to do so will need to have accumulated 30 CCE professional development points by 31 August 2012. All CCE’s who graduated or recertified in 2009 will be sent a schedule in May, of their current points accumulation so that they may secure the necessary points by 31 August 2012.

CCE professional development points can now also be gained by active participation on the AICM sponsored Credit Network Web Site. The Credit Network Web Site Forum is a facility for all credit practitioners to communicate, discuss, ask questions and receive answers on a broad cross section of credit matters. AICM members can now gain 2 CCE professional development points per year for their participation on the Credit Network Web Site Forum. Further information on the Credit Network Web Site and CCE points accumulation appears in this magazine at page 27.

AICM NSW Division has conducted the NSW Credit Team of the Year for the past 5 years and due to the success of this award program and the fact the many companies in Australia operate in a number of States and Territories, AICM and sponsor Veda are aiming to make this a national award in 2013. Details on the NSW Credit Team of the Year award in 2012 appear in this edition of the magazine on page 5.

The 2012 AICM National Conference will be held at the Marriott Resort and Spa, Surfers Paradise on 10 - 12 October 2012. The Conference Program and Registration Forms will be distributed in May 2012.

AICM undertakes a series of national seminars in addition to the monthly professional development sessions conducted by Divisions. AICM conducted a series of seminars on the Personal Property Securities Act in March 2012 in all AICM Divisions. These seminars were exceptionally well attended by members and non-members of the wider financial community with over 110 delegates in attendance. Further national seminars are being prepared for mid-2012 for the expected legislative changes to the Privacy Act.

The AICM National Office relocated from level 3 to level 1, 619 Pacific Hwy. St Leonards 2065, in early March 2012. Whilst the distance moved was small the disruption was similar to any move requiring a cessation of telephone and web based services. I thank the AICM staff and executive officers for their support and members for their understanding for any delays in services resulting from this move.

4 CREDIT MANAGEMENT IN AUSTRALIA • May 2012

Credit Management

Samaha, Head of Commercial Risk at Veda. By better understanding credit and fraud risk at the point of application, this can reduce the incidence of bad debt write offs and ultimately improve the bottom line. But according to Moses “Good credit management doesn’t stop there. Businesses should also continue to monitor their credit portfolio to limit exposure to risk from late payment and external administration.”

Veda statistics show that by looking at the people behind a business and any related entities they belong to, future losses can be substantially reduced. A company is four times more likely to find itself in a troublesome situation in the next 12 months if one of its directors has had adverse information on their credit file. An analysis of a company’s credit enquiry activity provides a good insight into their credit demand and is also a leading indicator of risk stability. On top of that, businesses should continue to monitor their credit portfolio to limit exposure to risk of late payment or from external administration.

Veda has a number of easy tips that businesses should keep in mind; Veda’s 5 C’s of credit can be used as a guide in assessing the credit risk of potential creditors. The 5 C’s stand for: character, capacity, capital, cashflow and conditions.1. Character: Research the people

behind the organisation you are dealing with. It’s important to assess a person’s willingness to pay, based on their overall attitude, their company values and the financial track record of the business and its leaders. Check for any signs of a dark financial past. Factors such as past defaults or court actions can give important insight into the financial and ethical standards behind the people running the business.

2. Capacity: Assessing the prospective

organisation’s capacity to generate sufficient cash flow to cover any outstanding debts should be the highest priority of any credit manager. This is critical before investing in a company or extending a large amount of credit.

3. Capital: Understand your customer’s capital base, including their cash and other assets, as well as shareholder commitments. This is important to ensure credit has not been extended to an organisation that can’t afford to repay their debt.

4. Cash Flow: Cash flow is the “lifeblood” of any business. Poor credit control will greatly affect cash flow and the ability to pay debts on time, so it pays to develop an understanding of the financial situation of the business to which you are extending credit. This will give you an indication of how swiftly they may pay you for your products or services and the likely impact on your company finances.

5. Conditions: The current economic conditions in each marketplace may affect the ability of a business to repay debt on time, which may require adjustment of your credit policies. Consider factors such as the impact of international economic conditions on the domestic market, such as offshore financial volatility and fluctuating exchange rates, as well any changes in the political landscape. Is the prospective customer susceptible to economic downturns? Veda can help businesses better

understand the people behind the organisation they are giving credit to. The company offers tools to proactively monitor behaviour of a customer’s portfolio and send through triggers and alerts on real-time basis. For more information, visit www.veda.com.au n

The pitfalls and red flags of bad credit management– is any business good business?

By Moses Samaha

Moses Samaha

Recent news reports have shown a long list of companies entering external administration and having issues with bad debt. The increasing number of organisations finding themselves in trouble indicates a greater need for companies to pay closer attention to credit risk management. Veda, a leading provider of commercial and consumer data intelligence and insights, is adamant that stringent credit management is key to keeping a business healthy.

Veda’s Business Credit Demand Index for the December 2011 quarter showed that mainly small and medium sized businesses (SMBs) are suffering from a high default rate with more than a quarter (26%) of defaults. But what’s behind the story of so many struggling businesses is not always clear. “Before signing up new creditors, most businesses should perform a thorough check on the company and its Director(s) to evaluate their risk exposure,” explains Moses

Become the NSW Credit Team of the Year

By nominating your credit team you will be in the running to win:

• $2000 in AICM services• $1000 cash prize• Professional development training during 2012

(available to all shortlisted nominations)• Invitations to exclusive relevant industry and networking events• An invitation to present at the 2012 AICM conference• Increased professional and company profile via AICM and Veda• 12 months AICM membership for each winning team member

AICM members will be notified when nominations open electronically.For more information call the AICM national office.

Proudly sponsored by Veda.

Recognising NSW credit excellence in 2012. This award will go national in 2013. Nominations opening soon!

“ Winning this award has seen the team gain the respect and acknowledgement from within, that their efforts so dearly deserve.”

Grant Morris, National Credit Manager at Coates Hire (representative from the 2011 winning team).


Credit Management

I read with interest the Technology & Software article written by Karl Hill in the March 2012 issue of Credit Management in Australia. Everything he said made sense and from my perspective the concepts of using technology and software can be extended to apply to other traditional sources of information used by credit managers – and that is credit bureaus.

The bureau meetingThe concept of the credit bureau is not new with participants benefiting from both the exchange of information and the networking opportunities presented in a meeting environment. Bureaus take many forms varying in number of meeting participants, supply sectors represented, formal or informal structure and meeting frequency. The ultimate success of a meeting being dictated by the information participants are willing to share.

While the benefits of a bureau meeting can rarely be disputed there are times in our modern day business environment that we can’t always afford

to spare the resource or spend the time attending a meeting. With less time on our hands we must make important decisions about how to spend that time focusing on other priorities; meeting with clients solving problems, keeping the cash flowing in by chasing the slow payers or simply maintaining relationships with our clients.

The internetWouldn’t it be great if we could use technology and software so that we can still focus on our priorities and still benefit from the information flow of a bureau meeting without having to actually attend the meeting. By using a central database accessible only to bureau

members we can use the internet to do just that. Members can submit their information in a common format that can then be engineered so as to give meaningful information about debtors both in a current and historical format. Payment patterns can be determined and critical indicators can be compared so that members can be warned of possible problems.

We do this at Building Trade Credit (BTC) with each of our members, varying in size from the major corporates supplying the building and construction industry to smaller businesses with less than $5 million annual turnover, submitting their full debtors aged trial balance.

% indicators and critical warningsThe database lists average payment indicators in the form of a rolling quarterly percentage for the current and past twelve months. A percentage of 100 means that all money owed for the month was under 60 days old. A percentage of less than 100 means that

some money owed was 60 days or older. The sample data above (see Table 1) for a company shows it has been paying 90% or more of money owed within 60 days. BTC alerts members each month if the change from Qtr1 to Current Qtr is greater than 5%.

Consolidated balancesWe also report the consolidated dollar exposure to our members further assisting analysis of the account as shown in the sample in Table 2 (see opposite page).

The contacts for each supplying member making up the sample are published so that you can obtain more detailed information about the customer.

Credit bureau meetings and the internetBy John Theoharris*

John Theoharris

By using a central database accessible only to bureau members we can use the internet to do just that.

Current Qtr Prev Qtr 1

Prev Qtr 2

Prev Qtr 3

Prev Qtr 4

Prev Qtr 5

Prev Qtr 6

Prev Qtr 7

Prev Qtr 8

Prev Qtr 9

Prev Qtr 10

Prev Qtr 11

92.60% 91.80% 93.20% 95.70% 98.50% 96.00% 94.50% 93.50% 94.80% 90.50% 89.50% 90.40%

TABLE 1


Credit Management

Credit bureau meetings and the internetSecurityStrict security procedures ensure total security of all trial balance data. Companies concerned that others may see their debtor’s list need not worry. All reports are produced on a consolidated basis ensuring total anonymity of trial balance data. BTC has been operating with its security intact since its inception in 1984. n

*John Theoharris is Commercial Services Manager at Building Trade. He can be contacted by email [email protected] or direct (02) 9277 3144.

Process Serving • Field Calls • Repossessions • Skip Tracing Investigations • Court Filing • Examination & Installment Hearings

ISO 9001:2000 LIC: QEC23702

SAI Global

www.expressmercantile.com.au

Locked Bag 170 PARRAMATTA NSW 2124

Australian Legal Support Group Pty Ltd • National Service Solution • DX 28373 PARRAMATTA • ACN 060 481 978Commercial and Private Inquiry Agents (Master License Number 409398202)

Level 11, 56 Station Street PARRAMATTA NSW 2150

Telephone: 1300 556 025 Facsimile: 1300 556 035

You have to hand it to us.

So we can hand it to them.

"Professional Field Work. It's what we do."

Month End Current 30 days + 60 days + 90 days + Total

Current $3,607,358 $349,181 $98,092 $77,029 $4,131,660

Prev mth 1 $3,455,704 $126,222 $156,334 $91,211 $3,829,471

Prev mth 2 $4,706,997 $274,111 $152,609 $423,555 $5,557,271

Prev mth 3 $5,655,372 $589,731 $374,672 $131,085 $6,750,860

Prev mth 4 $5,077,337 $400,812 $79,556 $56,578 $5,614,282

Prev mth 5 $4,010,232 $106,447 $12,691 $61,422 $4,190,792

Prev mth 6 $3,486,664 $991,533 $4,582 $4,073 $4,486,853

Prev mth 7 $4,222,031 $924,501 $467,496 $24,886 $5,638,914

Prev mth 8 $2,990,768 $991,018 $190,998 $93,418 $4,266,202

Prev mth 9 $2,993,162 $836,131 $54,008 $68,747 $3,952,048

Prev mth 10 $1,423,974 $467,510 $68,824 $57,186 $2,017,493

Prev mth 11 $1,250,529 $529,628 $496,248 $43,862 $2,320,266

Prev mth 12 $1,253,688 $1,280,308 $47,184 $18,324 $2,599,503

Prev mth 13 $1,672,468 $1,613,426 $168,925 $33,709 $3,488,529

TABLE 2


Credit Management

The Commonwealth’s Personal Property Security Act 2009 (PPS Act) has certainly brought about many changes. The legislation has dramatically changed the legal landscape as it relates to personal property interests; transforming a number of state and national registers into a single regime regulated by federal laws. One subtle but, significant change has been an amendment to the Corporations Act 2001 (Cth) that governs the time-frame for registering what was formerly known as a notice of a company charge (now known as a security interest).

Before the PPS Act, Chapter 2K of the Corporations Act 2001 (Cth) set out the registration requirements and priorities for company charges. Broadly, it required a notice of a company charge to be registered with ASIC within 45 days of its creation. If the notice was registered more than 45 days after its creation but less than six months before the winding up of the company granting the charge, then the charge would be void against a liquidator.

The PPS Act, on the 30 January 2012, repealed Chapter 2K of the Corporations Act. Chapter 5 of the PPS Act now covers, for the most part, the registration of a company charge in the new Personal Property Security Register (PPSR). The PPS Act also inserted a new provision (s588FL) into the Corporations Act that has shortened the period in which a charge needs to be registered. Instead of 45 days, the time period is now 20 days. The same consequences apply should this new shorter 20 day registration period be ignored. That is, the charge will be void against a liquidator if it was registered outside the 20 day period and less than six months before

the winding up of the company granting the charge.

Some examples of the operation of s588FL are:

1. Sprocket Company grants to The Bank a security interest in all its present and future sprockets in order to secure a loan from The Bank. 10 days after the security interest is granted The Bank registers it in the PPSR. Sprocket Company is wound up 3 months after granting the security interest to The Bank. Because The Bank’s security interest was registered within 20 days of its creation it remains valid despite the winding up of Sprocket Company.

2. Sprocket Company grants to The Bank a security interest in all its present and future sprockets in order to secure a loan from The Bank. 25 days after the security interest is granted The Bank registers it in the PPSR. Sprocket Company is wound up 3 months after granting the security interest to The Bank. Because the Bank’s security interest was registered outside the 20 day registration period it is void as against the Liquidator.

3. Sprocket Company grants to The Bank a security interest in all its present and future sprockets in order to secure a loan. 25 days after the security interest is granted The Bank registers it in the PPSR. Sprocket Company is wound up 8 months after granting the security interest to The Bank. Even though the registration was made outside the 20 day period, The Bank’s security interest remains valid. This is because it was registered more than six months before the winding up of Sprocket Company. n

*Paul White is Knowledge Manager, MacGillivrays Solicitors

*Greg Young is Partner, Litigation and Dispute Resolution, MacGillivrays Solictors

www.macgillivrays.com.au

A shorter deadline for registering company chargesBy Paul White and Greg Young*

Greg Young

Paul White


Credit Management

Fuji Xerox Australia is part of a world leading enterprise for business process and document management services. Over the last few years, the core business model has increasingly evolved from one of sales and leasing of multifunction devices, to that of financed solutions including outsourced document services. This change has put pressure on the finance and credit teams to change both processes and commercial models to meet the business’ revised needs.

While the new business model provided an opportunity for growth in the business, it also required the credit team to invest time and resources in acquiring new skills and to develop benchmark processes. The credit team responded to these challenges with two strategies – (1) to become members of the Australian Institute of Credit Management and (2) to support the professional development of staff and management through the provision of the Certificate IV in Credit Management.

In January 2012, Fuji Xerox Australia enrolled 63 employees in the Employer Member Discount Program with AICM.

The team will now benefit from the networking and training provided by the Institute. From a company perspective, they

have a chance to see, first hand, the practices used by other organisations and learn from industry leaders. The information provided by the Institute will help the team develop and benchmark their own processes.

The membership also offers an excellent opportunity to acquire professional skills that will help them contribute to the company and also offer insights into their career path. In the words of Tony McHugh, National Administration Manager for Fuji Xerox Australia: “We want our team to feel that our company has given them the opportunity to develop professionally and personally and to feel proud of their achievements”. n

The Employer Sponsored AICM Member Discount Program offers employers the opportunity to enroll multiple employees as members of AICM at an employer sponsored discount rate.

The offer provides between 4 and 10 employee members at a cost of $1,000 plus GST, between 11 and 20 employee members at $2,000 plus GST and between 20 and 50 employee members at $2,500 plus GST.

The current individual membership fee is $295 (incl. GST) plus $55:00 (incl. GST) new member administration fee.

The $55:00 new member administration fee will be excluded under the employer sponsored membership program.

This offer will result with significant savings for employer sponsored new members of the AICM. For example the cost of 10 individual new members

would normally be $3,500 (incl. GST) compared with $1,100 (incl. GST) under the employer sponsored membership program and for 20 employee members, $7,000 (incl. GST) compared with $2,200 (incl. GST) under the employer sponsored membership program. The savings are even greater for up to 50 employee members.

Existing members may be included in the employer sponsored membership program. For example an employer currently with 4 AICM members can enroll 6 more new members, up to a total of 10 employer sponsored members, for $1,100 incl. GST or 16 more new members, up to a total of 20 employer sponsored members, for $2,200 incl. GST and 46 more new members, up to a total of 50 employer sponsored members, for $2,750 incl. GST.

Employer sponsored members will be individual members of the AICM and have full entitlements including being eligible to run for office, attend

and vote at AGM’s, attend AICM events, seminars and conferences at member rates, access the members’ section of the AICM web site, receive complimentary copies of the AICM magazine and receive discount member rates for qualification based training run by AICM.

AICM Members will carry their membership with them should they leave their place of employment, however the employer will be entitled to replace such an employee member with another employee member for the remainder of that membership year.

All employer sponsored new members will need to complete an individual membership application form, however instead of paying individually, such application forms should be forwarded to the AICM by the employer with the names of all employees covered by the employer sponsored membership program, including current members and the appropriate payment.

For more details contact your Division AICM office or the AICM National Office at [email protected] or ph (02) 99064563

Employer Sponsored - AICM Member Discount Program

Fuji Xerox Australia joins the Australian Institute of Credit Management

u Significant Savings* for Employer Sponsored Members of the AICM *(Savings of up to 300% have already been achieved by companies enrolling their credit employees as AICM members)

u Companies can enhance their status as ‘Employers

of Choice’ and improve Retention Rates by enrolling their credit employees as AICM members


Credit Management

made it all the more difficult for creditors to identify the level of risk associated with lending to small businesses.

What this has created is an ever-expanding lending gap between the small business community and credit institutions. Lenders are constrained, not only with mitigating factors such as wholesale funding access, prudential requirement and government regulation but overwhelming by a lack or risk-relevant data.

Recent analysis of the Dun & Bradstreet (D&B) database found 37 per cent of small businesses would immediately qualify for credit if lending institutions were able to adequately assess their risk. A further 50,000 would also be deemed creditworthy, under an ‘average’ risk classification.

This analysis was based on a combination of D&B’s Consumer Credit Bureau information and trade payment data, used together to build a bank of knowledge on this elusive group. This new information forms the basis for a small business risk scoring (SBRS) tool, allowing D&B to undertake comprehensive risk assessment for the first time. This has enabled identification of Key Influencing Factors (KIFs), as

they apply to SMEs as part of the risk identification process.

The new scoring system is about recognising the significance of personal credit information when assessing small business. One of the clearest benefits associated with incorporation is a clear avenue for obtaining new lines of credit, using the company’s own credit history, yet as many as 60 per cent of small businesses operate without a separation of owner and entity. This remains one of the biggest obstacles for over one million unincorporated entities in Australia wishing to apply for credit.

Although stymied somewhat by the country’s current privacy laws, which prevent positive data collection, KIFs such as time elapsed since last default, the volume of credit enquiries made and trade payment behaviours have helped build an SME risk model.

For instance, the amount of time since the occurrence of an adverse credit event is as significant to a risk assessment as the event itself, as it tells the story of a possible period of financial re-stabilisation. Similarly, a high volume of credit enquiries can indicate a high volume of rejections and an equally elevated risk rating.

Information shortages hinder small business growthBy Damian Karmelich*

Damian Karmelich

Nominations for the 2012 Young Credit Professional Award, sponsored by D&B, are now open. If you 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 beautiful Surfers Paradise Marriott Resort and Spa on the Gold Coast.For more information go to www.aicm.com.au

You have what it takes to be the2012 Young Credit Professional.

Despite accounting for 96 per cent of the Australian economy, small businesses remain a largely misunderstood segment of the business community. Yet very little has, or could be done in the past to map patterns of behaviour, and as a consequence there is a dearth of information on what is perhaps the country’s most important demographic.

As small businesses are predominantly unincorporated entities with little or no traceable commercial credit history, this has


Credit Management

Trade payment behaviours, however, are the most predictive of all three KIFs. The rate small businesses are able to settle trade accounts sheds light on the ebb and flow of cash within the business; the ultimate health measure for firms of all sizes. Studies show unincorporated entities are often vigilant when it comes to maintaining business accounts, while their incorporated cousins maintain average trade payment terms almost two months beyond the 30-day standard.

Analysis of small entity business-to-business payment behaviours found those falling into the ‘severe’ risk category were 2.5 times more likely to pay trade accounts delinquently. Similarly, businesses in this category were twelve times more likely to take 120+ days to settle trade accounts.

D&B’s analysis also found certain sectors and locations were more likely to be overlooked than others. SMEs in key industries such as agriculture,

retail, construction and transportation were up to 1.4 times as likely to be underrepresented in the credit market, as were regional firms. While finance and service sector firms were overrepresented.

Concurrently, our analysis uncovered hundreds of thousands of small firms in this group which are at severe risk of failure; 12 times the insolvency risk of other unincorporated entities. However, uncovering such a large number of high credit risk individuals should certainly not be viewed in a negative light.

It is important to keep in mind that the aim of this analysis is to reduce information shortages within this sector, and to remember that risk assessment is as much about avoiding bad risk as it is about identifying the good. Despite the relatively high number of overly-leveraged small business operators, the picture is overwhelmingly one of untapped potential.

It is crucial then for credit providers to move toward a more positive approach to

SME lending; opening up new pathways for credit through informed decision-making rather than preconceptions of risk.

Ultimately, the SBRS is entering the market at a critical time for credit professionals and the economy as a whole. It comes as Australian Bureau of Statistics data indicates that business lending as whole has reduced significantly since the beginning of the year, while the number of businesses entering the market fell 11 per cent.

Independent risk assessment of small businesses opens up a dialogue made difficult under the existing system. The outcome is the ability to engage with a previously untapped market of credit worthy, and potentially credit hungry, small businesses. This represents a significant opportunity for credit providers and the broader Australian economy. n

*Damian Karmelich is Dun & Bradstreet Risk Management Solutions Director.www.dnb.com.au

If only businesses were this upfront. Fortunately, there’s Dun & Bradstreet. No matter how big or small your customer or prospect is, we’ll give you the complete view of their risk profile with a comprehensive credit check. To see how we can help you visit our website www.dnb.com.au or call 13 23 33.

“Before we do business, I should point out my company is about to go into liquidation”

• 165 million company records • Australia’s largest business database

The D&B advertisement appearing in the March 2012 edition of the AICM magazine, incorrectly mentioned the National YCPA Finalists from 2009. This was an error by AICM and we apologise for the mistake.


Credit Management

My (illustrious) career in credit management began in London in 1972 where I began working as a Credit Clerk by default. “Go over there and phone for money” were the instructions and never for a moment did I imagine that 40 years later and would still be “phoning for money”.

Along the way I’ve sure made mistakes and I’ve learnt a lot about credit management that you won’t find in textbooks. I don’t claim to be a cutting edge expert but I have good technical knowledge in credit management and I know what works. This knowledge has returned me a substantial salary (i.e. well above the average wage) over my working life and perhaps you may be interested in the following observations.

(1) Without doubt, the two key aspects of my credit management career have been advanced education (e.g. tertiary) and a sense of humour. It occurred to me that I needed to know my stuff – what is working capital and how do you calculate it, what’s the difference between a Receiver and a Liquidator, what is the ASIC definition of insolvency. You need to know the vernacular. I owe much of my success to the AICM for providing the 5-year (part-time) course in Business Studies – Credit Management at Swinburne (then called Prahran College). I also graduated as a Certified Credit Executive (CCE) through the AICM some years later.

(2) Credit Policy and your company’s “corporate image” – when it comes to Credit Policy there is no “one size fits all”. Every industry has a multitude of variations in its market place. Company A may hold 60% market share and be able to run a tough credit policy whereas Company B may only have 6% market share and have 40 competitors. In this scenario it would make it tough to run 30 days terms and bring out the firing squad out at 31 days.

(3) For most of my working life

I’ve kept a “little black book”. I record anything of significance especially compliments from directors/shareholders/senior managers and customers. This comes in very handy during your annual review – more later.

(4) Delivering on KPI’s – I’ve heard several colleagues say that “if the company wants me to work harder they’ll have to pay me more” – wrong approach. The key to success is to get your foot in the door and be so bloody good they don’t want you to leave! Now you have leverage. I have more than doubled my package (including a company car) with several companies by using this approach. It’s not arrogance but more about self-confidence.

(5) Image is always important – do you present as a professional? People will take you at your own self-worth. If you act and present as a successful credit professional, people will relate to you as such.

(6) You have to sell the importance of credit management to your company; especially to your sales team and senior management. Make sure the key people in your company are aware of your successful achievements.

(7) Plan your work and work your plan – you need to work to a “collection path”. I know that by the 15th of every month I should have actioned/contacted every account outside of 60 days, following this I “sweep” every overdue account 45 to 60 days, then every account above $5,000.00 and by the 25th of the month I’ve covered all $2,000.00 to $5.000.00. By using this method I achieve saturation coverage of all overdue accounts. The last 5 days of the month I focus on collecting major accounts within 30 days. I usually focus on getting the biggest bang for my bucks and target the larger accounts first.

(8) You need to be tuned into the market – what’s happening out there? Belonging to a Trade Bureau gives your

Credit management logistics and your careerBy Rodney Jarvis*

Rodney Jarvis

“Without doubt,the two key aspects of my credit management career have been advanced education ... and a sense of humour”


Credit Management

company value for money. By meeting with 12-20 other credit managers every two months will allow you to channel into decades of experience and history in your industry. Also, using Veda or D&B makes good sense and is cost effective. I no longer phone for trade references as they’re unreliable, instead I refer to credit scores and Trade Bureau feed back for new account assessment.

(9) Every day I view Australian Insolvency Appointments (online): with about 50-70 businesses going into liquidation every day, you need to be up to speed.

(10) Quite often in credit management, you are approached for quick decisions. Sometimes it is possible to give an answer immediately and sometimes not. I usually say “leave it with me and I’ll get back to you in [say] 15 minutes”. Don’t feel pressured to make a hasty decision that you may later regret.

(11) Many credit managers do not receive adequate reward for their return to the company, and worse still, many credit

managers aren’t good at selling their worth. Don’t be merely a “cheque ticker” but rather be an enthusiastic and driving force in your company. Get professional, get educated and get motivated. The world will step aside for a man (woman) who knows where they’re going. When you have your annual review, take your little black book along and put it on the table. If you aren’t happy, quote instances (times, dates and names) of high achievements.

(12) Also, download job vacancies with a similar workload to yours. Phone up and find out the package being offered and make a request “in writing” asking for a salary increase to match the market rate. I have done this many times, but you must be able to demonstrate high achievement and complete those studies first.

(13) One of the best ways of measuring credit performance is by the percentage received of collectable debt. It’s an easy calculation – start with your total debtors ledger balance – subtract

extended terms customers (i.e. not yet due for payment – then subtract bad and doubtful debt and you have a net figure that is due for payment. Then divide the total monthly receipts into the total collectable and you may finish with 55% - 75% - 95%. As a rule of thumb, 75% or above is quite good to excellent. Below 60% is falling short of the mark. Of course it depends on your industry and your market share (big fish or small fish – big pond or small pond?)

(14) I cannot cover every contingency in this short article. There are credit managers on $65,000 and there are credit managers on $160,000+. Be proud, be professional, get educated and never lose your sense of humour. Good luck. n

*Rodney Jarvis is National Credit Manager, Penrite Oil Company.

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Credit Management

In terms of the Receivables study, 20 of Australia’s leading organisations chose to participate, providing interesting, as well as some surprising trends. Participating organisations represented a broad cross section of industries, with 45% being ASX listed. The respondents had a median revenue of $668 million (with 29% being greater than $1 billion in revenue), and a median headcount of 1,350. The quality and number of participants has ensured that the findings are reflective of what is currently happening in Australia, and they provide clear insights for business decision makers.

Respondents had generally centralised their Receivables functions, with none offshored or outsourced. While this is the case, a number had chosen to maintain a decentralised Receivables model to support customer service objectives. Interestingly, there seemed no appetite for offshoring or outsourcing. Direct discussions with respondents indicated that there is a general view that the cost arbitrage when applied to the headcount and volume size of most Australian organisations, did not justify the business case. When combined with other risk factors, the strategic imperative was to focus on quality service delivery not marginal cost reduction.

In terms of improvement strategies for 2012, there was a consistent theme that improvements could be made in relation to operational reporting and service level agreements. It was noted in the results that high performing teams report well on themselves, allowing them to proactively identify positive performance, and areas for improvement. When supported by service level agreements, improved business partnering is achieved through mutually understood obligations.

The key findings from the 2011 Receivables study were:

z The majority of organisations do not provide early settlement discounts

z Collections are still largely managed through spreadsheets or manually, with limited use of automated solutions

z Receivables reporting was generally seen as poor, and a key area of focus for 2012, along with Days Sales Outstanding (DSO) reduction

z The median DSO was 35, with the top quartile significantly reducing the amount of days beyond this.

This article is only able to provide a small snapshot of the results from the 2011 study. The full study provides a detailed analysis of better practice, and in depth metrics, including quantile measurements for “poor”, “average” and “good” for a range of different performance indicators including:1. Days Sales Outstanding2. Remittances per FTE3. Customer Accounts per Collections

FTE4. Percentage of Payments received

electronically5. Days referred to Collections agency

Further information, including access to the full results can be found at www.australianbenchmarks.com.au.

In 2012, the Australian Benchmark Initiative sponsored by Optim2, www.optim2.com.au, will be looking to build upon the success of 2011 with expanded studies. In addition, the intention is to establish communities of practice so that practitioners can directly share with one another their expertise and experience. Organisations looking to participate in 2012 can register online at the above address. n

The Australian benchmark initiative focused on receivables

Many Receivables organisations do not have agreed service levels with the business, and do not report on themselves.

Australian companies are always demanding information on better practice, and key metrics that can support any business case for change. Due to a lack of Australian sourced metrics, companies have been forced to rely in international based data. The Australian Benchmark Initiative was established in June 2011 to bridge this gap, with the objective of building a set of local finance function benchmarks, and facilitating the sharing of better practice between Australian companies.

For the inaugural 2011 studies, the Australian Benchmark Initiative focused on the transactional areas of Purchase to Pay, Payroll and Receivables. Each study focused on a range of qualitative and quantitative factors, including the management operating environment, metrics and future strategy. The study was carried out from October to December 2011, and the results were published on 17 February 2012.


Credit Management

Other themes from the study included:

Theme Description

Centralised Receivables functions 75% of respondents have centralised Receivables functions

Documented and standardised policy and procedures

80% of respondents had standardised processes, but most indicated that policy and process requires improvement

Service levels and operational reports need to be established

Many Receivables organisations do not have agreed service levels with the business, and do not report on themselves

Rigorous Credit assessment process80% of respondents indicated that their Credit assessment process was good or rigorous

Manual credit file 68% of organisations still maintain manual Credit files

Manual customer invoicing and statement methods

Most organisations rely on manual mailing of invoices and statements rather than electronic means

Standard trading terms Trading terms of 30 days are the most common

High cheque payments17% of payments are still made via cheque, with 71% made electronically (EFT, direct debit, credit card)


Credit Management

to a multi-bureau approach of acquiring this data. All credit report providers will identify historical data and possibly offer a risk score or payment prediction, but what about future adverse data?

There is a growing need to obtain ongoing adverse information after the initial credit check, such as court judgements, payment defaults and companies entering external administration. Credit managers should have access to a system of alerts about their customers as circumstances can change rapidly in today’s business environment.

Small and medium EnterprisesWhere does the SME market fit in the credit management industry? The credit reporting industry in Australia has been good at servicing large corporates and multinationals, but not necessarily providing data on SMEs and for SMEs.

Credit managers in the corporate space are showing an increasing need for more data on SMEs and unincorporated entities. Given that the 1.93 million small businesses in Australia account for more than 95 percent of total businesses in the Australian marketplace, the data from this sector is invaluable in making credit decisions for businesses of all sizes.

Historically, this segment of the Australian marketplace has not used a credit reporting bureau, which has meant that important default data at a smaller business level was going unreported. And as a small business will default on other small businesses before defaulting larger entities this default data is arguably an earlier warning sign than data registered by larger corporates.In a climate of uncertainty, businesses should be taking every step to protect themselves. And, this is especially the case if the

businesses are providing credit to the construction, retail trade, accommodation and food services or manufacturing industries, as these are traditionally the five business sectors with the highest level of insolvencies.

As we see the number of companies being wound up on the increase each quarter, Australian businesses need to be armed with as much information about potential debtors as possible – both historical and impending.

Due to this increased demand for relevant data and its timely delivery by all business sectors in Australia, the growing credit management sector itself is also on the radar for investors and venture capitalists. Recently, Nightingale Partners Pty Ltd, an investment company that provides expansion capital to growing businesses, took a stake in my business, CreditorWatch, recognising the growing potential of the market as whole.

Nightingale’s belief is that the sector is constantly evolving and creating new services to meet the demands of the credit management industry and its clients and should grow strongly over the next one to five years and beyond.

So whilst it may be wishful thinking that we can create a business culture where everyone pays everyone on time, credit managers at businesses of all sizes can certainly make the decision about who is likely to pay on time a far easier and cost effective decision. n

*Colin Porter is Managing Director of CreditorWatch.www.creditorwatch.com.au

CreditorWatch is an online credit reporting bureau and a licensed ASIC Information broker providing company reports, ASIC documents and complimentary e-alerts for ASIC status changes and notification of Court Judgments for all members.

The need for data on all segments of the Australian business sector is increasing

By Colin Porter*

Colin Porter

More than 40 percent of company failures in Australia last financial year were attributed to “inadequate cash flow or high cash use” according to the Australian Securities and Investment Commission (ASIC).

ASIC data revealed there were a staggering 10,481 external administrations due to insolvencies in 2011, representing a 9.2 percent rise on the previous year.

The big question for Australian small to medium sized enterprises and corporates alike is how best to minimise the risk of providing credit to those businesses that are at risk of defaulting? How to access up to date adverse data? And, how to do this in a way that is cost-effective and efficient?

The answer lies in making sure you have access to data from a number of sources. This is indicative of the industry as a whole recognising the need to move

Visit conference.aicm.com.au for details and earlybird registrations

See you at AICM’s 2012 National Conference

Marriott Resort & Spa Surfers Paradise

10th - 12th October 2012

2012 NationalConference

2012 NationalConference


Insolvency

By Robert Jochelson*

The construction industry is regarded as one of the highest risk sectors in which to operate.

During the 1992 NSW Building Royal Commission, Commissioner Roger Gyles heard evidence that the average life of a construction company in Australia was just 7 years. While it is generally accepted that newly incorporated entities pose the highest risk, this year (2012) has already witnessed the demise of a large Australian contractor that has been around for over 100 years.

Adding to the complexity of the problem is the phenomenon of ‘phoenix’ companies where directors of failed companies re-emerge to cause further harm to the industry. All said there is much to be done to reduce the rate of insolvencies and the resulting damage.

Despite many legislative reforms the unfortunate fact remains that the construction sector is still well overrepresented in insolvency statistics. The effect of these corporate failures is that large sums of money owed to creditors are lost and clients are left with the unenviable task of dealing with payment claims and contractual issues while trying to get their projects completed.

For over 10 years Kingsway Financial Assessments has been at the forefront of risk management having successfully minimised potential headaches for its clients by filtering out contractors under financial stress, at risk of insolvency or exhibiting potential risks as a result of their financial structure. This is achieved by carefully examining and reporting on up-to-date financial information pertaining to tenderers prior to the award of a contract and in some cases providing on-going monitoring.

This report is possible thanks to

significantly improved data collection from external administrators by the Australian Securities & Investments Commission (ASIC). Consequently, we are now able to gain a far better insight into the extent of the insolvency problem. In this report prepared by Kingsway, data from ASIC’s recently released insolvency statistics Series 3.2 External administrators’ reports for selected industries are examined with a focus on the ‘construction’ category.

Although we may think of statistics as just numbers and percentages, we should always bear in mind that each and every insolvency is likely to have adverse and often a devastating impact, to a greater or lesser extent, to a variety of parties including, employees, clients and secured and unsecured creditors.

Some of the adverse effects on third parties are as follows:

Employees: In addition to losing their jobs, employees may lose superfund contributions, leave entitlements including long service leave and wages less amounts received from the federal government (where applicable).

Clients: Experience delays in the completion of their projects and the additional costs of having to engage new contractors and in time subcontractors. They may be subjected to claims from unpaid subcontractors and receive liquidated damages claims in respect of late completion from prospective tenants. For Government clients there are also political outfall costs for high profile insolvencies on public sector jobs.

Secured creditors: Even with the introduction of the new Personal Property Security Register (PPSR), there is a pecking order in terms of repayment the security held may not always fully meet the liabilities. Secured creditors such as banks, finance companies and the ATO do not always recoup their losses.

Subcontractors: Subcontractors are generally unsecured can be the

Corporate insolvency in the Australian construction sectorKey findings from ASIC insolvency data 2010 - 2011

1,862 the number of construction industry insolvencies in 2010/2011

23% the percentage of all Australian insolvencies that are in the construction sector

54% the percentage of Australian construction insolvencies that occur in NSW

$2.64 billion the estimated amount of money lost by creditors in construction related insolvencies annually.

The six most commonly reported reasons cited for corporate failure in the construction sector.1. Inadequate cash flow or high cash use2. Poor strategic management of business3. Poor financial control including lack of

records4. Poor economic conditions5. Trading losses6. Under capitalisation

Zero the most likely return to unsecured creditors in the event of a building company collapse

Robert Jochelson


Insolvency

most severely affected. Statistically they are likely to receive zero cents in the dollar in administration dividends for work completed or retentions held on completed work. When a new head contractor is engaged to complete the job they are unlikely to honour previous claims and may choose new subcontractors to complete the works. Non payment on just one major project can lead to the demise of a subcontractor and their livelihood.

Given the findings here, unsecured creditors such as subcontractors and suppliers would be well advised to invoke relevant State based Security of Payment legislation as early as possible without

waiting for additional months of payment claims to be ignored, hence limiting their potential losses.

Suppliers: Unfixed materials on site not paid for can generally be removed by the supplier but the logistics and proof of ownership can present difficulties. Reclaiming good fixed on site are much more problematic. While securities over goods can be set in place they are not always realisable.

Social considerations: As yet the social impact of construction industry insolvencies has not been quantified or measured. One can only imagine the devastation to those parties and their families who lose significant amounts

after these events. This is a matter considered so serious that there is currently government funded research being initiated for the impact to be assessed.

Almost 2,000 construction sector insolvencies in 2010/2011There were a total of 8,054 Initial external administrators reports lodged at ASIC between 1 July 2010 and 30 June 2011. Of these 1,862 companies (23.1%) related to companies in the construction sector making it the largest single category behind the composite category ‘Other (business & personal) services’. In the past 3 years ‘Construction’ was the largest overall category.

State by State analysis Figure 2 shows the distribution of the states in which companies entering external administration were registered. New South Wales exhibited the highest percentage of insolvency reports (54%) followed by Queensland (20%) and Victoria (17%).

Given that there are likely to be a similar number of construction firms in NSW and Victoria, this finding is puzzling. Some have commented that one likely cause is that the NSW WorkCover Authority is vigilant in winding up companies that do not pay their premiums, and that many of those wound up in NSW are quite small operations.

Australia has experienced a number of large and politically sensitive construction insolvencies in the past year and the ASIC statistics for 2010-2011 show that 10% of failed construction companies owed secured creditors over $1,000,000 and in 14% of the cases owed unsecured creditors over $1,000,000. It is worth noting that 24% of the failed companies had more than 25 unsecured creditors.

Why did these companies fail?Ask any failed contractor what went wrong and inevitably they will tell you it was not their fault. When filing a report, External Administrators are asked by ASIC to nominate the main causes for failure – multiple causes can be selected. Invariably, other than those who are caught out by the domino effect of an upstream contractor failing, the problem

FIGURE 1. Initial external administrators’ reports (1 July 2010 - 30 June 2011)

FIGURE 2. Initial external administrators’ reports by region (1 July 2010 - 30 June 2011)

58

95

150

153

212

213

244

246

448

474

537

611

864

1,862

1,887

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

Mining

Education & training

FIS–Other financial services

Professional, scientific & technical services

Information media & telecommunications

Agriculture, forestry & fishing

Rental, hiring & real estate services

Wholesale trade

Transport, postal & warehousing

Manufacturing

Other Industries

Accommodation & food services

Retail trade

Construction

Other (business & personal) services

Australian Capital Territory; 1%

New South Wales; 48%

Northern Territory; 0%

Queensland; 18%

South Australia; 4%

Tasmania; 1%

Victoria; 21%

Western Australia; 7%

Other (business & personal) services

Construction

Retail trade

Accommodation & food services

Other Industries

Manufacturing

Transport, postal & warehousing

Wholesale trade

Rental, hiring & real estate services

Agriculture, forestry & fishing

Information media & telecommunications

Professional, scientific & technical services

FIS – Other financial services

Education & training

Mining

➤


Insolvency

lies with management and lack of adequate financial controls (See Figure 3).

As financial assessors of companies for projects, Kingsway sometimes encounters companies that are unable to provide up to date financial records in a timely manner or produce management accounts that are obviously flawed. These serve as an initial warning sign to potential clients about possible financial problems that may ensue. In many instances clients do not take heed of the early warning signs because of time constraints in awarding contracts.

Other areas of concern most frequently indentified in our financial assessments are working capital deficiencies, related entity loans, trading losses, high levels of debt and poor management of receivables. It is not uncommon to find significant related entity loans as current assets on a balance sheet of a building contractor. Without a thorough examination of the related parties’ ability to repay the loans in the short term, one should always be sceptical of the quality of a contractors claimed working capital figures. These related parties may be involved in high risk property development projects which can easily come unstuck.

Was misconduct involved?ASIC collects data from External Administrators about any suspected breaches of the corporation’s law or breaches of directors’ duties both at the time of appointment and during their appointment.

During the period that external administrators were dealing with the 1862 administrations in the construction industry, they reported 3,422 possible instances of criminal misconduct or alleged breaches of civil obligations.

In the case of suspected breaches ASIC requests the administrators to investigate further and attempt to obtain documentary evidence of the misconduct. As one would imagine, obtaining this evidence is difficult. So while the number of breaches was high and companies had multiple breaches, there were only 182 reports filed where an external administrator was able to obtain documentary evidence of the breaches and recommended the case warranted further inquiry by ASIC. This is equivalent to just 10 % of the reports filed.

FIGURE 3. Nominated causes of company failure, construction (1 July 2010 – 30 June 2011)

In the construction sector the most common forms of possible pre-appointment criminal misconduct were breaches of:

1. Section 588G(3) – Insolvent trading 164 records

2. Sections 286 & 344(2) – Obligation to keep financial records 144 records

3. Section 184 – Good faith, use of position and use of information – Directors’, officers’ and employees’ duties 48 records

In the construction sector the most common forms of possible post-appointment criminal misconduct were breaches of:

1. Section 530B – Requirement to provide liquidator with company’s books 257 records

2. Sections 429, 438B & 475 – Report as to company’s affairs 252 records

3. Section 530A – Officers to help liquidator 217 records

In the construction sector the most common alleged breaches of civil obligations were:

1. Section 588G(1) – (2) – Insolvent trading 901 records

2. Sections 286 & 344(1) – Obligation to keep financial records 681 records

3. Section 180 – Care and diligence (339) Directors’ and officers’ duties 339 records

4. Section 181 – Good faith – Directors’ and officers’ duties 144 records

5. Section 182 – Use of position – Directors’, officer’s and employees’ duties 118 records

6. Section 183 – Use of information, Directors’, officers’ and employees’ duties 43 records

0 100 200 300 400 500 600 700 800 900

Natural disaster

DOCA failed

Industry restructuring

Fraud

Dispute among directors

Poor management of accounts receivable

Under capitalisation

Other

Trading losses

Poor economic conditions

Poor financial control including lack of records

Poor strategic management of business

Inadequate cash flow or high cash use Inadequate cash flow or

high cash use

Poor strategic management of business

Poor financial control including lack of records

Poor economic conditions

Trading losses

Other

Under capitalisation

Poor management of accounts receivable

Dispute among directors

Fraud

Industry restructuring

DOCA failed

Natural disaster

783

775

582

559

23

44

525

21

482

11

426

318

4


Insolvency

Monetary deficiencies and dividends The ASIC data available contains detailed tables showing the assets and monetary deficiencies at the date of the initial administrator’s report in 13 categories shown below. Not all of these are discussed in this article but are available in the ASIC data published on their website. i. Assetsii. Liabilitiesiii. Deficienciesiv. Unpaid wages

v. Unpaid annual leavevi. Unpaid pay in lieu of noticevii. Unpaid redundancyviii. Unpaid long service leaveix. Unpaid superx. Amount owed to secured creditorsxi. Amount of unpaid taxes and chargesxii. Amount owed to unsecured creditorsxiii. Estimated dividends to unsecured

creditors

In relation to the above categories we note the following regarding deficiencies to creditors.

Figure 4 shows the number of companies in the construction sector that had monetary deficiencies (i.e. assets less liabilities) in each value range. Two thirds had a deficiency of less than $500,000, with 14% having deficiencies of between $500,000 and $1 million, 19% had deficiencies of between $1 million and $10 million and 4% had deficiencies of over $10 million.

While the exact number cannot be calculated from this data, taking the number of insolvencies in each category and multiplying by the midpoint in each category (using an average of $15 million for the highest category) it can be estimated that the overall annual deficiency for insolvencies in the construction sector is $2,644,725,000. It is estimated that this amount is roughly evenly divided amongst secured and unsecured creditors.

Sadly, there is very seldom a return to unsecured creditors in the case of an insolvency. Figure 5 below shows that in 92% of cases, there is no return to unsecured creditors whatsoever.

We emphasise that unsecured creditors such as subcontractors and suppliers would be well advised to invoke relevant State based Security of Payment legislation early in the piece without waiting for additional months of payment claims to be ignored, hence limiting their losses.

The data use in the above analysis was source by Kingsway from the Australian Securities and Investments Commission (ASIC) from the following location: http://www.asic.gov.au/asic/asic.nsf/byheadline/Insolvency-statistics-Series-3.2?openDocument n

For more information contact: Robert Jochelson, Executive Director, Kingsway Financial Assessments Pty Ltd. 202, Level 2, 332 Oxford St, Bondi Junction NSW 2022Ph: +61 2 8305-0607 Fx: +61 2 9389-9336Email: [email protected]

FIGURE 5. Estimated cents is the dollar returned to unsecured creditors, construction insolvencies, (1 July 2010 - 30 June 2011)

FIGURE 4. Deficiencies in assets, construction, no. of reports (1 July 2010 - 30 June 2011)

300

559

333

264

291

49

66

0 100 200 300 400 500 600

$0–$50,000

$50,001–$250,000

$250,001–less than $500,000

$500,000–less than $1 million

$1 million–less than $5 million

$5 million–$10 million

Over $10 million Over $10 million

$5 million– $10 million

$1 million–less than $5 million

$500,000–less than $1 million

$250,001–less than $500,000

$50,001–$250,000

$0–$50,000

1,718

84

30

23

7

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

$0

Greater than 0 but less than 11 cents

11–20c

21–50c

51–100c 51–100c

21–50c

11–20c

Greater than 0 but less than

11 cents

$0


Insolvency

In Part One of this series (published last issue) we noted that the most common connection between an insolvency practitioner and a creditor is often the lodgment and processing of a proof of debt. That being the case, it is important that creditors and their advisors have a good working knowledge of:a. Why proofs of debt are requiredb. The admission and rejection of proofs

of debt for voting purposes and for dividend purposes, and

c. How creditors can go about appealing the rejection of a proof of debt In our previous article we dealt with

the reasons for lodging a proof of debt and the circumstances when they were

absolutely necessary. This month we deal with how proofs of debt are admitted and rejected.

The admission and rejection of proofs of debtThe processing of proofs of debt is an integral part of the day to day work of trustees and liquidators. Proofs may be are lodged by creditors throughout an insolvency administration to record their claims, participate in meetings of creditors, or to participate in dividends.

When a claim is lodged for participation in a meeting, or when a dividend is about to be paid, the trustee, the liquidator or the deed administrator must closely examine the proof of debt

to determine whether the debt has been sufficiently proved both as to existence and amount. This is generally done by examining the material attached to the proof of debt, and by cross referencing the claim to those books and records of the debtor which are available to the practitioner.

If there is sufficient evidence to satisfy the practitioner that the debt exists for the amount claimed, it will be admitted for the relevant purpose. If not, it may be rejected.

It is often the case that a creditor will lodge a proof of debt at the start of a meeting of creditors leaving the chairperson or president with only a limited time to examine the proof and any accompanying documents. In such cases most practitioners will admit a proof for voting purpose only, provided there is no obvious difficulty or dispute with the claim.

If the practitioner detects a problem with the proof lodged for voting purposes or believes that it requires further consideration, he or she has a number of options open to them and these will be reviewed in the next article.

Of course a practitioner dealing with the admittance of proofs of debt for dividend purposes has more time to consider the claim in detail and will generally require a higher level of proof before admission. Practitioners look particularly hard at disputed proofs and proofs from related parties.

In practice, if a claim is not proved to the satisfaction of the practitioner, he or she will generally seek better information from the creditor before rejecting it. This is achieved by the practitioner contacting the creditor and stating the areas which the practitioner believes need clarification and or requesting documents required to do so. Practitioners appreciate that many creditors will not be aware of what is

By Michael Peldan*

Michael Peldan

... if a claim is not proved to the satisfaction of the practitioner, he or she will generally seek better information from the creditor before rejecting it.

Proof of Debts – Part two


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Although practitioners will always attempt to assist it is not the role of

the practitioner to prove the debt for the creditor, it is the creditor’s claim

and they have that responsibility.

needed to prove a claim and will attempt to assist the creditor as far as possible.

If no better information is available or provided and the debt is ultimately not proven to their satisfaction, the practitioner must reject the claim in full or in part. The debt may only be rejected in part as some of debt may have been adequately proved.

Both the Bankruptcy Act and the Corporations Act contain provisions which mandate the way in which insolvency practitioners must advise claimants of a rejection or partial rejection of a claim. These provisions are very similar and generally apply in the case of companies to both liquidations and Deeds of Company Arrangement, and in the case of personal insolvencies to both bankruptcies and arrangements under Part X of the Act.

Both Acts require that formal written notice be given to the creditor when all or part of a claim is rejected.

Section 102(2) of the Bankruptcy Act states that “where the trustee rejects a proof of debt in whole or in part, he or she shall inform the creditor by whom it was lodged, in writing, of the grounds of the rejection” not later than 14 days after the date set to lodge proofs of debt in the notice declaring a dividend.

Regulation 5.6.54 of the Corporations Act has simpler wording and provides that within 7 days after the rejection of a claim, the liquidator must “notify the creditor of the grounds for that rejection in accordance with Form 537”. As stated

above it is usual that Deeds of Company Arrangement will also have these provisions included in the deed to deal with rejections of claims.

Both Acts require that the practitioner provide reasons or grounds for rejecting the claim. In practice the reasons must be cogent and adequately explained. Both Acts allow the creditor to seek a review of the practitioner’s decision to reject their claim. The review is carried out in the appropriate court, depending on the type of administration. That is the topic of our next article.

The notices are intended to provide a time period for the creditor to provide the necessary information to prove their debt (and if they do so within the time period the rejection notice will generally be withdrawn) or for the creditor to seek that review. If they do not seek the review, or provide information satisfactory to the practitioner within the time period they will not participate in that dividend.

Two more factors are important.Firstly, being rejected from one

dividend does not preclude the creditor from participating in the next dividend, if

they can provide the required information before that next dividend is paid. They are also entitled to receive a catch up dividend for the missed first dividend.

Secondly, even if they provide the necessary information after the end of the rejection period but before the dividend is paid, they are not automatically entitled to receive that dividend. The legislation allows the practitioner to treat the debt as rejected for the purposes of that particular dividend.

Obviously creditors will want to provide sufficient information to prove their debt when first requested. Although practitioners will always attempt to assist it is not the role of the practitioner to prove the debt for the creditor, it is the creditor’s claim and they have that responsibility. Remember, it is called PROOF of debt for a reason. n

*Micahel Peldan is a partner at Worrells Solvency and Forensic Accountants, Official Liquidators and Registered Trustees. Michael Peldan can be contacted on 07 3225 4370 or email: [email protected]. www.worrells.net.au


Factoring & Discounting

For over a decade until 2008 we saw annual growth rates of 20 percent or more. In 2008-09 new business peaked at $65 billion. Then the GFC struck. Like all sectors, the new business graph went down – below $60 billion. However, during 2011 we saw a renewed growth in receivables finance. Each quarter exceeded the previous. For the whole year new business is now back up over $61 billion.

Allowing for some member exits and some new entrants, there was an increase in new business of around four and a half percent relative to calendar year 2010. In the first two months of this year, many IFD members have reported a continuation of the pickup in business. There are different figures available for trends in general business lending. However, suffice to say that, in the current environment, many financiers would be envious of our growth rate. Our members provide finance to nearly 5,000 businesses in Australia and more in New Zealand.

Internationally factoring and discounting continues to grow and the total volume of trade conducted through factoring and discounting exceeded USD 2,190 trillion in 2010. Major markets with spectacular growth were China +130%, Taiwan +98%, Turkey +92%, Brazil +65% and Germany +35%.

Understandably, in the difficult economic times, many SMEs have been considering different ways to maintain cash flow and fund their businesses. In many ways the tightening of credit, along with the related focus on cash flow by

businesses, has increased the interest in receivables finance. Provided by a range of specialist financiers as well as banks, factoring and discounting is increasingly a well accepted option for business.

The biggest single change to the way we do business in Australia occurred earlier this year. The recognition and enshrining of super priority given to receivable financiers against retention of title holders in the newly implemented Personal Property Securities reform is a vital step towards acknowledging the relevance and significance of our industry to the business community. I expect that this fact alone will encourage a greater share of financing transactions being conducted as factoring and discounting by a growing number of new providers

Having a vibrant and growing industry is vital in ensuring that our share of the market continues to grow and the contribution our members deliver to businesses generally acknowledged

Throughout the year, our association, the institute for factors and discounters, has continued to provide a strong connection for players in this market. We are competitors but we do have many common interests and the IFD is an excellent forum to exchange views.

The IFD provides: representation to government; information to members; opportunities to meet and chat such as today’s luncheon; promotion of the industry; and, training programs for anyone interested in learning more about factoring and discounting.

On representation, the IFD in recent years has been particularly active in

ensuring the new personal properties securities regime has outcomes that benefit our industry as already mentioned.

Our members have undertaken a substantial amount of work to gear up for the new register of securities which commenced on 30 January this year. The teething problems are frustrating. However, once the initial problems are solved and systems settle down, we expect the new regime will assist the way we do business.

There have been other matters that have emerged. For example, there was a seemingly harmless change to one state’s stamp duty laws. Without the ears of the industry and the IFD lobbying we would have been up for a substantial impost.

Other emerging matters relate to privacy law amendments and credit reporting reforms. The IFD is active in these reforms to ensure our industry’s interests are maintained.

As always, we need to be constantly aware of matters which may affect us. The IFD is an integral part of that.

The factoring and discounting courses were established in 2005 and are conducted by the Australian Institute of Credit Management – the AICM.

The courses can be undertaken as a discreet unit, or form part of the accreditation for the diploma of credit management. They can be taken as a two-day face-to-face program or on-line.

In the six years since inception we have had over 400 students complete the courses.

Each year we select the most successful students of the year, based

Institute for Factors and Discounters of Australia and New Zealand/AICM Student of the Year AwardHooman Zahrai, Chairman of the Institute for Factors and Discounters of Australia and New Zealand announed the IFD/AICM Student of the Year and gave an overview of industry trends, challenges and outlook at the Annual Luncheon for the Institute for Factors and Discounters of Australia and New Zealand on 20 March 2012.


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on course work and written assignments. This year the award was closely contested with three students presenting exceptional standards of work. The AICM have advised us that the standard is increasing – particularly over the last 2 years. The bulk of students achieved 70% or greater.

There were numerous other students who were in the running for an award.

However, it was these three students who best presented their material, that is, in simple language that non-industry people could understand.

Firstly, I shall mention the other student who was not able to be here but is still warmly congratulated. That is Kristiffer Nini, from Oxford Funding. Congratulations to Kris for the IFD Outstanding Achievement Award. Oxford

Funding is arranging for a presentation to him. Secondly, I call upon Robert Collins from bank of Queensland and congratulate him for attaining the IFD Outstanding Achievement Award.

Finally, it gives me great pleasure to call upon Rendy Sadikin from Scottish Pacific Benchmark and congratulate him for attaining the top position – IFD Student of the Year. n

Sam Kekovich (guest speaker), Rendy Sadikin (Scottish Pacific Benchmark – IFD/AICM Student of the Year), Robert Collins (Bank of Queensland – IFD Outstanding Achievement Award), Hooman Zahrai, Chairman IFD.


Legal Recoveries

To make good decisions about pursuing legal action to recover debt, credit professionals need to know likely costs in advance.

An automatic fee calculator gives credit professionals immediate access to accurate estimates of fees without even having to contact their service provider. Credit professionals using tools such as automatic fee calculators save themselves time and money, and are equipped to make better decisions about their legal recovery actions.

When considering debt recovery legal action, it is essential for credit professionals to perform a ‘cost benefit’ analysis in order to make effective decisions about undertaking and progressing with the legal process. Accurate cost information is required to ensure that well informed decisions can be made at each step of the way.

An automated fee calculator enables credit professionals to take the guesswork out of the process and determine the likely costs of pursuing legal action quickly and easily, at their convenience.

The following are 3 practical advantages of the automated fee calculator that smart credit professionals are taking advantage of to achieve positive debt recovery results:

Convenience – 24/7 online access to fee clarity An automated fee calculator makes it possible for clients to enter the basic details of their debt (such as the debt amount and number of debtors) and automatically generate an estimate of fees to commence legal action, obtain judgement and pursue a range of enforcement options.

The key variable with the automated fee calculator is that clients instantaneously receive a comprehensive break down of costs based on their particular retainer agreement. Being able to access this information on demand, without having to contact the service provider, is convenient, saves time and increases efficiency.

Efficiency – keep the momentum in your debt recovery legal actions Effective recovery action is about creating and maintaining pressure on the debtor.

Momentum creates pressure, and this applies throughout the whole legal recovery process. The reality is, the faster the turn around on steps, the higher the degree of pressure and the more effective the recovery action will be.

Having an automated fee calculator at your fingertips means that credit professionals can make prompt, informed decisions about their legal actions without chasing up their service provider at each step of the process to obtain estimates of fees.

Overcoming delays between requesting and obtaining estimates also assists to maintain momentum and resolve legal recovery claims in a timely way.

Costs savings – Put the accuracy back into your legal provider’s costsLegal debt recovery should not be about hidden surprises, nor a long drawn out process which increases costs. The last thing credit professionals want when chasing up a debt is to end up with unexpected costs on top of what the debtor already owes them.

The automated fee calculator is a useful tool for credit professionals to stay on top of the costs at each step of their legal debt recovery action and monitor their expenditure. This ensures that accurate information about costs is available in advance, and reduces the risk of the costs outweighing the benefit of undertaking legal recovery action.

ConclusionReliable information about future legal costs is essential to allow credit professionals to make effective, informed decisions about the legal recovery process.

The technology is out there to allow credit professionals to gain instant access to reliable fee estimates on demand. By utilising a tool such as an automatic fee calculator, credit professionals can instantaneously access reliable fee estimates at their convenience. This, in turn, promotes greater transparency and saves both time and money. n

*Karl Hill is Managing Director, Results Legal Solutions. Email: [email protected]

Automatic fee calculators– debt recovery tools that add up

By Karl Hill*

Karl Hill

A good automatic fee calculator will:

z Have a limited number of variables for the credit professional to complete.

z Calculate fees for all uncontested steps in the legal process (including enforcement action) at the press of one button.

z Provide fee estimates for multiple state court jurisdictions.

z Provide an easy to print summary for future reference.

z Calculate fee estimates based upon their particular retainer agreement with the supplier.

z Make the credit professional’s life easier.

Read more online

Some recent analysis & statistics online

Consumer Credit Demand Index (Jan - Mar 2012) ConsumercreditdemandstillsoftbutmortgageenquiriesrisefirsttimesinceGFC

Business Credit Demand Index (Jan - Mar 2012) Mining states boom while SMEs feel pain

Claims per industry specific (Feb 2012) Grossdebtforclaimsreceivedfrom01/02/2012to29/02/2012

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Some recent forum posts online

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Collections

should be no reference to the impact of legal proceedings.

The harassment issue has been a part of the landscape for many years. It was certainly covered by most state legislation before it was covered by the Trade Practices Act (now the Competition and Consumer Act 2010).

Basically, the point has been reached where, if a debtor states “don’t ring me again”, then you must cease calling.

Any credit manager who allows letters or notices which are false and misleading or who encourages, allows or condones harassment, faces the risk of Federal Court act against not only his company but also against himself personally.

The impact of this for most credit managers will be significant and it will require a major rethink in how their internal collections are handled. This is precisely the outcome which the ACCC intended.

I don’t see that the ultimate impact of this will be a bad thing. It will stamp out unsavory practices and it will require the credit and collections function to be handled more professionally and with a great deal more thought.

Gone are the days of the heavy-handed receivables operator and there will now be a serious doubt about the effectiveness of predictive dialing-call centre collections. Simply calling the debtor will cease to be effective because consumer groups will get the message out that all you need do is say “don’t call me again”: Good-bye”.

The futureCollections, both internally and out-sourced, is going to become more expen-sive, because there can be effectively no real threat and the entire approach now must be based on effective communica-tion. This takes time and time is money.

Collections staff will need to be more empathetic, will need better training and will accordingly make much less calls per hour. I have always believed in this communicative approach but now every credit manager and every collection agency will need to adopt the same approach.

In order to off-set the additional collection cost and to move the balance back in favour of the creditor, companies will now need to look much more seriously at their trading terms.

We have found at Prushka that SME’s are keen to set up effective trading terms but that larger clients which deal in big volume but small quantum debts are often reluctant to, possibly due to a fear of some perceived consumer backlash.

Trading terms which are becoming essential are those which incorporate into the contract with the customer, the legal right to add collection costs to the debt, when an account is outstanding beyond a certain stage and to then provide that in the event where the account is outsourced for collection, full indemnity legal costs are to be added to it and commission chargeable by a collection agency are to also be added to it.

The trading terms must form part of the contract between the supplier and the customer and an effective place to now provide this is on the supplier’s website.

For example, before signing up a new customer, notification will be sent specifying that “the trading terms which govern the relationship between our business and yourself are as detailed on www.supplier.com.au”.

By incorporating these provisions, you have provided a real penalty to slow payers. In addition, it paves the way for taking legal action against non-payers who respond with “don’t call me anymore”. The only way to handle these people is to sue them and at least by adding in collection costs and indemnity legal costs, the quantum will be significantly increased.

This will send the powerful message to such people that they can use the “don’t harass me” line with others but that it is ineffective with you. n

*Roger Mendelson is CEO of Prushka Fast Debt Recovery and principal of Mendelsons Lawyers and is the author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival, both published by New Holland Publishers.

WARNING TO CREDIT MANAGERSThe rules have changed….forever

By Roger Mendelson*

Roger Mendelson

There have been two significant events of late, which herald a hardening of attitude by regulatory bodies.

The first one concerns a consent order taken out by the ACCC against a lawyer who was acting on behalf of a number of video shops (ACCC –v- Sampson).

The other concerns news that legal proceedings are to be taken out by the ACCC against two collection agencies for “harassment”. These actions are intended to convey the message to everyone involved in the credit and collections industry that the rules have changed.

Credit managers need to be aware of this paradigm shift and to develop strategies to deal with it.

What you can’t doIn summary, it is unwise to send any letter or notice which could be construed as being “false and misleading”. To be safe, all that can really be said is: “you owe $x. If you dispute this claim, please contact us. If you don’t dispute the claim, please pay it by a specified date”.

Threats about legal action or the impact of legal action should now be avoided unless there is a clear intention to sue. In that case, the letter can state that legal action will be forthcoming but there


HumanResources

As the Australian employment market often heavily follows the lead of global trends one only has to take a look at the US economy to find that 2% salary increases (if at all) has been the norm in some industry sectors. The US 2012 EAA National Wage and Salary Survey data for example has indicated that Admin roles experienced a 2% increase over the past twelve months.

Moving from the US to Europe, The Kienbaum Management Consultants report (Kienbaum Forecast for Salary Increases 2012) which provides employment and salary data for Western Europe indicates a similar trend with 3 - 4 % increases being the market average with the UK recording the highest shift at 4%.

Clearly, whilst there are signs of a slow recovery in Europe, companies are still moving forward with caution.

That being said, as a lack of qualified personnel in some market sectors continues across Europe, forward thinking organisations are recognising the need to adopt more variable pay structures. In order to attract and retain key employees, organisations are offering attractive performance based incentives to improve overall remuneration packages. In contrast to Western Europe, Russia and Bulgaria are recording over 6% salary increases in line with their inflation rates.

Bringing the trends back home, Michael Page has completed a general market salary survey in 2011/12 which indicates that 69% of companies will increase salaries based on company and employee performance in the range of 2 - 6% with the majority falling in the 3-4% range in line with global trends.

Being even more specific to the Credit industry the following data has emerged from our recent Credit Recruitment Salary survey across a range of industries:

z A steady decline in organisational staffing growth in the credit area shifting from 26% of companies in 2010 planning to add new employees to 23% in 2011 and 18% in 2012

z 73% of respondents indicating that their staffing levels will stay the same compared to 66% in 2011.

z Employee and management salary increase expectations declining over the past 3 years with only 71% expecting to receive an increase of some kind compared to 78% in 2011.

z Within that context, 65% of those employees are only looking at CPI increases compared to 56% in 2011. Interestingly 22% are expecting below CPI increases compared to 10% in 2011.

What does all that actually mean? In line with the global economy we are seeing a conservative and very much a wait and see approach to salary increases.

However, In contrast to the general market indicators, there are several roles that have defied the trend and have recorded increases in the past 12 months including:

z Credit Officer salaries jumping from an average of $50K in 2011 to $55K in 2012,

z Credit Controller averages increasing from $53K in 2011 to $59K this year

z Collections moving from a $54k to $58K average.

z Credit Support roles enjoying an increase from $47K to $49.5K on average.

So what does all this mean to your organisation? The challenge for every manager is to attract and retain high quality productive individuals who feel valued and are remunerated appropriately. To that end the focus for international and local organisations is to develop a remuneration policy that is in line with the overall company strategy and supports the achievement of sustainable profitability. Happy Reviewing!

For full Credit Recruitment Salary Survey 2012 Results please contact Liana on 8817 0100 or email [email protected] n

*Liana Gorman is Managing Director, Credit Recruitment. Ph: (02) 9239 1700.

Market salary mattersBy Liana Gorman*

Liana Gorman

… In contrast to the general market indicators, there are several roles that have defied the trend and have recorded increases in the past 12 months …

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


queensland

President’s reportWell what can I say, February and March has been busy, busy and more busy. We have had 2 successful Network Nights. We had a format change that has seen us introduce 2 speakers with complimentary topics of 20 – 25 minutes each. Our feedback has been very positive to the change. We also ran a State based ‘Back to Basics’ ∏ day sessions. The participants found it was great to review and also refocus knowledge.

We also saw the elevation of Brain Kay to Fellow (FICM), which was presented at the Network Night. The best part is he was totally unaware of the elevation, until he heard the reference ‘This Credit Manager used to work in Women’s Clothing, he...’. Feel free to ask Brian about his clothing style.

The year though is moving very rapidly and we are already making plans with Dun & Bradstreet for this years Qld YCPA function, now only a few months away. The Queensland Council would like to encourage all our members who are under 30 to come forward and have a go. We would also encourage supervisors and managers to put team members forward. It is a great opportunity to grow skills.

By the time that you read this article, you will all be in the swing of getting ready for the End of Financial Year. You would have had Easter and Anzac days, with Annual Leave a distant memory. Know that you are not alone, come to the Network Nights and get a hug from your understanding councillors and fellow members. Your Institute supports you. Chins Up.

– David Maczek, President QLD Division

Events2012 saw the Qld Council try a different approach to Credit Focus Network Nights with the introduction of two presenters per session presenting short concise and focused information on poignant subjects.

In February presenters were David Maczek, Chief Operating Officer Debtors Software Solutions and Brian Kay, National Accounts Receivable Manager Akzo Nobel Pty Ltd. David’s presentation made a dry subject entertaining and extremely interesting. He covered Skip Tracing and gave us all hints and tips on how to track “lost” debtors down whilst Brian’s presentation on Data Integrity made us all think outside of the narrow attitude most of us have about why we need to ensure that our databases are up to date and accurate.

We were then joined in March by Shane Wilson, Compliance Manager Qld Building Services Authority and Daniel Hains from Vincents Chartered Accountants. The Qld Council sent an invitation to all Building Industry Credit Bureau members to attend the session as Shane gave us all an insight into the QBSA, its services and how they can assist suppliers to the building industry. Daniel’s presentation entitled “Data Mining”

had us all wondering what he was going to present on. He covered forensic investigations and enlightened us on how even after you delete something from your computer system it can still be found! As well as an example of the secret programs that can be run through accounting systems to highlight where fraud may be occurring within our businesses.

Our next focus night will be held with Peter Mills of Macpherson & Kelley Lawyers and Karl Hill of Results Legal we are sure to have an interesting and information evening.

The next social event will be at Victoria Park Golf Complex followed by a Strike Bowling event on 21st June.

We look forward to seeing you there.– Carla Seirlis, VP QLD

Spotlight on a Senior Credit Manager Michael Peet, AICM CCEINTERVIEWED BY CARLA SEIRLIS

Q – What was your first job? A – After a qualifying examination I was hired as a Junior Clerk (at 15 years of age) in the Department of Government Transport in Sydney – essentially the Sydney Government buses.

Q – How many years in Credit? A – 35 years

Q – What changes have you seen?A – I’ve got older! The biggest change is the globalisation of credit and movement of many larger organisations to establish credit and billing centres in Countries where government’s offer incentives and staff are less expensive to employ.

Q – How has technology changed? A – Remember well the monthly aged trial balance when first into credit with what was then Concrete Industries (Monier) Ltd in Villawood

February CNN – QLD Sponsor Morgan Elliott of Vincents Chartered Accountants.

February CNN – Presenters Brian Kay and David Maczek.



queensland

Sydney. I remember all the notes written down alongside the balances, the result of calls to customers and action being taken being copied by hand over onto next month’s printout. So now we are into the data imaging, electronic delivery and payment of accounts and even onto sms collection notices. Worldwide we have seen thousands of software programs written and sold to give Credit Executives and their teams more efficient control over customer account management. Risk assessment has become an art form with electronic assessment possible within a minute or two using decision tree matrixes all intertwined with the mathematical accuracy of computerisation and links to various databases.

Q – Where will it head in the future, Commercial and Consumer? A – I’ll keep my words to the Commercial field recognising the distinct challenges in Consumer credit. I see an increase in the use of computer models and programs that will automatically manage the customer. This directly leads to much less manual involvement in all aspects of customer AR management. I believe on an international scale that multinational customers will be managed in Shared Service Centres as the tyranny of distance no longer has a bearing, and the cost of communication shrinks. Cost minimisation drives this and it is customer centric in design having a single unified approach to billing, query handling, payment allocation and collections.

Q – What are the advantages of being an AICM member? A – I see credit management as a vocation. Regardless of our field of endeavour, there is a professional need to stay aware and up to date on what influences our own judgment, what influences our employers, and what impacts our customers. All of us have something to learn from others. The AICM is our best vehicle for building your value to your employer, and giving yourself the best chance of progressing into ever more senior roles. For people content to stay with the same employer for many years, internal progression relies on building on your knowledge. That includes the building of your network of colleagues who share a desire to protect their businesses from debt loss, while still capitalising on sales growth opportunities.

Q – What are your thoughts on the advantages of being a Certified Credit Executive (CCE)?A – This qualification is recognised around the world. It says this person has specialist knowledge and can help organisations grow through responsible risk management. I read very recently where the value of being a CCE in the USA is seen as adding at least $20,000/yr onto the salary package. Worldwide we have seen a contraction of credit managers. As this pool of specialists decreases, the complexity of the role that the credit manager fulfils becomes ever more challenging. We need to prepare ourselves for the world of tomorrow and structured

learning programs, culminating in recognition as a CCE, says you are ready to rise to the challenge.

Q – The AICM have Member, Fellow and Life memberships? Do you aspire to achieve either or both the FICM or LICM? What would it mean to you?A – Ambition, energy, good health, education and hard work can take you far, so it’s only natural that as you gain kudos with your employer you hope to plough some of that success back into your professional association, and have your association recognise that. Look around at those who hold the distinction of life membership and there you find people with a wealth of experience, and a preparedness to share it. Life membership for me reflects the pinnacle achievement in credit management as recognised by our own association. I am still serving my apprenticeship but I am getting there.

Q – Is there anything else that you would like to mention?A – I feel it is a shame that credit is not more highly positioned in many organisations. In very few businesses is credit management seen as a distinct area of business management having equal alignment to both sales and finance. Invariably in today’s world credit people report upwardly to finance. I expect in future years this might change especially with the move of larger businesses towards Shared Service Centres. This brings into place new lead positions for those with diverse people, technology and process skills. Perhaps with this gradual shift we will see credit more often represented at a Board level.

Q – What is the best experience you have had in credit? Why?I have had my share of interesting experiences, including the truck driver customer who decided to show me his new revolver on being advised by the service department that his account was stopped. That turned out well….well I am still around, but more of that for another time. By far and above the best experience is sharing the fun with employees at Annual ‘Off Site’ Conferences. These were special times to celebrate what had been achieved, and recognise those who rose to be the best of the best. These provide me with wonderful memories, truly unforgettable, and amazing to witness what unfolded in the workplace in the months following such events in terms of camaraderie and cooperation. And that just led to even better credit results (and higher incentive payments for the whole team). Few organisations in today’s world of cost trimming see the immense value of these events. I am witness to know their true value.

February CNN – QLD Sponsors Orla Scolard & Nardene Smith of AccountAbility and Brooke Cox of Results Legal.

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

for 2012

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.



new south wales

NSW President’s reportMotivating your team has never been easier thanks to the work of your councillors and the AICM. Reward your whole team by sending them to one of the regular networking events such as: the Youth Network Night held at Strike Bowling in April, The Credit Manager panel being held in May, or the Trivia night coming up in June. Also, the whole team can get recognised for their excellence by taking part in the Credit Team of the Year program. Motivate your up and comers by encouraging them to enter the Young Credit Professional of the Year program. Educate yourself and senior members of your team by attending seminars such as the recent PPS seminars which also help you maintain Certified Credit Executive status or obtain the eligibility requirements to obtain CCE status. The above is made possible by a small handful of credit managers who are passionate about the credit industry, but we need your help. All councillors have extremely busy

The Australian Institute of Credit Management

New South Wales welcomes the following organisations as our sponsors for 2012



work and personal lives but are able to meet more than the minimum involvement being attendance at Monthly meetings and assisting on various portfolios/projects. As we do not have enough councillors many hold more than one portfolio which is not sustainable so we need your help. If you are passionate about credit and want to be part of the team developing our industry please contact myself or any of the councillors who can be reached through the national office. Your Council is currently made up of Grant Morris (Director), Nick Pilavidis (President & Professional Development), Vanessa Graydon (Vice President, Publications and Credit Team of the Year), Arthur Tchetchenian (Treasurer and CCE), Susan Day (Parramatta Functions), Sam Pearlman (City Functions), Gregg Odlum (YCP and Youth Development), Christina Aleksoska (YCP and Youth Development), Ian Smallman (Membership) and Meg Bowen (visiting councillor from Victoria/Tasmania Division).

– Nick Pilavidis, President NSW Division

Youth Network NightThe 2012 Youth Network Night was a huge success with 29 people in attendance. To get us warmed up and communicating, the night started with a short game of introduction bingo which required each person to find out small facts about others in the room. Once the group was well into talking it was time for some friendly competition… Laser Tag! After 20 minutes of running around like maniacs, Undertaker (aka Sam Hickey) took out first place earning himself a $100 gift card thanks to Kemps Petersons. After building up an appetite we all moved across for bowling, pizza and drinks. Taking out the top scoring bowler was Peter Dymond winning a $100 gift card- thanks again to Kemps Petersons for putting up these prizes for the top scorers on the night. Second and third places in each activity also went away with a prize thanks to Credit Collection Services Group and the first to complete the bingo game received a tote bag full of goodies thanks to Trace Personnel.

This night was put on to encourage those younger members of the AICM to build relationships and also promote the Young Credit Professional Award for 2012 sponsored by D&B. We look forward to more of these style events in the future. We could not have run such a successful night without the valuable support of our Event Sponsors Dun and Bradstreet and Credit Recruitment – thanks for contributing financially to the running of the night.

– Gregg Odlum MICMYouth Development

EAT The Industry

Pan Fried Scallops with Mesculan Salad (serves 2)Anthony Walker, Owner/Manager, Bank of Queensland (BOQ) Penrith

z 16 fresh scallops (row off) z 4 tablespoons of butter z 1 teaspoon chopped fresh

garlic z 2 tablespoons lemon juice

z 1 tablespoon olive oil z ½ punnet cherry tomatos z mixed mesculan leaves z 1 teaspoon chopped fresh dill z herb infused olive oil to drizzle

Method:Using a large flat based fry pan, heat till searing place scallops in (not to close together as they will stew, if your pan is not large enough, cook in two batches). Cook for 1-2 minutes, turn over and repeat. Then add oil, butter and garlic, remove from heat once butter has melted, moving pan around to coat the scallops (do not let the garlic burn).

On two serving plates arrange the leaves, place scallops on top, sprinkle cherry tomatoes and dill, and drizzle with olive and lemon to serve.

To contribute to this column please send submissions to [email protected]

Ingredients:



south australia

President’s ReportThe last few months have been a busy time for the South Australian Division with our monthly Credit Focus Workshops, a Court mini-series, an update seminar on the PPS, and a social networking evening at the Oriental Hotel. In addition to this we held a successful one day seminar at Mount Gambier for South East credit personnel.

It is now time for 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 at the Gold Coast in October. The winner of this year’s State YCP Award will be announced at the July Quarterly Dinner. We encourage all young credit professionals to become involved as members as they are the future of the Institute and the credit profession.

The second half of 2012 will continue to be busy for the SA Division as our Divisional Council continues to work hard in programming quality workshops and functions.

We encourage our members to be actively involved in the institute by attending our education learning sessions and our social networking evenings. We are always looking to attract new members and any assistance given to us is greatly appreciated.

– Trevor Goodwin , President, S.A. Division

Breakfast networking meeting – 29th February, 2012The AICM SA division held their first function for 2012 at the picturesque Pavilion on the Park. What a beautiful morning and start to the day! Mr John McArdle, General Manager Corporate Affairs, Adelaide & Parafield Airports, gave us a full insight into the new look Adelaide Airport. Currently employing around 6,000 people we began to understand the importance of our ever-changing airport.

Opening with some fascinating stories about ‘behind the scenes’ of

John McArdie addressing the Breakfast networking meeting.

Multi-level carpark development.

James Devonish (left) with new member John Madsen.

the Adelaide and Parafield Airports, followed by facts and figures of the monies lost and made in comparison to the eastern states was something that grabbed everyone’s attention.

The development of the new multi-level car park (pictured above) and the future expansion is just around the corner.

John was excellent in keeping the members and guests fascinated with his own unique sense of humour. He would certainly be worth hearing again to keep our ‘credit professionals’ abreast of this exciting economic development which will impact on South Australia in the years to come.

During the course of the morning, Membership Chairperson James Devonish presented new member Mr John Madsen of Madsen Rowley Lawyers with his membership certificate.

Regional seminar a hit with the South East business communityRecognising its on-going responsibility to regional centres, the South Australian Division recently held its second full day seminar, this time in Mount Gambier in the South East of the state, and which was greatly appreciated by the local business community. ➤



south australia

The program was comprehensive and the speakers each experts in their field. There was an excellent selection of topics on offer which were:

– The Credit Assessment Process – Who Are You Really Dealing With presented by Trevor Goodwin SA AICM State President & Information Manager NCI (Brokers) Pty Ltd.

– Making the Most of your Credit Documentation & Legal Issues presented by James Neate AICM National Director & Partner Lynch Meyer Lawyers.

– What are the warning signs your debtor is in trouble? presented by Trevor Goodwin.

– Achieve Greater Success through Excellent Communication Skills presented by Jane Calleja Learning & Development Manager NCI (Brokers) Pty Ltd.

– Debt Collection – Take Action before it’s too Late presented by Gail Crowder AICM SA Councillor & Business Development Manager National Credit Management Ltd.

– Maximise Returns through best use of the Legal System presented by James Neate.

– Insolvency – What you need to know presented by Des Munro AICM SA Treasurer & Director, BRI Ferrier.

The seminar was well received by those in attendance who clearly enjoyed an opportunity to learn more about the laws and regulations which govern the credit industry.

Of particular interest was the presentation which included the PPSR as there are still a lot of questions yet to be answered.

The feedback from the attendees was very positive; there was a steady flow of questions during each of the presentations and all speakers provided a comprehensive set of notes.

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

It was also mentioned by many business people in attendance that they would be keen to attend another seminar at a later date and would be pleased to recommend us to others.

We would like to thank all our Guest Speakers for their time and the excellent presentations they provided on the day.

Successful events such as this don’t just ‘happen’ - there was a lot of work before, during and after the event and the Division Council would like to thank all those people involved in the planning and realisation of the seminar.

John Sigal MICMJohn Sigal retires, after 13 years, from his role as National Credit and Funds Manager of the Pernod-Ricard Group, one of the country’s largest wine and liquor distributors, and with more than 30 years continuous membership of the AICM behind him.

He has an impressive work history, starting in Adelaide with General Electric Kirby Appliances where he took on the role of State Accountant; he married in 1972 and moved to Alice Springs as Financial Accountant for Connair (NT Airlines). His career in credit commenced in 1980 when he took on the role of South Australian Credit Manager for Carrier Air-conditioning. A promotion saw him re-locate to Brisbane as Regional Credit Manager Queensland, Northern Territory and New Guinea from where a further promotion to National Credit Manager took him to Sydney.

In 1985 John was in a position to return to Adelaide where he commenced as National Credit Manager for Solomon’s Carpets which developed into the role of National Franchise Manager with responsibility for 135 stores across the country.

Still in Adelaide John moved on to Berri Ltd as National Credit Manager for eight years followed by another two years at Berri’s head office in Melbourne.

Regional Seminar Mt Gambier.Regional Seminar Mt Gambier.



south australia

Then it was back to Adelaide in 1999 where he took up the position with Pernod-Ricard from which he will retire in June.

In 30 years John has seen many changes in the management and control of credit, credit departments and credit professionals. Many of the larger national/multi-national companies have centralised their credit operations. He has seen credit management develop into a true ‘profession’ with an increasing number of tertiary qualified people and he observes that these qualifications are necessary if credit professionals want to move upward – there is a lot more data available if you want to be sure of making the correct decision and knowing how to read, absorb and analyse that data is essential. John points to the most recent big change in the industry, the Personal Property Securities Act, as a prime example.

John says “Credit professionals will need to continue to enhance their all-round business skills and knowledge as senior management will have a greater expectation for them to not only manage the risk, but to have a greater understanding of their company’s commercial needs. They will have to be proactive in adapting and working with change – particularly in the area of B2B technology.”

His advice to those considering a career in credit is to obtain a tertiary qualification, preferably finance related, be proactive in your professional development and enhance your people and communication skills. Be an active team member and always endeavour to support you company and team by looking at ways to introduce positive improvements. Most importantly, Know Your Customer – strive to gain as much information as you can to build both an initial and on-going customer profile that will best place you in making credit decisions.

It is clear from his 30 years continuous membership that John has a high regard for the AICM and firmly believes that it has a lot to offer through education and training programs from the training of credit and collection staff just starting out, providing refresher courses, training in new legislation such as the PPSR and the Privacy Act etc. and through its on-line tertiary programs. He sees a future where programs might be widened to include commercial needs such as people management skills, conflict management and more. He says “I have had a National Credit Manager’s title for nearly 30 years and have always encouraged my staff to join the AICM or, at the very least, attend various training courses.”

John has many fond memories of his commercial life; he has worked with some great firms and wonderful people. He was Employee of the Year for Berri Ltd in 1994 – not bad when you consider the workforce was around 1300 people – and has chaired the forum of National Credit Managers in the Australian Liquor Industry for the past ten years. He is proud of people that he has worked with and provided guidance to, who have, themselves, moved on to National Credit Management roles.

Every credit manager has a chest full of war stories and John has this one to share.

Approx 18 years ago Berri Ltd was owed significant monies from an expat living in Cambodia. He had built a hotel and grocery supermarket and paid cash up front for 12 months prior to be granted credit. He defaulted on the first shipment – also at the same time he defaulted on debts owed to a number of the major grocery and soft drink suppliers.

At this time Cambodia was still struggling under the Pol Pot regime and this fellow had built a small army to protect himself.

This was quite personal to me as I had many previous discussions with this fellow.

Through various contacts I had contacted in Vietnam a member of an elite American Green Beret unit who with a comrade, and at a price (50% of debt if collected), would cross the border and collect these owed monies.

All was a green light with the exception of the Board of Directors who asked me to pull out at the last minute.

John, congratulations on a long and distinguished credit career and enjoy your well earned retirement.

Wade Bekesi of new SA sponsor Mercantile Collection Services.Trevor Goodwin presents at Mt Gambier Seminar.

The Australian Institute of Credit Management South Australia welcomes

the following organisations as our sponsors for 2012





victoria/tasmania

Delegates at the March Network meeting.

March Network presenter Jason McCutcheon

Network Meeting March 2012The topic for the March Network meeting was The Art of Negotiation.

Clelia McCutcheon and Jason McCutcheon from Biscom Training gave an informative presentation to over 20 delegates on what is a most important skill that we all use on a daily basis.

The presentation posed the questions; What is your Style? and included a Red Versus Blue challenge with a prize awarded to the ultimate winners.

Delegates found the session both interesting and fun and Professional Development chairman, Lou Caldararo expressed his appreciation to Clelia and Jason on behalf of AICM.

Golf DayThe Victoria/Tasmania Division ran another successful golf day on Friday 20th April, 2012.

The golf day was a ‘sell out’ well before the day itself. This was an opportunity to network with fellow Credit Professionals, their Guests and Division Councillors in the beautiful surroundings of Southern Golf Club

The event was a Best Ball Ambrose format with a shotgun start to allow players of all standards to mix and play together regardless of playing ability.

In addition to a Winning Team Prize, there was a Putting Competition between the 9th and 10th holes, and prizes for: Nearest to the Pin;

Longest Drive for Ladies and Gentlemen; Straightest Drive; and of course, the NAGA Award!

A $10,000 hole in one prize was also on offer but failed to go off.A Sit down Dinner and Trophies & Prizes Presentation completed a

perfect day.

Another Vic/Tas Division golf day – ‘full house’.

Team strategy talk

Pre golf refreshments.



Golf team.

Dinner presentation.

victoria/tasmania

$10,000 shot – $0 result.

Golf team.

Golf team.

No pressure from the team mates!

‘Air swing’ on the green?

The Australian Institute of Credit Management Victoria/Tasmania welcomes

the following organisations as our sponsors for 2012





western australia/nt

Economic breakfast.

Economic breakfast.

Economic breakfast.

President’s reportWell here we are, smack bang into the last quarter of another fiscal year. In credit management this is not a time of year for the feint hearted. It feels like the eyes of the world are watching our every move. Well not exactly, but in our respective businesses there is always that “buzz” that comes with the 30th June.

Over the years, in the world of credit management, I have noticed a distinct pattern emerge that can be best described by answering the following questions: Is it a time of year to celebrate? or is it a time of year to dread?

Only you have the answers….I wonder what they are!Perhaps an article by Albert E.N. Gray may be of assistance. It is called

‘The Common Denominator of Success’ which explores the relationships between purpose, habits and success. Here are a couple of excerpts:

“The common denominator of success-the secret of success of every person who has ever been successful-lies in the fact that they formed the habit of doing things that failures don’t like to do”. And “ If they don’t like to do these things, then why do they do them? Because by doing things they don’t like to do, they can accomplish the things they want to accomplish. Successful people are influenced by the desire for pleasing results. Failures are influenced by the desire for pleasing methods and are inclined to be satisfied with such results as can be obtained by doing things they like to do”.

Take a moment to reflect on yourself and your role and I am sure you will come up with an appropriate answer to the questions raised earlier.

Lastly, I had the opportunity to read our 2011 YCP Kristy Shrigley’s article before it went to press for this edition and I was impressed. Apart from challenging young individuals to become involved in the 2012 YCPA she has challenged employers to assist their younger employees to become involved. What better way to “engage” with your staff. The Institute has streamlined the process and it is now even easier for our young professionals to apply…just visit the AICM website.

– Colin Phillis - MICM, President – WA Division

Functions and Seminars

ECONOMIC BREAKFAST What is the risk of a double-dip global recession in 2012, and if it does happen, will it either trigger off and be the cause of another credit crunch?

And 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?

If the US economy improves in 2012, will it unleash a 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.

Every one enjoyed the seminar and the questions above were answered by our speaker Alan Langford – Chief Economist for Bankwest.

TELEPHONE COLLECTION TECHNIQUESWorkshop Overview:This course is an interactive half-day workshop that provides

participants with practical and effective techniques for improving their communication skills with a focus on the recovery of overdue accounts.

Participants were shown how to increase their levels of confidence in dealing with difficult internal and external customers.

Workshop Objectives:• Understand the psychology in debt collection.• Provide new strategies for collecting the “hard” accounts;• Teach how to deal with common excuses for non-payment of

accounts;• Time management skills;• How to handle the aggressive debtor;• Provide practical telephone collection techniques.

Once again our presenter Mike Murphy MICM CCE enlighten all who attended with excellent tools to take away to be a better credit person in collections.

– Warren Myers, Media & Publications



western australia/nt

Young Credit Professional I have spoken about the career opportunity, stability and variety I see within the Credit Industry but we need to encourage fresh young faces to attend our events and joining the AICM. I was surprised that even the Young Credit Professional Award that is free and offers a prize does not attract more applicants.

I feel that perhaps many people do not know if this rewarding YCP award and process is 100% applicable or appropriate to them or their job role. Basically if you or some-one young you know spends time working in Credit Management, they are an ideal candidate.

AICM recently held its inspirational NSW Credit Team of the Year Award I noticed in the March edition. These nominated teams display behavior we should all encourage and promote within the workplace. Helping those around you to become more competent, knowledgeable and professional will improve performance, and result in less errors and risks around you. This can only help improve your organization, and therefore help make your days more pleasant, positive and enjoyable.

The YCP Award, sponsored by D&B, is a great place to start, so as mentioned in the past, please! encourage the people around you to get involved, to read up on the Institute and all the benefits it can provide such as training, compliance updates, networking, and much more. Many people will not know about these resources without being told and encouraged by our older, wiser and more experienced counterparts and mentors.

– Kristy Shrigley – MICM, Young Credit Professional WA

Membership ReportThe challenge is still on for all members to encourage a credit person in their network to attend a function or seminar in 2012. The Institute can offer many benefits to people in credit and one being to network their way to a promotion or a new credit position higher up with more benefits.

– Warren Myers MICM, Media & Publications

WA Councillors for 2012• Phil Kelly – ASG Group• Michael Miller – Rand Transport• Warren Myers – CMP Recruitment

– Media and Publications• Evan Verge – Melsom Robson

– Director• Raffaele Di Renzo – Price

Sierakowski Legal – Legal• Rikki Lee Schulz – Bunnings – YCPA• Kristy Shrigley – AMPAC Debt

Recovery – YCPA • David Sinton – Veda – Membership • Kevin Allen – Veda• Byron Savage – Dept of Health –

Finance• Colin Phillis – AMPAC Debt

Recovery – President• Ron Adams – Executive Officer

via [email protected] for any questions.

Economic breakfast.

WA/NT Division: Alan Langford, chief economist, BankWest with Colin Phillis, WA President.

Economic breakfast.

The Australian Institute of Credit Management Western Australia/NT

welcomes the following organisations as our sponsors for 2012



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


Queensland Andy Chapman Fuji Xerox Australia Pty LtdPeta Elings Fuji Xerox Australia Pty LtdFrances Futter Fuji Xerox Australia Pty LtdLeann Hammond WhkKristen Healy Shand Taylor LawyersRobin Holland Fuji Xerox Australia Pty LtdLouise Kerr Fuji Xerox Australia Pty LtdJane Klaassen Fuji Xerox Australia Pty LtdAviti Mathur Bis Industries LimitedGiovanni Sgroi Vita Group Pty LtdTracy-Anne Sullivan Fuji Xerox Australia Pty Ltd

New South WalesGary Amador Fuji Xerox Australia Pty LtdAmin Amani Fuji Xerox Australia Pty LtdSheetal Ambani Graincorp Operations LtdLauren Barlogio Fuji Xerox Australia Pty LtdJenni Beesley Fuji Xerox Australia Pty LtdDenis Borges Fuji Xerox Australia Pty LtdMelissa Burrow Fuji Xerox Australia Pty LtdMaria Chew Fuji Xerox Australia Pty LtdJenia Daliri Fuji Xerox Australia Pty LtdMichael De Palo Fuji Xerox Australia Pty LtdErin Den-Besten Fuji Xerox Australia Pty LtdRoslyn Diesner Macgillivrays SolicitorsFelicity Foster Fuji Xerox Australia Pty LtdFiona Frazer Fuji Xerox Australia Pty LtdKerry Galvin Fuji Xerox Australia Pty LtdDaniel Gonzalez Fuji Xerox Australia Pty LtdKaren Griffith Fuji Xerox Australia Pty LtdShant Hovagimian One Steel LtdRebecca Luckman Fuji Xerox Australia Pty LtdEddie Ma Fuji Xerox Australia Pty LtdJennifer Marshall Fuji Xerox Australia Pty LtdNicole Mcdougall Fuji Xerox Australia Pty LtdTony Mchugh Fuji Xerox Australia Pty LtdErmina Mujkic Fuji Xerox Australia Pty LtdStephanie Nicholas Fuji Xerox Australia Pty LtdVivita Adi Nuve Fuji Xerox Australia Pty LtdAmit Patel Fuji Xerox Australia Pty LtdAshley Perkins Fuji Xerox Australia Pty LtdLynette Plunkett Fuji Xerox Australia Pty LtdRabia Porter Groupe SebNadarajah Ramraj Fuji Xerox Australia Pty LtdPerci Rana Fuji Xerox Australia Pty LtdCorrine Riley Graincorp Operations LtdJoanne Roberts Fuji Xerox Australia Pty LtdJulie Rojas Regency MediaJoanne Ross Warner Home Entertainment AustAngelina Salamun Fuji Xerox Australia Pty LtdMonica Schulman Fuji Xerox Australia Pty LtdUday Shankar Fuji Xerox Australia Pty LtdAmit Sharma Fuji Xerox Australia Pty LtdPoonam Sharmp Fuji Xerox Australia Pty LtdLilian Shen Fuji Xerox Australia Pty LtdMoni Sian JanssenKetul Soni Becton Dickinson Pty Ltd

Ralph Vaz Fuji Xerox Australia Pty LtdMark Wattle Fuji Xerox Australia Pty LtdLeigh Wiggins Fuji Xerox Australia Pty LtdAnna Wu Fuji Xerox Australia Pty LtdMark Bridgman Husqvarna Australia Pty LtdMaria Kleynhans ...Steven Liddell House Of QuirkyCatherine Pimentel Adstream (Aust) Pty LtdRaela Tautua Piper Alderman LawyersAdrian Watkin Prestige Auto TradersCaroline Whiteside Dicker Data

Victoria/TasmaniaLloyd Backhouse Calliden GroupKirsten Basilotta Fuji Xerox Australia Pty LtdMurray Brown Fuji Xerox Australia Pty LtdWayne Carr Fuji Xerox Australia Pty LtdAleli Fernandez Fuji Xerox Australia Pty LtdPenelope Forrester Fuji Xerox Australia Pty LtdArpit Handa Fuji Xerox Australia Pty LtdSusan Hobart Mars Australia Pty LtdEleftherios Kaltzis Fuji Xerox Australia Pty LtdBelinda Leskie MarsMatthew Rodd Fuji Xerox Australia Pty LtdAndrew Ruigrok Toxfree Solutions LimitedKate Schlegel Fuji Xerox Australia Pty LtdTim Valanidas Fuji Xerox Australia Pty LtdDeanna Virgilio Fuji Xerox Australia Pty LtdBelinda Walker Menora Foods Pty LtdLana Walsh Mars Australia Pty LtdSimone Watt HaysTimothy Williams Mars Australia Pty LtdShane Woolley Alsco Pty LtdJohn Zukerman Probe Group Pty Ltd

South AustraliaJohn Madsen Madsen RowleyAnnabelle Dearden Brice Metals Australia Pty LtdBrendan Hall O’loughlin’s Lawyers

Western AustraliaGemma Holden Fuji Xerox Australia Pty LtdEdyta Fazzalari Chamber Of Commerce & IndustryZhu Gray Chamber Of Commerce & IndustryJulie Mckenna Chamber of Commerce & IndustryAnnabelle Merioles Chamber of Commerce & IndustryMichelle Nath Fuji Xerox Australia Pty LtdFiona Newman Fuji Xerox Australia Pty LtdAdriana Ottervanger Fuji Xerox Australia Pty LtdMoana Siliniu Wood & Grieve EngineersBrenda Thorpe Fuji Xerox Australia Pty LtdSharon Townsend Covs Parts Pty LtdRacheal Tumelty Strathearn Insurance BrokersDianne Theron S.C Johnson

NEW MEMBERS

The Institute welcomes the following credit professionals who were recently admitted to membership in February and March 2012

Improve your working capital? Time to get intimate

Improving working capital is also a matter of

the right approach: get closer to your customer

with OnGuard software for credit, collections and

complaints management. It strengthens your

customer relations and generates better financial

and operational results. Over 850 companies in

30 countries worldwide already have chosen

OnGuard. So, when do we get intimate?

OnGuard. A decent way of doing business.W W W. O N G U A R D . C O M

Improve your working capital? Time to get intimate

Improving working capital is also a matter of

the right approach: get closer to your customer

with OnGuard software for credit, collections and

complaints management. It strengthens your

customer relations and generates better financial

and operational results. Over 850 companies in

30 countries worldwide already have chosen

OnGuard. So, when do we get intimate?

OnGuard. A decent way of doing business.W W W. O N G U A R D . C O M

Bulk load and register your PPSR security interests with ease

Veda’s PPSR Managed Batch Registration Service provides an end-to-end service to help you with existing, transitional securities or new registrations. This includes:

• A HealthCheck to provide important status and identity information about your customers.

• Easy to use templates and documents to help you prepare your registration information.

• Reviewing and testing by Veda to provide feedback on the integrity of your PPSR Data.

• A single report including all registration details processed in a single batch.

Please call 1300 921 621, email [email protected] visit www.veda.com.au for more information.

If you have a large number of PPSR registrations to process, Veda may have a solution for you

Documents

The Publication for Credit and Financial Professionals IN ... · Details on the NSW Credit Team of the Year award in 2012 appear in this edition of the magazine on page 5. The 2012