2011 Annual Conference - AICM...Level 3, 619 Pacific Highway St Leonards NSW 2065 Tel: (02) 9906...

Check our website ... www.aicm.com.au

Volume 19, No 1 October 2011

2011 Annual Conference

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

n Collections n Credit Management n Consumer Credit

CREDIT MANAGEMENT IN AUSTRALIA • October 2011

VOLUME 19, NUMBER 1 – October 2011

Annual Report 2

Credit Management Training 4

From the President 5

CollectionsEssential Terms for your Trading Terms 6By Roger Mendelson

Credit ManagementManaging Credit Risks when Dealing with SME’s 8By Colin Porter

Streamlining your Cashflow 10By David Taylor

Local Business Failures Buck Global Trend 11Australian insolvency levels trend upward as global rates fallBy Christine Christian

Market Survey: Receivables in Australia 14By Jim Mangano

Dollars & Cents 17By John Carroll

Business Demand Index 18By Moses Samaha

5 Perilous Myths on Personal Property Protection 20By Karl Hill

Human ResourcesFuture Workforce… Are you Ready? 22By Liana Gorman

QLD Division: QLD YCPA winner Dale Hannan and YCPA dinner guest speaker Angry Anderson.

NSW Division: Ian Smallman, Christopher Hayes, Carlie Brown at the YCPA Dinner.

28 30

CONTENTS

Colin Porter

Roger Mendelson

8

6

Christine Christian

David Taylor

10

Jim Mangano

14

11

EDITOR/PUBLISHERTerry Collins

Email: [email protected]

CONTRIBUTING EDITORSVanessa Graydon NSW

Murray Ashford QLDGail Watt SA

Christine Ashworth WARobyn Bleeze VIC/TAS

ADVERTISING MANAGERTony Paul

Association MediaTel: (02) 9460 7955

Fax: (02) 9460 8632Email:

[email protected]

EDITING & PRODUCTIONAnthea Vandertouw

Ferncliff ProductionsTel: 0408 290 440


PRINTINGSuperfne Printing Co Pty Ltd

7 Wollongong RoadArncliffe NSW 2205Tel: (02) 9567 3044

Fax: (02) 9567 3215THE EDITOR reserves the right to alter or omit

any article or advertisement submitted and requires idemnity from the advertisers and contributors against damages or liabilities

that may arise from material published. CREDIT MANAGEMENT IN AUSTRALIA is

published by the Australian Institute of Credit Management, Level 3, 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, 2011.

FEATURES

December 2011AICM, National Conference

ReportBusiness Information

Factoring and Discounting

March 2012Software and Technology

EDITORIAL CONTRIBUTIONS SHOULD BE SENT TO:

The Editor, Level 3,619 Pacific Highway

St Leonards NSW 2065or Email: [email protected]

October 2011 • CREDIT MANAGEMENT IN AUSTRALIA

Consumer Credit Consumer Credit Demand Index 24By Angus Luffman

What is Unfair under the New Australian Consumer Law? 26By Roslyn Diesner

Credit Insurance/RiskClaims, Claims and More Claims Likely 27By Terry Duffy

Around the States

Queensland 28New South Wales 30South Australia 34Victoria/Tasmania 36Western Australia/NT 38New Members 40

SA Division: Networking Abby Poyzer, Jeff Phillips and Gail Crowder.

VIC/TAS Division: YCPA winner Abdul Shafeel (Simplyenergy), and Damian Karmelich – D&B Director Commercial Services.

34 36

Karl Hill

Moses Samaha

18

Angus Luffman

24

20

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 Member ServicesC.D. Prosser FICM CCE

FinanceG.L. Morris MICM CCE

YCPA & CCER. Freier MICM CCE

J. A. Neate MICM

E.R. Verge MICM

CHIEF EXECUTIVE OFFICERT.J. CollinsLevel 3, 619 Pacific HighwaySt Leonards NSW 2065Tel: (02) 9906 4563Fax: (02) 9906 5686Email: [email protected]

EXECUTIVE OFFICES

Queensland DivisionToni SawyerExecutive Officer30 Birrimba Street Alderley QLD 4051Tel: (07) 3352 7546Fax: (07) 3356 4183Email: [email protected]

NSW DivisionDeborah MannersLevel 3619 Pacific HighwaySt Leonards NSW 2065Tel: (02) 9906 4563Fax: (02) 9906 5686Email: [email protected]

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

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

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

2 CREDIT MANAGEMENT IN AUSTRALIA • October 2011

aicm annua l repor t

SUMMARYThe Australian Institute of Credit Management (AICM) achieved significant outcomes in 2010 /11 in terms of advocacy, education and training, leading credit industry reform and disseminating credit information to the wider financial industry.

HIGHLIGHTS IN 2010/2011

AICM Submissions to Government EnquiriesAICM made 5 submissions to government committees and authorities in the period October 2010 to September 2011, they being:

Personal Property Securities ProgrammeConsultation Draft Cost Recovery ArranagementsAICM made a submission for a reduction in the proposed fees.

Review of the Debt Recovery Process Issues PaperThe Australian Institute of Credit Management made a submission to the Better Regulation Office and Department of Justice Issues Paper – Review of the Debt Recovery Process on 25 November 2010.

Invitation to AICM to address the Standing Committee of Attorneys-GeneralThe AICM National External Affairs Manager, Del Cseti was invited to address the Standing Committee of Attorneys-General on 27 May 2011 in Sydney, on the Harmonisation of Debt Recovery and Enforcement Processes between Australian Jurisdictions.

AICM Submission re: Business Names Registration Bill 2011 – Exposure DraftAICM made a submission on 23 April 2011, supporting the Business Names Registration Bill 2011 – Exposure Draft.

AICM Submission re: Review of Credit Provider Determinations: Consultation Paper No. 1 – Assignees and Classes of Credit ProvidersAICM made a submission on 1 June 2011, supporting the proposals of the Office of the Australian Information Commissioner.

These submissions are included with all 13 AICM submissions made over the past 2 years on the AICM web site home page at www.aicm.com.au

Professional Development AICM Learning Services – Credit QualificationsAICM Learning Services writes and /or delivers qualifications at Certificate, Diploma and Degree level across Australia, through face to face public courses, in house corporate training, government sponsored traineeships and under licence to tertiary institutions and other professional organisations.

AICM registered over 200 new students and issued 54 nationally recognised qualifications in 2010/11 bringing the total number of registered students to have studied with the AICM since 2001 to well in excess of 2,000 with over 500 formal qualifications issued.

Professional Development, Events and Functions. 96 events including national and divisional seminars, network meetings, working breakfasts, lunches, dinners, social events and conferences were delivered throughout AICM Divisions in 2010/ 2011.

AICM – Understanding PPS Law Text Book – Sold OutThe text book, Understanding Personal Property Securities Law, authored by AICM Manager External Affairs, Del Cseti and published by CCH was released in December 2010. The book was an outstanding success having sold out in three months from release. CCH released a second production run of this book and developed an e-version to help meet demand.

2010 Young Credit Professional of the Year Award The Australian Institute of Credit Management Young Credit Professional of the year Award (YCPA) has become the most prestigious and high profile award in credit in Australia.

Gregg Odlum, NSW Division was announced as the winner of the 2010 National Young Credit Professional of the Year by the YCPA National Sponsor, D&B at the AICM National Conference in Surfers Paradise in October 2010.

2011 Young Credit Professional of the Year AwardThe 2011 National Young Credit Professional of the year Awards program was sponsored by D&B for the fifteenth continuous year.

Over 35 potential candidates were approached by AICM representatives from which 23 finalists were selected across the five AICM Divisions. The YCP Award dinners were held in each of the five AICM Divisions in July and August and were high profile events with guest speakers adding to the spectacle of the credit industry’s celebration of its rising stars.

annual reportOctober 2010 - September 2011

October 2011 • CREDIT MANAGEMENT IN AUSTRALIA 3

aicmannua l repor tannua l repor t

AICM Councillors and past YCPA candidates used their extensive network of contacts to source and assess candidates and to encourage participation. AICM Youth network nights were also held to inform and encourage young credit professionals to participate.

An extensive marketing campaign throughout 2011 consisted of 5,000 glossy brochures being printed and distributed across the credit industry and at all AICM seminars and events from February to May, AICM magazine promotions including testimonials from past YCPA finalists and AICM web site promotions.

The 2011 YCPA National Finalists are; z Maree Karil - South Australia z Dale Hannan - Queensland z Dean Young - NSW z Abdul Shafeel - Victoria / Tasmania z Kristy Shrigley - Western Australia

Photos and reports of each of the Division YCP Awards dinners including the presentations to the Division winners by the D&B State representative are published in the October, (conference edition) of the AICM magazine.

Attention now turns to the National YCPA Finalists who will be presented to delegates at the 2011 AICM National Conference and at the announcement of the National Winner at the Conference Dinner.

2010 AICM National Conference The 2010 AICM National Conference was an outstanding success with over 400 delegates and the survey response giving the conference a perfect score of 100% rating of ‘good’, ‘excellent’ or ‘outstanding’. Sponsors and exhibitors were also extremely positive with the outcome of the conference with 93% of delegates responding to the survey finding the Trade Exhibition to be useful and 95% of those responding to the survey appreciating the opportunity to meet the exhibitors. Presentations by speakers and a photo gallery were made available on the AICM web site.

New Certified Credit Executive Program Commenced in 2010A new assessment program was introduced for members seeking to graduate to CCE status. The old 3 hour annual exam held in September was abolished and a two stage program introduced, commencing in September 2010 and repeating every 6 months.

12 candidates successfully passed the new CCE on line exam held on 13 - 16 September 2010.

5 candidates who successfully completed the CCE on line exam submitted papers for assessment prior to the cut-off date of 30 September 2010 in order to be awarded their CCE certificates in 2010 and to be in the running for the 2010 CCE Dux award. All 5 candidates successfully completed their assessments. Congratulations to;

z Wendy Dickinson (Qld) who was the CCE Dux for 2010,

z Brian Kay (Qld), z Carolann Skerratt (Qld),

z Carla Seirlis (Qld) z Tracey Saville (NSW).

A further 6 candidates from the September 2010 on line exam completed their professional papers and were awarded their Certified Credit Executives status. They were;

z Fredy Chiriya – NSW – attained November 2010 z Belinda Killian – NSW – attained April 2011 z Gail Lord – NSW – attained April 2011 z Phoebe Tan – Victoria/Tasmania –

attained April 2011 z Noel Richardson – South Australia –

attained April 2011 z Murray Ashford – Queensland –

attained April 2011 The CCE on line exam held in March 2011had

3 candidates successfully complete the exam and one candidate completed their written paper. Congratulations to Lisa Anderson – South Australia.

CCE Dux sponsor, NCI Credit Insurance (Brokers) will present the 2011 Dux prize at the CCE lunch to be held at the AICM National Conference in October 2011.

AICM Membership Growth in 2010/11AICM recorded positive membership growth in 2010/11. The national increase was 3.5% and what was further encouraging was that the rate of attrition has been continu-ally declining for the past 4 years whilst the annual increase in new membership has continually improved over the same period. Over 400 new members joined in 2010/11. The Employer Member Discount Program has proven to be a success with a total of 16 companies with over 180 employee members joining the program in 2010/11.

Sponsorship 2011 Division SponsorshipThe AICM retained overall sponsor numbers across Australia in 2010/11. We thank all of our Division sponsors for their renewal in 2010/11and in particular we appreciate the continued sponsorship of Veda Advantage in all AICM Divisions. In January 2011 we welcomed new sponsors Patane Lawyers in NSW and Blitz Credit Management joined in Western Australia in April 2011.

2011 National Conference SponsorshipAICM retained all major sponsors for the 2011 AICM National Conference to be held at the Hilton on the Park, Melbourne on 12 – 14 October 2011. Veda Advantage is the Premium Sponsor, Sungard the Sup-porting Sponsor and D&B the YCPA Dinner Sponsor. We also welcomed Patane Lawyers as the conference satchel sponsor in 2011

YCPA SponsorshipD&B renewed their sponsorship of the Young Credit Professional of the Year Award in 2011. This is the fifteenth consecutive year of sponsorship by D&B of this national credit award.

Ron Frier MICM CCE

Colin Prosser FICM CCE

Terry Collins CEO

Grant Morris MICM CCE

Frank VredenbregtMICM CCE

James Neate MICM

Steve Thomas LICM CCE


aicm annua l repor t

Resignation Of Director From Western AustraliaThe Director from Western Australia, Steve Thomas announced his resignation from the Board on 1 September 2011 due to business reasons. This was Steve’s second term as a Director having served from 2000 to 2004 and again from 2009 to 2011. AICM is grateful for Steve’s commitment and contribution to the AICM.

New Director From Western AustraliaEvan Verge was endorsed as the Director from Western Australia on 14 September 2011.

Division Presidents 2011/12Division Presidents elected for 2011/12 are;

z QLD –David Maczek z NSW – Nick Pilavidis z VIC/TAS – Jeff Hurst z SA – Trevor Goodwin z WA – Colin Phillis

Vale Pat ClarkIt was with great sadness that we learnt of the death of Pat Clark, AICM Executive Officer in the Victorian / Tasmania Division and Life member of the AICM. Pat died unexpectantly on Wednesday night 25 May 2011 at her home. Pat was a loved and respected friend and mentor to many in the credit industry across Australia.

CreditManagementTRAINING

TOPIC UNIT DESCRIPTION MELBOURNEHilton on the Park

SYDNEYFour Points by Sheraton

BRISBANETattersalls Club

Evaluate Credit Applications & Establish Securities(Cert IV)

Assess credit applicationsEstablish and maintain appropriate securitisationImplement risk management strategies

25 & 26 October 25 & 26 October 25 & 26 October

Legal Compliance(Cert IV & Diploma)

Promote compliance with legislationApply principles of professional practice to work in the financial services industry

22 & 23 November 17 & 18 November 17 & 18 November

Corporate Insolvency (Diploma) Respond to corporate insolvency situations 20 & 21 October

Outsourced Services(Diploma)

Establish outsourced services and monitor performance 15 & 16 November 10 & 11 November 10 & 11 November

Trust Accounts (Diploma) Establish and manage a trust account 8 November

FNS40110 – Certificate IV in Credit Management To gain a FNS40110 Certificate IV in Credit Management qualification, learners will need to complete 12 units of competence covered in 4 components. Learners then need to complete Components 1, 2 & 3 as these components address the core (or compulsory) requirements. The learner will then need to select only one from either elective component - E1 or E2 in accordance with their requirements. Components can be completed in any order. Course outline and enrolment form can be downloaded from www.aicm.com.au/learningservices or email [email protected]

FNS51510 – Diploma of Credit ManagementTo gain a FNS51510 Diploma of Credit Management qualification, learners will need to complete 12 units of competence covered in ten components. Learners will need to complete Components 1, 2, 3 4 & 5 as these components address the core (or compulsory) requirements. The learner will then select five from eight elective components – E1, E2, E3, E4 or E5 in accordance with their requirements. Components can be completed in any order. Course outline and enrolment form can be downloaded from www.aicm.com.au/learningservices or email [email protected]

Appointment of Executive Officer in Victoria/TasmaniaPeter Kerlin was appointed as the executive officer in the Victoria/Tasmania Division in August 2011.

Financial PerformanceAt the time of publication AICM was contesting the non- payment of royalties from a client. The notice of non-payment for the financial quarter April – June 2011was not received until 22 July 2011.This has resulted with an unforeseen deficit for the financial year 2010/11.

The 2011 AICM Audit Committee Memorandum concluded that ‘If it were not for these unforeseen (name of client) issues which occurred in July 2011, a small surplus would have been achieved’ Notwithstanding the contested payment, the objectives of the AICM were met in 2010/11 whilst maintaining good financial control of operations.

AICM DirectorsThe Board of Directors as at June 2011 comprised;

z Frank Vredenbregt MICM CCE – Australian President z Colin Prosser FICM CCE – Australian Vice President &

– Member Services Director z Ronald Freier MICM CCE – CCE and YCPA Director z Grant Morris MICM CCE – Finance Director z Steve Thomas LICM CCE – Professional Development Director z James Neate MICM – Media Director z Terry Collins – Chief Executive Officer

– Terry Collins,

Chief Executive Officer


Frank VredenbregtMICM, CCEAustralian President

Our National Conference is put together each year “in house”

by our national office staff and numerous volunteers. Truly,

they do an outstanding job and put together a “World Class”

event that is the largest, most prestigious gathering of Credit

Professionals in our region. Last year on the Gold Coast, we were told

by various delegates that it was the “Best Conference Ever”. We hope

to maintain that standard. Delegates from across Australia and overseas

attend regularly to keep updated with legislative changes and current trends

and to network with their peers. Service providers put together displays

that help keep us up to date with products and services that make our jobs

easier and more enjoyable. Our sponsors assist us to provide a conference

that is affordable. Together, we have built a reputation that is respected and

honoured by Credit Professionals across Australia, and building around the

world. This year we have extended a special invitation to our New Zealand

colleagues whose own conference was unable to be held due to the

devastating Christchurch earthquake. Please make them welcome.

I must acknowledge and thank Veda, our Premium Sponsor for the 2011

AICM National Conference and SunGard, our Supporting Sponsor. Further I

would like to acknowledge Nobel Systems, AMPAC Debt Recovery, Kemps

Peterson, OnGuard, I P Payments, Veda, PPS Solutions, Dun & Bradstreet,

Sinclair Consulting, Austral Mercantile, Results Legal Solutions, Bing, SunGard,

NV Lawyers, CreditorWatch, IMTG, and NCI Insurance (Brokers) who have taken

exhibition booths in our trade display.

Our speakers have spent many hours putting together quality presentations to

ensure the high standard of our conference is maintained. On behalf of the Board

of the Institute I would like to give my wholehearted thanks to these people and

organizations for their unwavering support. Without them we would be unable to

present to you a conference of this standard.

On Tuesday 11th October, the State Finalists of the Young Credit Professional

of the Year will be competing for the National title. With the continued

sponsorship of Dun & Bradstreet we have brought together the crème of the crop

of Australia’s younger credit professionals. This year our finalists are:

NSW – Dean Young, Credit Corp Group

VIC – Abdul Shafeel, Simply Energy

SA – Maree Kairl, National Credit Insurance (Brokers)

WA – Kristy Shrigley, AMPAC Debt Recovery

QLD – Dale Hannan, Quantum Credit Management

Candidates are judged on several catagories including their professionalism,

education, self improvement, and work achievements. I wish all candidates every

success in both this event and their future careers. Unfortunately there can be

only one winner, but the whole process from initial application through to final

judging provides the candidates with valuable experience that will assist them in

their future endeavors. They are all winners in my eyes. Dun & Bradstreet have

sponsored this event since its inception in WA as a State event in 1994 and

helped make this event the success it is. Their continued support is very much

appreciated and I look forward to working with them in the future to honour the

future leaders of our profession. On Wednesday afternoon of the conference

the five finalists will be introduced to delegates. The National winner will be

announced at the President’s Dinner the following Thursday.

I look forward to catching up with everyone at the conference.

aicmf rom the p res iden tannua l repor t


Collections

Most businesses have either very poor trading terms or no written trading terms at all.

It is common for larger companies to require new customers to complete an application for credit form and the trading terms are often annexed to this form (which is precisely where they should be). However, the terms which are attached are often old photocopies of a photocopy of a photocopy and invariably, the actual terms will be quite deficient.

This only becomes a problem when it comes to suing a defaulting customer. However, that issue may well prove fatal or it may result in a judgment being entered for substantially less than it could otherwise be.

Reviewing and updating your trading terms has to be a priority role for any credit manager.

To be legally effective, the terms must be agreed to by the customer. This is why the best place to append them is to the credit application form, which is signed by the customer and which thus acknowledges the trading terms.

You may well have many customers who have either slipped through the net or who acknowledged terms which may have been current at the time but which are now hopelessly out of date.

A good way to overcome this problem is to incorporate a provision in your trading terms that the terms which govern current dealings are as detailed

on your website and that there is no obligation on you as a business to advise your customers of any changes and that the obligation is on the customer to check on the website prior to placing an order.

This simple provision allows you to update and vary your terms as the need arises.

There are several provisions which are crucial to incorporate in your terms and the rest of this article examines these.

Reference to a party must include a reference to “each of them jointly and severally” in the event of there being more than one. This means that any one or more of the individuals may be liable for 100% of the debt, which means that you can choose the party with the most assets and make the claim against him and leave it to him to pursue his partners for a contribution.

Reference to an individual must include a reference to his executors and reference to a company must include a reference to its assigns and receivers and liquidators. Without this provision, it may prove impossible to pursue claims against an estate or the receiver of a company.

There should be a simple clause which provides that there shall be “no right of set-off”. This clause will make it much more difficult for your debtor to defend the claim on the basis that he has claims against you.

There will be various specifically worded clauses to limit claims against you pursuant to warranties. However, one very important clause on this point is a provision which provides that your company will “not be liable for consequential losses” and which limits claims to the amount of the contract value.

Essential terms for your trading terms

By Roger Mendelson*

Roger Mendelson

Reviewing and updating your trading terms has to be a priority role for any credit manager.


Collections

“compare apples with apples”

The only insurance

we know is Credit Insurance.

At NCI we deal with all the credit insurers and can advise you on the policy differences and which insurer

suits your business best.

Contact Terry Duffy

on 1800 466 800

Why limit yourself to one insurer?

Why place credit insurance with a non specialist?

Arranging credit insurance

with NCI!

Direct with an insurer

With a non specialist

...the existence of well drafted and legally binding trading terms should put you in a strong position, to the

point where you deter debtors from using the standard tricks of trade...

A well-worded clause is required to provide for the following in the event of default:

z Interest will run from the date payment was due until the date payment was made at a prescribed rate.

z Legal costs incurred by you in recovering the debt will be recoverable “on the indemnity basis” and will form part of the debt. Without this clause, ultimate costs awarded will be limited to what is known as party-party costs, which may be only about 60% of the actual costs incurred.

z In the event of the debt being referred to a collection agency, all costs chargeable by the agency (as if the debt had been collected by the agency) should be added to the claim. If this is carefully worded, it will mean that if the debt is referred to an agency, the agency’s commission and other costs can legally be added to the claim.

The terms must clearly define the date due for payment. For example, it may provide that the due date is “14 days after issue of an invoice”. Without clarity on this point, there are likely to be disputes and the aim of well-drafted trading terms is to avoid disputes.

In a conflict between two countries, the country with the most powerful armed forces is likely to get its way, without the need to actually use its forces. It is the existence of them which will deter the other country from taking them on.

Similarly, the existence of well drafted and legally binding trading terms should put you in a strong position, to the point where you deter debtors from using the standard tricks of trade of defence lawyers to wriggle out of their obligations.

*Roger Mendelson is a director of Prushka Fast Debt Recovery Pty Ltd and is principal of Mendelsons Lawyers Pty Ltd and is the author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival, both published by New Holland Publishers in 2009.


Credit Management

By anyone’s count, the Australian business landscape is dominated by small and medium enterprises (SMEs). According to the ABS, there are approximately 2 million of them. Indeed, were you to pick an Australian business at random, you’d have a 96 per cent chance of choosing an SME.

For credit managers, this means that extending credit to businesses much smaller than their own is routine. It’s therefore a worthwhile exercise to consider the state of the SME space, the particular challenges it brings, and the tools that can assist with better credit decisions.

Why focus on SMEsWhile the amount of credit extended to SMEs is often relatively small, it’s important to understand that in comparison to corporate debtors, SMEs are a bigger risk.

As is often said, SMEs are the ‘engine room’ of the Australian economy, but they’re also inherently more fragile than big businesses – with everything from poorly managed cash flows to their own bad debtors capable of sending them to the wall.

As smaller entities, they’re also more exposed to the broader state of the economy – and they’re often the first to succumb to downturns in economic activity.

The SME sector has a high rate of non-payment disputes. A 2010 Department of Innovation, Industry, Science and Research report found that around one in five of small businesses had had a dispute with another business since 2005, with 45% of these concerning unpaid bills. The Council of Small Business of Australia (COSBOA) insists that after under-reporting is taken into account, the real figures are much higher.

Right now, additional factors are putting SMEs under extra stress. Not

only are many struggling to obtain finance, the Australian Taxation Office is cracking down on SME tax obligations. ASIC says that insolvency practitioners are citing the ATO’s tighter policies as a contributing factor to the 21 per cent jump in insolvencies recorded in June of this year, a month in which 1,027 companies entered external administration. That result was the second worst since records have been kept, with the construction (24 per cent), services (22 per cent) and retail sectors (10 per cent) worst hit.

The point is that a dollar given in credit to an SME is a dollar loaned at a higher risk. Managing this risk is therefore a vital part of managing an overall ledger.

The trouble with managing SME credit For credit managers, the SME space is a particular challenge for two reasons.

The first is the sector’s size. With millions of businesses making millions of transactions a day, there just isn’t the same depth of monitoring and reporting as there is at the big end of town.

The second problem is under-reporting. The unfortunate fact is that small companies generally don’t report bad debts – either because they lack awareness of how to go about it, don’t have access to the right tools, or the costs are out of reach. Instead, their first thought is often to take the debt to a small claims tribunal or a debt collector, acts which don’t always produce successful results.

This situation means that credit managers have little to no early-warning system when it comes to SMEs.

To date, businesses typically ask SMEs for trade references while performing checks through large credit reporting bureaus. This has provided ample opportunity for risky and poorly performing SMEs to fly under the radar.

Managing credit risks when dealing with SMEs

By Colin Porter*

By Colin Porter

While the amount of credit extended

to SMEs is often relatively small,

... in comparison to corporate

debtors, SMEs are a bigger risk.


Credit Management

The simple reason for this is that

SMEs usually default on their corporate and bank debts last. Check any administrator letters sent to creditors of a failed SME, and you’ll find that the majority of businesses owed money are also SMEs. That’s no accident. Many poorly performing SMEs try to hide their financial woes by defaulting on smaller creditors first, knowing that they are unlikely to take legal action or report

the default widely (as many SMEs don’t participate in credit reporting bureaus).

It’s not until an SME defaults on a corporate creditor or bank who is able to take action and make a default report with a credit reporting bureau that other corporate and bank creditors become aware that the SME is in financial distress and that they too could be exposed to a bad debt.

New toolsThere is good news for credit managers dealing with SMEs, however. A new service has entered the market to specifically enable credit reporting on small and mid-sized businesses.

At CreditorWatch, we’ve seen strong uptake among SMEs in our network which brings small and mid-sized businesses together to watch and monitor each other’s payment histories, with thousands of businesses now monitored by their peers. We’re also making our service more comprehensive,

with the introduction of court judgements and other data streams.

While it’s not aimed at the corporate sector per se, we believe that, used alongside large credit reporting bureaus, CreditorWatch offers credit managers the chance to identify risky SMEs faster. The service short-circuits the ability of non-payers to hide their financial woes through the provision of shared intelligence about poorly performing SME debtors.

As credit professionals know, better credit decisions are made with better information. By keeping watch on the information generated by the SME community, corporate creditors are more likely to see problems as they emerge and are able to take action to limit their exposure. It’s a good first step towards removing some of the risk of engaging with this volatile sector.

*Colin Porter is the founder of CreditorWatch.com.au, a commercial credit reporting bureau where SMEs share information about bad debtors to make better credit decisions.

Dealing with SMEs z The SME sector is volatile

and exposed.

z SMEs in trouble often attempt to hide by first defaulting on SME creditors, leaving corporates in the dark.

z SME peer-to-peer bad debt reporting can provide an early-warning radar.

z Pay careful attention to SME clients in industries known to be struggling.


Credit Management

own cash flow and are struggling or not willing to meet pre-agreed payment conditions. These red flags include widening or fluctuating gaps between payment, arranging a scheme but defaulting within the first few payments, re-requesting invoices already sent and recurrent querying of invoices.

II – Break down communications barriersGood credit management is no longer just about chasing debt, but understanding the customer. It is not uncommon for 80 per cent of a company’s revenue to come from 20 per cent of its customers. Therefore it is common sense for firms to have the greatest understanding of their top tier customers, discussing invoices before they are issued to iron out any potential problems and highlight any challenges around cash flow. Credit managers ought also to focus on actively building relationships with their customers and their finance departments. These efforts will encourage customers to communicate with suppliers about their cash flow situation and keep them informed of any problems on the horizon. Such relations not only prevent more remedial action at a later stage, they also keep the supplier at the forefront of the customer’s mind, ensuring that if a customer should run into difficulties, the company’s invoice will be settled as a priority over those of other suppliers.

III – Keep tabs on behavioural patternsA classic tactic among customers aiming to withhold or delay payment is to raise spurious queries or complaints around invoices. A root-cause analysis of these complaints creates transparency by tracking the number of complaints raised by a particular customer over a set timeframe against the percentage that were proven to be unfounded. Software solutions can build a sophisticated profile

of customers including payment terms, historic payment behaviour, disputes raised and credit scores. It can help companies predict when customers are getting into difficulty by spotting – and anticipating – early warning signs.

IV – Weigh up the cost of pursuitToday, simply invoicing a client for a product or service is no longer a guarantee of payment. The process by which late payments are collected can be an unnecessarily lengthy and drawn out one. Defining these processes requires a certain amount of foresight and pursuing these processes tends to be time consuming – time which could otherwise be utilised building up important business to customer relations. By understanding and identifying the tipping point whereby the cost of chasing customers outweighs the benefits of keeping them, a good credit manager can reduce the wasted resources invested in such customers and ultimately prevent write-offs.

For most companies, the path to payment is unfortunately littered with obstacles. Effective credit management is about clearing these obstacles to enable CFOs to make accurate assessments on value and risk and allow them to react swiftly to the rapidly changing customer and market environments. As a discipline, credit management focuses on giving CFOs the insight they need to safeguard their bottom line by identifying and anticipating tomorrow’s risk. At a time when cash counts, companies with the strategic foresight to integrate credit management systems and procedures into the heart of their business processes will find themselves first in line when it comes to being paid, and being paid on time.

*David Taylor is Chairman and CEO of OnGuard.www.onguard.comPh: (02) 80197166

Streamlining your cash flowBy David Taylor*

By David Taylor

In today’s more risk-averse business environment, finance departments need to understand how the risk of non payment can affect the stability of their company. For many companies, their biggest asset is outstanding invoices, yet late payment and customer defaults are an unfortunate fact of life. But what steps can you take to ensure your invoices get paid, and get paid on time? Taking a proactive approach to managing debtors and bringing credit management into the heart of business processes can be key to keeping cash moving.

I – Nip bad debt in the budCredit managers are in contact with customers every working hour of every working day, and this close relationship effectively works as an ongoing customer satisfaction survey. The credit management department is therefore well positioned to spot any red flags indicating that customers are not in control of their


Credit Management

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Our primary focus is to deliver reliable and personal service to our Clients in contentious and non-contentious matters, on budget and on time, at minimal charge and commission free.

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Australia joined the ranks of a number of ailing European nations to record a sharp rise in business failures in the June quarter.

According to the D&B Global Business Failures Report, Australia recorded a 12.1 per cent increase in business failures in the June quarter – up from 4.1 per cent in the previous quarter – despite insolvencies around the world falling to their lowest levels in nearly four years.

Australia has now joined some struggling European economies including Hungary, Ireland, Italy, Portugal and Spain, with a sharp rise in insolvency risk.

According to Dun & Bradstreet CEO, Christine Christian, the rise in insolvencies may reflect knock-on, lagged effects from the 2008-09 global financial crisis as well as declines in business credit and relatively higher interest rates.

“There are a number of factors that

have been pointing to this for some time. We’ve been seeing data in Australia over the last four quarters showing that business failures have been quite elevated, certainly above levels seen in the 2010 financial year,” Ms Christian said.

“There are a number of unique factors which are driving the Australian result. The first is that although Australian firms were spared the worst effects of the global financial crisis because of the Government stimulus package, that’s now wound down and firms are feeling that.”

“Secondly, business-to-business payment terms remain very high at over 55 days on average. That is having a real cash flow impact on many firms around Australia.”

“Thirdly, we are seeing that for the manufacturing sector specifically, and for those who are exporting more generally,

Local business failures buck global trendAustralian insolvency levels trend upward as global rates fall

By Christine Christian*

➤


Credit Management

the high Australian dollar is having a significant impact as well.”

“Coming over the top of that is the fact that consumer sentiment is still quite subdued and so even for those firms that perhaps were doing quite well a year or so ago, declining consumer confidence is obviously having an impact, and that’s particularly an issue for the retail sector.”

According to the most recent D&B Business Failures and Start-ups Analysis, business failures rose 25 per cent during the June quarter to reach their highest level in 12 months. Preliminary 2011 figures indicate that the number of insolvencies is increasing year-on-year. If failures continue at this pace, they will easily exceed the 2010 figure of over 10,000.

These findings correlate with recent statistics from the Australian Securities and Investments Commission (ASIC) which showed that 2011 was shaping up as a record year for insolvencies, with almost 1,000 companies going into involuntary administration in July alone.

“Insolvency activity in Australia is up across all sectors, with a significant deterioration in retail and service sector failures reflecting subdued confidence. The highest failure rates at the local level were similar to those recorded internationally, with construction, services,

retail and the finance sectors averaging a 40 percent failure rate during the June quarter,” Ms Christian said.

“The reality is that the global economic recovery is running out of steam and outside the mining sector, sentiment is generally still poor.”

In advanced economies, business failures were down 5.7 per cent in the June quarter, with even sharper falls in the United States, down 10.8 per cent, and Britain, down 17 per cent. Among the emerging economies, China recorded

one of the highest falls in insolvencies, down 27 per cent, followed by South Africa, down 18.8 per cent. In Europe, Hungary recorded a 13 per cent increase in business failures, Ireland 27.9 per cent, Italy 12 per cent, Spain 12.3 per cent and Portugal 8.2 per cent.

According to the D&B Global Insolvency Index (GII), the first rating of its kind to rank business failures in more than 30 key economies, Australia now sits 23 points higher than the United States, 30 points higher than the United

D&B Global Insolvency

Index

Year on year change (%)

Q2 11Yr to Q2

World 92.7 7.3 7.1

Advanced economies 94.3 5.7 5.8

North America 87.5 12.5 4.0

Euroland 101.5 1.5 2.2

Nordic Region 93.5 6.5 8.7

Emerging economies (ex. China) 88.2 11.8 11.3

Emerging Asia (ex. China) 87.8 12.2 3.4

Eastern Europe 75.4 24.6 15.4

D&B Global Insolvency Index

Sources: National Statistics Data, D&B


Credit Management

Kingdom and on par with indebted Euro zone countries such as Italy, Spain and Hungary.

A rebound in the manufacturing sector, off the back of significant productivity improvements, has been a key driver behind the recovery in global business failures. Around the world, the number of business failures in the manufacturing sector fell more than 13 per cent year on year in the June quarter and by 15 per cent over the past four quarters. In contrast, business failures in Australian manufacturing have risen on average 60 per cent since the global financial crisis in 2008.

Services, construction, retail and manufacturing made up the majority of insolvencies in advanced economies during the June quarter. Service sector failures accounted for over one third of insolvencies and construction around a fifth. The performance of the services sector deteriorated compared with early 2011, with increased insolvency risk

anticipated in light of the weak outlook for demand in the United States and Europe. Retail was another poor performer, with failures in this sector accounting for 13.6 percent of all insolvencies.

“There is an increasing risk that the global economic slowdown will intensify the upward trend in insolvency levels. The global economic recovery is running out of steam. Downside risks to growth, including debt crises in Europe and the United States and volatility in financial markets, remain high,” Ms Christian said.

“With growth expected to remain

muted for the rest of the year, we are likely to see this further dent corporate profitability and payments performance, raising the risk of corporate insolvency.”

“In Australia, given our relatively favourable macroeconomic conditions, we expect lagged bankruptcies from the slowdown in 2009 to tail off, however, overall confidence remains weak and this could lead to an increase in business failures going into 2012.”

Christine Christian is CEO, D&B. www.dnb.com

“There is an increasing risk that the global economic slowdown will

intensify the upward trend in insolvency levels. The global economic recovery

is running out of steam.”

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


Credit Management

IntroductionSunGard conducted a survey of current practices and challenges around credit and collections in the Australian market at the 2010 AICM National Conference. The survey included 80 participants from a broad range of companies – including both global and domestic enterprises across 14 primary industries.

Over 70% of credit collectors stated that they are working in departments of 10 or less staff and 90% have 25 or less staff members.

Companies with a small ratio of internal collectors to customers often have difficulty determining which accounts to focus on and when and what type of treatment should be used.

The survey revealed the following as being top issues for credit departments in Australia:

z The top challenge reported was time to resolve open disputes, followed by an inability to score or analyse risk across the entire portfolio as well as disparate systems and processes.

z The top goal was to lower DSO/reduce past due accounts receivable (A/R) followed by a desire to improve the practices around credit risk analysis and to increase productivity across the team.

z Only 25% of the participants reported contacting the customer prior to the invoice due date in order to help expedite the collections process.

Challenges in managing the dispute cycleJust over 50% of respondents indicated that time to resolve disputes is a key challenge in managing the dispute cycle. A significant portion of the cost to invoice

customers and collect payment can be tied to the speed at which discrepancies and disputes are resolved. For many credit professionals, managing and quantifying deductions, disputes, charge backs and claims is difficult. Companies often use manual processes and associated data is poorly organised and references multiple documents. Resource constraints also make it difficult to process the sheer volume of disputes generated.

Disputes, deductions and charge-backs have always been a part of the commercial collection scene. However, it was the automation of the supply chain management function which not only ushered in the concept of just-in-time inventory but also created an explosion in payment deductions that, over the course of the 1980’s, turned disputes into a major credit management challenge.

Reducing dispute resolution cycle timeTo realise its maximum potential, rule-based resolution workflow must achieve a very high level of process definition. After all, the goal is end-to-end automation. A failure in any area essentially creates a detour from the prescribed dispute resolution road map that in some respect will necessitate traversing it manually. That slows things down, creates added opportunities for errors and breeds inconsistency in terms of both process and customer interactions. Some critical components that need to be incorporated within any rule-based dispute resolution workflow solution are highlighted below:

Automatic Notification of Dispute AssignmentsWhen one handler completes their task,

Market survey: Receivables in Australia Increased Focus on Dispute Cycle Time and Credit Risk Analysis

By Jim Mangano*

Jim Mangano


Credit Management

there is an automated pass-off to the next handler. In addition, some tasks may be handled automatically in the background such as notifications and electronic document retrieval. It is also vital that when necessary, task assignments be driven to a portal allowing for web-based access by customer service, sales and even customers. Rule-based dispute resolution workflow cannot be confined to just the credit or accounting departments.

Sophisticated Workflow is RequiredDispute resolution can become complex, with many different decision points, variables and routing scenarios. There must be the ability to map the workflow to these various scenarios including parallel paths. For instance, multiple disputes can be related to a single item (e.g. both

a pricing and quantity deduction taken on a single invoice line item) and in this case, there need to be parallel workflows. Multiple reason codes on a single item will require multiple resolution workflows. Another scenario requiring parallel paths occurs when no action is taken by a handler. ‘Action’ taken advances the process. ‘No action’ taken within cycle time parameters initiates a parallel process to ensure there are no delays in resolving open issues.

Defined Escalation PathsDispute resolution cycle time often extends when the workflow stops. A dispute may be automatically assigned and the owner notified. However, if the owner does not take action, what happens to the dispute? Ultimately

the dispute may just sit there until the customer complains or it ends up on a report of some type. In order to avoid this, it is prudent to create a matrix of escalation paths and reminders – first reminding the owner of the assigned dispute and then escalating the issue over time to the owner’s manager or potentially to another group.

Using a risk based collections approachThe second biggest challenge that credit managers identified is the assessment of risk across the credit portfolio.

The model is designed to predict the inherent risk of a customer, including the probability that the customer will become seriously delinquent, go to write-off or file for bankruptcy.

CHALLENGES IN MANAGING THE DISPUTE CYCLE

➤

DISPARATE SYSTEMS CAUSE DROP IN PRODUCTIVITY & RESULTS


Credit Management

Driving Internal Collection Results with Statistical-Based Credit ScoringIf your company has one internal collector for every 1,500 customers, how does the collector determine which customers they should focus on, what type of treatment should be used for a given customer, and when they should apply that treatment?

Typically, an accounts receivable portfolio will be reviewed on a periodic basis and segmented and sorted based on dollars and age of the amounts due. Collectors will use these ageing reports or ageing information in an automated environment to develop and manage their collection strategies and activities.

The early adopters of credit scoring focused on front-end analysis, making an initial credit decision or analysing a credit line. However, the survey indicated that the trend is changing. Often about 10% of a credit department’s time is spent on credit analysis and 90% is spent managing their customers and collecting money. This has resulted in more and more companies using credit scoring for their back-end analysis, thereby providing the basis for managing the day to day relationships with their customers, resulting in improved cash flow.

If 90% of the credit & collections department’s time and resources is spent managing the customer portfolio and collecting money, shouldn’t they be better allocating their time and more efficiently managing the company’s largest asset by applying risk based credit scoring as the basis for developing optimal customer management strategies?

The risk-based collection

methodology uses credit scoring to determine inherent customer risk and uses that risk level as the primary driver for determining collection strategies for the on-going management of the customer portfolio. Research has shown that the age of an account and the amount due are the wrong criteria to use if you want to optimise collection efficiency, improve DSO and reduce write-offs.

Disparate systems cause drop in productivity & resultsThe top goals outlined in the study pointed to improved results around DSO and past due A/R coupled with increased productivity and a more stringent approach to risk analysis. These areas are all impacted greatly by disparate systems. Something that will likely not change in the near future is the fact that most companies are operating with one or more underlying systems – mostly due to acquisitions. By implementing a single solution, companies can feed data from multiple ERP systems. In fact, some organisations will send feeds from fifty or more different systems – sometimes from multiple countries on a rolling feed around the clock.

Credit ExposureBy feeding all A/R data into one centralised repository, companies can not only gain improved controls and embed standards but they can also gain better insight into credit risk and more. For instance, some companies are not aware of overall risk because each business unit

assesses risk at an individual level. This situation creates a scenario where two business units could each extend credit to the same entity ultimately overexposing the company.

Best Practices/StandardsConsistent and stringent treatment of trade receivables can have a significant impact on cash flow and bad debt expense. With a centralised system, organisations can manage both at the global and regional level. Implementing standards that can be modified on the regional level as required will allow organisations to set forward global best practices without losing a regional approach.

An example of a global best practice would be to contact customers prior to the invoice due date in order to remind them that the invoice is coming due. In the survey the majority of companies only contact the customer after the invoice is due. Typically the number one reason given when a company is first contacted about a collections issue is that they did not get a copy of the invoice. A proactive approach offers companies the ability to send a gentle reminder while also improving customer service and satisfaction.

ConclusionOver the past few years credit and collections departments have moved into the spotlight as companies look to their receivables portfolio as a source of funds and start to view the portfolio as a valuable asset.

The 2010 survey revealed that the focus in Australia still remains firmly on reducing the time taken to resolve disputes and the ability to analyse risk reflecting the demands of the economy and companies as a whole. As companies move forward in an uncertain economic climate all areas of the organisation need to work together to improve processes and procedures throughout the organisation. By applying a strategic approach to collections, eliminating clerical tasks, detecting problem areas, and gathering the necessary data to produce detailed analysis, change can be instituted.

*Jim Mangano is Senior Vice President, Receivables Solutions, SunGard’s AvantGard.www.sungard.com/unlockyourreceivablesemail: [email protected]

BEST PRACTICES/STANDARDS


Credit Management

departmental specialists to articulate fully, but do they really justify doing the marginal deal instead of improving the process?

One of the challenges in any business is measurement, and measuring the impact of an individual or a process change on the business is something of a holy grail. Changes don’t happen in isolation and if you don’t identify the impact of a process change then you can’t measure it and you won’t understand its value or cost.

This is likely to be true even for people operating within a department who are close to the processes, and almost certainly the case for senior management removed from the day to day processes. It’s even more difficult for the most fundamental processes which are interdepartmental.

To illustrate the unseen value of improving processes let’s take a look at credit management again.

Let’s say a credit management function has been the subject of a successful improvement project. We know it has been successful because the DSO has come down, our cash flow has improved and we now need fewer collection resources. We measure the cost saving on resources and we might at a push identify the interest cost saving on the working capital improvement. Beyond this the improvements become less clear and more contingent. Let’s take a look at some other likely improvements:1. Bad debts have reduced and recoveries have increased2. Legal recovery costs have reduced3. Credit insurance premiums have reduced4. Customer complaints have reduced because our error rate

has dropped5. Credit note levels have reduced because we are identifying

problems more quickly and providing better information to operations

6. We are winning and retaining more business because we are easier to deal with.

7. We are able to attract better supplier and lender terms because our cash flow has improved

8. We are able to identify high workload customers and develop coordinated plans to deal with them with our operations colleagues

9. We are spending less on recruitment because morale and staff turnover have improved

10. We are developing people who can grow through the organisationThis is pretty powerful stuff and the list isn’t exhaustive, and if

we overlay this with similar improvements in other departments, Sales, Accounts Payable, Manufacturing, Finance, in fact right across the business the opportunities for improvement are massive. If only we are able to measure them.

Unfortunately the corollary to this isn’t so exciting, if we get processes wrong then the costs can be disastrous, our only consolation is we might not know it...

*John Carroll is the Principal of Carroll Risk Consulting a specialist credit risk and credit management consultancy. Email: [email protected], www.carrollrisk.com

Dollars & CentsBy John Carroll*

Most of the time business strategies revolve around revenue growth. The allocation of scarce management resources to this end often leaves other value creating activities without enough focus.

Margin improvement, overhead reduction and balance sheet efficiency strategies are only focussed on in earnest when the growth strategy fails or growth comes without profit improvement.

This leaves any focus on process improvements as a source of enterprise value growth way down the list for most companies.

If management teams were able to analyse where they could get the most bang for their management time buck and apply an opportunity cost model to their value creating activities we might see more balanced business strategies. This would in time create more efficient and competitive companies more able to withstand the inevitable economic and business lifecycle shocks and by extension create sustainable enterprise value growth.

So if we were able to allocate management resources in this new paradigm, maybe there would be time for a look at our processes with business strategy in mind, and for a look at the credit management function in more detail.

One of the benefits of improving working capital related processes is that in improving them we can generate positive impacts for many elements of a balanced business strategy. Improving credit management and collections processes will; 1. Reduce working capital requirements – leading to enhanced

balance sheet efficiency, 2. Reduce the costs of collection – reducing overheads,3. Improve customer relationships – assisting sales growth and

margin.We may contrast this balanced strategy improvement with

our revenue growth strategy by looking at taking on a new and marginal customer, one which say lies at the limit of our margin, workload and credit appetites, where we are likely to find:1. Increased working capital requirements2. An increased cost of collections3. A reduction in service quality to other customers as we

allocate resources to service this marginal customerLooked at this way the strategy choice seems pretty

convincing, but things are rarely this clear without the benefit of 20-20 hindsight. We often satisfy ourselves with justifications such as: “most of our costs are fixed so we can cost this new customer on a marginal basis”, or“this customer provides us with breakeven volumes”, or“we will enhance the margin with value added services” or“the shareholders want to see growth”all of which are very convincing widely offered arguments, and more readily digestible than a combination of balance sheet and business process arguments which probably require a range of


Credit Management

Veda’s Business Credit Demand Index*, reveals business credit enquiries recorded their fifth consecutive monthly gain since February this year. In June 2011, credit enquiries recorded strong gains over the previous quarter, up 17.4% and 3.6% year-on-year but still remain lower than pre-GFC levels.

Despite this strong quarterly upsurge, business credit demand for the 2011 financial year ended 0.5% down on FY2010. Veda analysis of credit enquires reveals current credit levels are about 8.5% below levels recorded in pre-GFC times.

“We are seeing a return to the use of credit in the business market, following a ‘paused period’ where businesses had brought forward credit decisions off the back of heavy government incentives following the GFC”, says Moses Samaha, Head of Commercial Risk at Veda Advantage. “Despite positive growth in the past five months, overall business credit demand has yet to return to levels prior to the financial downturn. Assuming we can move beyond the current market volatility, we should see growth in credit demand gather pace in the second half.”

Combined business loans and credit cards recorded strong gains, up 29.0% on the previous March quarter and up 12.6%year-on-year. Asset finance continued to show refreshed signs of improvement, increasing 10.3% since March 2011 and 1.6% year-on-year.

“As the banks look to drive activity in their business markets, we are seeing stronger results in credit demand for the June quarter”, said Mr Samaha.

Trade credit recorded a quarter-on-quarter increase of 15.7% but remained

flat year-on-year with 0.1% growth for the quarter.

“The trade credit figures signal that small-to-medium sized business, particularly start-ups and those in the retail trade sectors face increased vulnerability to fluctuations in market conditions. As the number of small businesses registering insolvent continue to rise, strong credit risk management practices are vital to protect cashflow. This includes proactively managing financial assets to maximise liquidity and to minimise the threat of taking on bad debt.”

Telecommunications credit recorded strong growth, increasing 17.7% for the full year but had a softer fourth quarter, up only 1.0% on the previous quarter and down 3.0% year-on-year.

“The weak year-on-year results in business demand for telecommunications credit is likely to have been caused by a slowdown in customer acquisition campaigns heading into the June 2011 financial year,” said Mr Samaha.

Detailed Business Credit Demand Index Results:All states recorded year-on-year gains for the June quarter. Of the major states, Victoria recorded the largest gain, up 5.0%, followed by WA 4.0% and NSW 3.3%. Queensland recorded the lowest gains of all states, 0.7%.

Business Credit Demand YoY z Business demand for credit cards

continued strongest year-on-year gains, up 53.8% and up 21.7% on March 2011.

z Business loans were up 9.0% on

Business Credit Demand Index -April-June 2011• Business credit enquiries up 17.4% on previous quarter and 3.6% year-on-year• Fifth consecutive monthly gain since February this year• Credit confidence yet to return to pre-GFC levels

By Moses Samaha*

Moses Samaha


Credit Management

July 2010, but up 27.6% on the previous March quarter.

z Combined business loans and cards recorded strong gains, up 12.6%year-on-year and up 29.0% on the March 2011.

z Asset finance increased1.6% year-on-year and up 10.3% since March 2011.

z Trade credit remained flat at 0.1% year-on-year but recorded a quarter-on-quarter increase of 15.7%.

State breakdown YoY: z The strongest gains of all states were

NT, up 11.3% and SA, 8.1%. z Victoria recorded third largest gain

5.0%, followed by WA 4.0%, ACT 3.4% and NSW 3.3%.

z Queensland 0.7% and TAS 1.9% has the lowest gains.

*Moses Samaha is Head of Commercial Risk.www.veda.com.au

DISCLAIMERVeda media releases are intended as a contemporary contribution to data and commentary in relation to credit activity in the Australian economy. The information in this article does not constitute legal, accounting or other professional financial advice. The information may change and Veda does not guarantee its currency or accuracy. To the extent permitted by law, Veda specifically excludes all liability or responsibility for any loss or damage arising out of reliance on information in this release and the data in this report, including any consequential or indirect loss, loss of profit, loss of revenue or loss of business opportunity.

Find your lost debtors onlineWe can help increase your collections revenue

Search our online portals, Mirus Online and VedaSearch, to quickly and easily locate your defaulting customers. With access to accurate and reliable data you can spend less time searching and more time collecting.

Contact us on 1300 188 393 or email [email protected] veda.com.au/peoplesearch

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Credit Management

Retention of title and PPSAIf you’re seeking to rely on a retention of title (RoT) clause, you may find yourself holding an expired ticket when it comes to enforcing your claim should the purchaser default and/or become insolvent.

Relying solely on ownership of (or title to) goods supplied as a common method of protection is rendered obsolete under the new Personal Property Securities Act 2009 (Cth) (PPSA). Suppliers may be left empty handed if they ignore the perils of non-compliance with the PPSA.

In many industries it is common practice for the seller to retain title to goods until payment has been received, even after the goods have been delivered to the purchaser. This legal entitlement usually arises in accordance with specific terms included in terms and conditions of trade known as ‘Romalpa clauses’ or ‘Retention of Title’ (RoT) clauses.1 Should the purchaser fail to pay for the goods, in today’s legal environment a well drafted RoT clause will enable the seller to regain possession of the goods.

However, this current method of protection will be outdated as soon as the new legislation comes into force, currently expected early in 2012.

There are five risky myths that could land suppliers with RoT agreements in hot water after commencement of the PPSA.

Myth 1: Complacency -I don’t need to register my security interest as the PPSA won’t affect my RoT agreements

THE FACTS:The PPSA will introduce changes to the legal nature and effectiveness of

RoT clauses. It will significantly overhaul the enforcement and priority rights of creditors relying on RoT clauses.

PPSA also introduces a new registration system for security interests. As a RoT agreement gives rise to a “security interest” under the new legislation, suppliers should register their interests created by RoT agreements on the Personal Property Securities Register (PPS Register) to adequately protect their interest in goods supplied.

A supplier of goods on RoT terms will have a super priority in the goods called a ‘purchase money security interest (PMSI) under the PPSA.2 The supplier must register their security interest in the goods as a PMSI in order to take advantage of this super priority.

This means that if there are competing security interests in the goods, the seller of the goods who has registered their PMSI will take priority. This means that if, for example, a purchaser grants security to a bank and later acquires goods subject to RoT, the supplier will have priority over the bank if they have registered their security interest, notwithstanding that the bank’s security interest may have been registered prior to the supplier’s.

Myth 2: False sense of security –I own the goods, so my RoT clause will give me priority over other secured creditors

THE FACTS:Under common law, because ownership stays with the seller a third party has no entitlement to obtain security over RoT goods. This is not the case under the PPSA.

5 Perilous mythsOn personal property protectionBy Karl Hill*

Karl Hill

There are five risky myths

that could land suppliers with

RoT agreements in hot water after commencement

of the PPSA.


Credit Management

The relevance of ownership is rendered redundant under the PPSA.

Under PPSA, it is possible for the purchaser to grant security over RoT goods to a third party, even though they do not own the goods. If the RoT creditor’s security interest is not registered as a PMSI within the required timeframe, the seller’s priority will be illusory and they will rank behind other secured creditors of the purchaser. Suppliers that do not register their interest risk being treated as an unsecured creditor, and losing their goods altogether.

Myth 3: Slow off the starting block –I’ll get around to registering; as long as it is done eventually I’ll be protected

THE FACTS:Putting off protection measures could see suppliers doing too little too late.

In particular circumstances, other creditors could have a better claim over RoT goods if their security interest is registered earlier in time.3

Furthermore, the PMSI super priority will only apply if the supplier registers their interest before the purchaser obtains possession of the goods4 and the registration states that the supplier’s interest is a PMSI.5

This timing issue will be significant at the outset of a trading relationship between a supplier and purchaser. In the case of ongoing trading relationships that commence before the introduction of the PPSA, the crucial time will be the first delivery made after the registration commencement time.

Myth 4: Waiting for the fall -Ownership of my RoT goods will not be compromised if the purchaser becomes bankrupt or insolvent

THE FACTS:If a purchaser becomes bankrupt or enters into insolvency administration, goods which are subject to an unregistered RoT will vest in the purchaser on insolvency or bankruptcy.6 In this scenario, it will be too late to register and the supplier’s security interest will be lost.

Myth 5: Enforcement stays the same -The PPSA won’t affect my ability to enforce my RoT rights

THE FACTS:Sellers with RoT clauses are no longer able to simply rely on ownership of goods to recover and retain goods on default.

A seller may be able to seize the goods supplied on RoT terms, but is not able to retain the goods, unless they are able to adhere to the procedures set out in the PPSA.7 These procedures include giving notice to the purchaser and any other secured party with a security interest in the goods that has higher priority.8 A person entitled to receive notice may also object to retention of the goods.9 In such instances, sellers will be

compelled to dispose of the goods and account for the proceeds of sale.10

Smart companies will have their terms and conditions reviewed and redrafted to take full advantage of the new enforcement methods provided by the PPSA.

Time is ticking and if you are a RoT supplier, your rights are about to significantly change under PPSA reform. Procrastination or denial about the effects of PPSA reform and simply relying on current RoT clauses, could see you lose all entitlement to goods when customers default under the new system. To best protect your RoT goods you must keep up with PPSA reform and be pro-active in correctly registering security interests. If your goods are worth protecting, then speak to an expert to adequately protect them sooner rather than later.

*Karl Hill, Results Legal Solutionswww.resultslegal.com.au FOOTNOTES:1 Aluminium Industrie Vaassen BV v Romalpa

Aluminium Ltd [1976] 2 All ER 552.2 PPSA, s 14.3 PPSA, s 21.4 PPSA, s 62(2)(b)(i).5 PPSA, s 62(2)(c).6 PPSA, s 267.7 PPSA, s 134.8 PPSA, s 134.9 PPSA, s 137.10 PPSA, s 140.

AICM & Simply EnergyGiving credit where credit’s due

About Simply Energy

Since 2007, Simply Energy has been providing fairer, hassle-free energy to over 300,000 homes and businesses throughout Victoria and South Australia.

Like our name suggests, we keep it simple. We don’t bombard our customers with bill or contract jargon, nor do we hand pass them over to automated phone message systems when they call.

We offer friendly, personal service and advice and remain committed to putting our customers first – always.

Simply Energy would like to congratulate Abdul Shafeel for being awarded the Young Credit Professional of the Year Award for the Victoria / Tasmania division.

Simply Energy fosters a learning environment by identifying opportunities for employee development and provides the support required to achieve exceptional performance.

To find out more visit

www.simplyenergy.com.au

Putting off protection measures could see suppliers doing too

little too late.


Human Resources

According to Vickie Jimenez, the author of “Champagne Thoughts & Caviar Power: The Science of Results Oriented Thinking”, in the future your skill set mastery will be more important than your actual position in an organisation. What does that really mean?

Today, more than ever, we are in a world where career pathways can be interrupted due to technological advances, the continued push for globalisation impacts organisational structures and as a result demands for specialisations continue to increase. Taking into consideration these impacts one has to consider what the future will look like in the employment space.

The UK Chartered Management Institute’s report Management Futures: The World in 2018 postulates that global business will experience a significant shift towards virtual community-based enterprises with business models and structures continuing to evolve in this fashion.

As organisations open up to the outside world and become more community-based they will also become more employee-centric and skill focused – especially those built on the productivity of talented employees.

In line with the above report, Vickie Jimenez suggests that one of the essential major organisational skills sets of the future will be Diversity Leadership & Management – “Understanding the need to lead a global generation workforce will be key to success as a Leader.“

“In some careers there will be up to four to five generations working together from boomers to generation 2020. Many will be from different countries and backgrounds, more than half of the work force will be women and there will be an increasing multicultural diversity throughout organisations. The capacity for leaders to manage this diversity will be a key organisational factor as we

begin to shift our mindset to the, “One People, One Planet, One Future” global community model.

A key reflection then is – “How is your organisation placed to deal with the shift to the global generation workforce and how does the current skill set strengths of your leadership team sit to address this change?” When considering this question it is not enough to look at what positions employees currently hold but rather the contribution they make to the organisational goals through their skill set mastery. Are your current leaders equipped with the diversity leadership skills needed to move the organisation forward to the 2020 frontier?

In our role as Consultants in recruitment and talent management, we are getting greater insights and understanding than ever before through a generation of candidates and clients who are prepared to articulate their reasons for workplace movement with the most frequent feedback being “lack of workplace engagement as being a major factor in their decision making”.

The shift from a position and career centric focus to skill set mastery and a diversity leadership model in the workforce is starting to grow wings in organisations that “get it”, but progress to this way of thinking still remains a ripple.

Candidates are more frequently making decisions to move from their current employment due to factors such as more challenging work in their area of expertise, the need for higher levels of engagement and alignment with the organisational goals and the capacity to be involved in diverse and exciting projects.

They are looking for strong leadership and high employer touch that focuses on the opportunity to develop and demonstrate key skill sets in an environment where they are individually recognised for their contribution.

It is within this context that we, the

Future workforce... Are your leaders ready?By Liana Gorman*

Liana Gorman – Managing Director, Credit Recruitment


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.

“The way I do business is to say I’ll pay you within 30 days... but it will more likely be six months”

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

Human Resources

market place, needs to challenge itself and ask – “are we responding to these needs in a way that will enhance our recruitment and retention outcomes, develop a robust, continually challenging and growing workplace environment and ultimately take efficiency and effectiveness outcomes to new levels of attainment?”

A starting point to better understand the current market paradigm in particular in the area of employee retention, is the recent 2011 Credit Recruitment Client Salary Survey which highlights that key factors around skill set mastery, employer/employee engagement and the provision of challenging and exciting projects for employees were largely unmentioned in employer responses.

To highlight this, responses by organisations around workplace retention incentives included:

z 65% offering flexible work hours – 61% in 2010

z 30% offering promotional opportunities – 46% in 2010

z 55% increasing salaries – 44% in 2010

z 38% offering work/life balance opportunities such as gym memberships/external study/additional leave programs – 33% in 2010

z 41% offering competitive bonus schemes (not surveyed previously)(Source: “Credit Recruitment Salary Survey 2011)

Clearly, when examining this market feedback, the need to focus on key factors around skill set mastery, employer/employee engagement and

the provision of challenging and exciting projects for employees is low on the radar of many employers in a shifting workplace that will increasingly demand such a focus

The opportunity for us is to become key catalysts for workplace change and to meet a new and rapidly expanding set of employee needs in which organisations become more employee-centric and skill focused has never been stronger.

*Liana Gorman – Credit Recruitment, part of the Rubicor Group.

www.creditrecruitment.com

“How is your organisation placed to deal with the shift to the global generation

workforce and how does the current skill set strengths of your leadership team sit

to address this change?”


Consumer Credit

Veda’s quarterly Consumer Credit Demand Index (CDI) shows consumer credit demand dropped 5.1% since March 2011 but increased 2.8% year-on-year in the April-June quarter.

Angus Luffman, Head of Consumer Risk at Veda said: “The April to June quarter closes out what has been a very soft financial year for credit demand. The data in the final quarter reveals some positive trends in certain types of consumer credit, but overall credit demand remains soft and is still behind on pre-GFC levels.”

Credit cards continue to record weak

growth, falling sharply from the previous March quarter to -8.9%. Year-on-year performance saw credit card demand post its second consecutive decrease of 1.2%. All states recorded quarter-on-quarter declines. South Australia recorded the sharpest decline, down 11.4% on the March 2011 quarter, followed by NSW, -10.5%, and VIC, -10.2%.

“The drop in credit card demand appears to be offset by a rise in consumer demand for debit cards. Other factors potentially contributing to the patchy growth in credit cards include: the impact of the new responsible lending laws on banks conversion rates; and the continuing ‘save not spend’ focus of consumers.”

Personal loans recorded their third straight quarterly increase year-on-year after 11 consecutive decreases dating back to the March quarter of 2008. Personal loans increased 6.9% since June 2010 but were down marginally by

Veda Consumer Credit Demand - April to June 2011• Overall credit demand falls 5.1% from March quarter and YoY growth is soft, up 2.8%• Credit card demand falls sharply from the March quarter, -8.9%• Mortgage Applications post 6th consecutive quarterly decrease, down 10.8% YoY

By Angus Luffman*

“The drop in credit card demand appears to be offset by a rise in consumer demand for debit cards.”

Angus Luffman

Table1. Changes in Consumer credit demand year-on-year

CHANES ON PRIOR CORRESPONDING PERIOD (YOY)

% YoY

(Apr – Jun 2010)%QoQ

(Jan – Mar 2011)% FY July 2010 –

FY June 2011

Credit Demand 2.8% -5.1% 1.6%

Credit Cards -1.2% -8.9% 0.8%

Personal loans 6.9% -1.1% 2.4%

Mortgages -10.8% 6.3% -17.2%


Consumer Credit

-1.1% on the previous quarter. Of the major states, WA posted the strongest year-on-year increase in personal loans, up 8.2%, followed by Queensland, 7.6%, NSW, 7.2% and VIC, 6.8%.

“We are now seeing a trend where those states that once recorded weak results, such as Queensland and SA, are now matching the strength of states such as NSW and WA. Over the life of the Credit Demand Index, personal loans have been a lead indicator in overall consumer credit demand. Signs of continued, renewed growth across all states will be a trend to watch in the near term”, said Mr Luffman.

Mortgage enquiries declined 17.2% over the period of July 2010 through June 2011. Applications for mortgages decreased 10.8% in the June 2011 quarter compared to the same time last year, posting their 6th consecutive quarterly decrease. The current June quarter however, declined at the lowest rate out of the past six quarters, recording a 6.3% increase since March 2011.

All states recorded year-on-year decreases in mortgage demand. Of the major states, Queensland recorded the sharpest decline of -18.4%, followed by WA, -11.7% and VIC, -11.4%. NSW recorded the smallest decline amongst all states, down -5.0%. In contrast, quarterly performance results show all states except Tasmania recorded gains on the March 2011 quarter, with NSW leading at 7.7%.

“The contrast in the yearly and quarterly performance results suggests there is a leveling in mortgage demand, as year-on-year declines are beginning to slow and quarter-on-quarter results show signs of growth”, said Mr Luffman.

*Angus Luffman is Head of Consumer Risk.www.veda.com.au

DISCLAIMERVeda media releases are intended as a contemporary contribution to data and commentary in relation to credit activity in the Australian economy. The information in this article does not constitute legal, accounting or other professional financial advice. The information may change and Veda does not guarantee its currency or accuracy. To the extent permitted by law, Veda specifically excludes all liability or responsibility for any loss or damage arising out of reliance on information in this release and the data in this report, including any consequential or indirect loss, loss of profit, loss of revenue or loss of business opportunity.

Table 2. Changes in Credit Card demand year-on-year

CREDIT CARD DEMAND APRIL – JUNE QTR 2011

State % YoY (Apr – Jun 2010) %QoQ (Jan – Mar 2011)

Total -1.2% -8.9%

NSW -2.7% -10.5%

VIC -0.5% -10.2%

QLD -4.1% -6.1%

WA 8.6% -5.1%

SA -3.0% -11.4%

NT -1.2% -8.3%

ACT 10.3% -6.8%

TAS -3.5% -4.6%

Table 3. Changes in Personal Loan demand year-on-year

PERSONAL LOAN DEMAND APRIL – JUNE QTR 2011


Total 6.9% -1.1%

NSW 7.2% -3.2%

VIC 6.8% -1.4%

QLD 7.6% 0.8%

WA 8.2% 1.8%

SA 3.1% -3.0%

NT 5.1% -0.6%

ACT 7.0% 1.9%

TAS 1.7% -1.8%

Table 4. Changes in mortgage enquiries demand year-on-year

MORTGAGE DEMAND APRIL – JUNE QTR 2011


Total -10.8% 6.3%

NSW -5.0% 7.7%

VIC -11.4 7.4%

QLD -18.4% 4.8%

WA -11.7% 6.0%

SA -9.6% 3.2%

NT -16.9% 1.5%

ACT -7.5% 6.7%

TAS -14.0% -2.3%


Consumer Credit

to deal with unfair terms in consumer contracts for financial products and services;

5. Provides a single set of definitions and interpretive provisions;

6. Creates a national law on unfair contract terms;

7. Provides a single set of provisions regarding unfair practices and fair trading;

8. Provides national consumer guarantee provisions;

9. Creates a national regime for unsolicited consumer agreements and rules for lay-by agreements;

10. Provides for a new product safety legislative regime; and

11. Creates new provisions relating to information standards applying to goods and services.

Unfair contracts:One of the changes is a new national law dealing with unfair contract terms in standard form consumer contracts. It is found in Part 2 of the ACL (Schedule 2). It applies to the activities of all businesses in Australia, whether or not they are a corporation.

Standard form consumer contracts:A consumer contract is a contract to supply goods or services, or to sell or grant an interest in land, to an individual wholly or predominantly for personal, domestic or household use or consumption. A standard form contract is typically one that has been prepared by one party to the contract and is not subject to negotiation between the parties. The law does not apply to insurance contracts subject to the Insurance Contracts Act 1984 (Cth).

TEST:A three part test is to be applied by the court to determine if a term in a standard form consumer contract is unfair:1. The term must cause a significant

imbalance in the rights and

obligations of the business and consumer who are parties to the contract;

2. The term must not be reasonably necessary to protect the legitimate interests of the party that would be advantaged by it;

3. The term must cause detriment if it were to be applied or relied upon.The court must also consider how

transparent the term is and the contract as a whole.

EXAMPLE:An example of a term that might be considered unfair is one that permits, or has the effect of permitting, one party, but not the other, to terminate the contract. If a business is allowed to cancel a contract at will, without it being reasonably necessary to protect the business’s legitimate interests, perhaps in response to an inconsequential breach of contract by the consumer, then it may be considered unfair by a court.

WHAT TO DO:Businesses may continue to use standard form consumer contracts but if a term in a standard form is found by the court to be unfair then the term will be void and the court may make a declaration that the term is unfair. Once such a declaration is made, the court may award other remedies, including an injunction and damages. It would also be a contravention of the ACL to continue to use or rely on the term. If a contract can continue to operate without the unfair term it will remain binding.

Business clients should review the terms of their standard form consumer contracts and decide whether or not they need to be revised in order to reduce the risk of any term being held to be unfair.

*Roslyn Diesner is Senior Associate, Dispute Resolution and Litigation Services, MacGillivrays Solicitors.www.macgillivrays.com.au

What is unfair under the new Australian Consumer LawBy Roslyn Diesner*

Roslyn Diesner

The aim of the Australian Consumer Law (“ACL”) is to provide a single, national law regarding consumer protection and fair trading to replace the myriad State, Territory and Commonwealth laws in this area.

The reforms have been passed by the Trade Practices Amendment (Australian Consumer Law) Acts (No. 1) and (No. 2) 2010. All state and territory governments have introduced application legislation to apply the entire ACL in each of their jurisdictions.

What do the new laws do:1. Change the name of the Trade

Practices Act 1974(‘TPA”) to the Competition and Consumer Act 2010 from 1 January 2011;

2. Insert the ACL as schedule 2 to the Competition and Consumer Act 2010;

3. The ACL will be administered by the Australian Competition and Consumer Commission (“ACCC”) and each State and Territory’s consumer law agency;

4. Has amended the Australian Securities and Investments Commission Act 2001 so from 1 July 2010 the ASIC will administer new law


Credit Insurance/Risk

These days as I look over the number of credit insurance claims NCI have been receiving in the last 12 months, I reflect on my many years as a credit manager and how things have changed.

In times gone past, a slowdown of payments indicated possible financial difficulty ahead. There was usually time to be paid and exit, before failure occurred a few months later. Unlike the old days, the typical claim today doesn’t show a deteriorating payment pattern.

Many claims appear to be established clients making payments at 30 to 45 days. At this point payment may not be forthcoming, but within a short period of time an Administrator is appointed and it’s all over.

The failures are due to the same old reasons and many credit managers and CFO’s probably don’t realise these are very difficult to predict. Reasons include the financial implications of:

z Lack of sales and low margins due to industry downturn

z Inadequate financial reserves or lack of capital

z Large loss on a project/s due to

a whole range of circumstances particularly under-pricing to win work

z Actions by the ATO z Ceasing of financial support from

bankers and financiersAt NCI, we also see failures as a result

of unforeseen personal circumstances in smaller businesses such as:

z Death z Protracted health issues z Gambling problems z Marital breakdowns

When you sit on the broker’s side of the desk looking at how to assist your clients to avoid bad debts, it becomes quite apparent there are a number of causes of bad debts which are totally unavoidable from a credit manager’s perspective.

I have yet to meet a credit manager who opens an account for a customer knowing they won’t get paid. Nobody transacts business with a customer anticipating no payment. However, everyone has bad debts from time to time and the best risk management tool will always be insurance to share this risk.

Future expectations of claimsWe definitely have a two speed economy with mining and resources keeping many industries going. For business not benefiting from the mining boom, the

challenges are not ahead, they are here now.

Having recently met with credit insurers, the expectation looking forward is for claim numbers to increase. Potential liabilities have increased (seriously overdue, repayment plans etc.) as are claim provisions.

The insolvency numbers are at record levels according to ASIC in the last few months and insurance claims can be expected to follow this trend for the next few months.

The industries which appear to be delivering the majority of claims are:

z Building/construction z Paper/printing z Electrical z Steel z Retail

Business confidence is low, there are global and local pressures on banks, the ATO is active, building/construction is at very low levels, retail is suffering and tourism, exports and manufacturing are all under pressure from a high Australian dollar.

Hold on tight we have a bumpy road ahead for at least the next six months.

Terry Duffy is General Manager (Northern Region) NCI (Brokers) Pty Ltd. www.nci.com.au

Claims, claims andmore claims likely

In the last 12 months NCI have received over 900 claims, with a clear upward trend.

Terry Duffy

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


queensland

Dale Hannan – YCPA QLD WinnerEvery year, each state across Australia showcases their finest young talent on stage to compete for the Young Credit Professional Award sponsored by D&B. In a process even Johnny Young would be proud of, each candidate is interviewed and ultimately selected by a panel of Senior Credit people and a representative from Dun & Bradstreet. This process sets a standard of conformity across each state to find that star performer under 30. These contestants are not just ordinary members but great ambassadors for the younger members for the AICM. This year’s state finalists are Dean Young (NSW), Abdul Shafeel (VIC), Maree Kairl (SA), Kirsty Shrigley (WA) and Dale Hannan (QLD).

The Qld Division winner is self employed and at just 29, this is the second time Dale has taken out the Qld trophy and he is planning on going one step further this year to take out the big one – the National Award. Dale’s company, Quantum Credit Management (Aust) Pty Ltd is a Mercantile Agency that he started at just 25.

After being a member of the AICM for more than 4 years now, I decided to sit down with Dale over a coffee to see why he works in his chosen field of credit and what really motivates him to achieve.

Dale, congratulations on your award, how does it feel to win Qld Division?Thanks Vanessa. It’s really a fantastic feeling to be recognised by your industry peers. There really isn’t many other industry specific organisations that recognise their younger members so it really is humbling and exciting.

What attracted you to credit as a career?I didn’t actually plan to work in credit, I sort of fell into it as I think a lot of other credit people have. When I was 19 I was working as a temp with GE in Brisbane. I was hired to file documents for a month in the loss recoveries section of the business but after a couple of weeks a Team Leader literally grabbed me and stuck a headset on my head with the dialer running. After a few errr, lets say ‘awkward’ calls I got used to the abuse from the debtors and started to enjoy it! After that I was transferred to their Sydney office and my career really started to take off. In the end, I really saw that credit was such a large part of any business and really wanted to absorb more of it. I left GE and went to work for a Mercantile Agency. Since then I’ve contracted to credit departments, been a Credit Manager, worked in London and started my business in

QLD YCPA winner Dale Hannan and YCPA dinner guest speaker Angry Anderson.

Queensland Young Credit Professional of the Year Dale Hannan.

2007 so from my point of view, there is definitely a career in credit and from that perspective it really attracts me.

Why did you become a member of the AICM and how has it helped you?I first became a member of the AICM when I was working as a Credit Recruitment Consultant. I had previously been to a couple of Credit Focus nights and found them to be very informative and a little scary as I didn’t know anyone and had never been to a networking function. After a while I found that I had made a few friends and built up my confidence when speaking with people. In the end I made many great friendships along the way and met some amazing people that really inspire me. I now rely on the AICM to keep up to date with industry changes and it’s a great way to market not only myself but my business as well. I really do think the AICM does a lot of important functions for the credit industry and members. Although the AICM has helped me, I’ve always believed that it’s important to give back what you have taken so when I was asked to consider being on Council I jumped at the chance. All of the Councillors donate their time for free to run the state divisions and bring to the members great speakers and informative networking nights. After spending 2.5 years on Council, the camaraderie is amazing.

What does credit mean to you?Credit to me really is the core or heart of any successful business. Credit is fundamental in producing cash flow, maintaining customer relationships and monitoring risk. I was asked this question during my YCPA interview and I responded to the judges using an analogy likening any business as a human body. Production could be seen as the arms and legs of the business, the brain being sales, blood being cash-flow and the heart being credit ensuring there is enough blood (or cash flow) flowing around to make sure all other ‘departments’ can keep working.

How has the AICM helped you?The AICM has helped me in so many ways. In fact, I don’t think my career would be as successful without the AICM. It has assisted me to improve my confidence when meeting new people, which in turn, has allowed me to get out of my comfort zone and market my business better. Obviously the credit focus nights are very useful to stay informed about legislation and industry news. I’m also currently studying my Certificate IV in financial services with AICM to continue to develop professionally.



David Maczek (Debtor Software Solutions); Brendan Waghorn (Freedom Fuels), Bill Lumchee (Sargent Truck Rentals); Robert Lietzow

So where to from here?Obviously I want to win the National YCPA trophy!! Long term I’m going to keep working on improving my business and finish my Cert IV next year. Civil Litigation and insolvency has always been my main interest in the mercantile field so I’ve decided that next year I will be enrolling in University to study Law part-time. It’s going to be a big challenge but I’m ready for it. I’ve also got quite a few other plans up my sleeve.

The Queensland Division wishes Dale the best of Luck in his endeavour to win the National Young Credit Professional Award at the National Conference in Melbourne.

– Vanessa HartwellQLD Councillor

queensland

Veda group with Gary Forest (Veda) (center) and guests.

Amy Maczek (AEIOU Foundation); Peter Hudson; Duke Myrteza (Forbes Dowling); Steve Semmens (Semmens Executive Recruitment)

Wincollect Team – Brendan Doherty (Wastecorp); David Kenavan (Wincollect); Alan Dean (Lifeline); Leigh Smart (Powerconnex).

D&B team – Murray Walters (right) with Guests.

The Australian Institute of Credit Management Queensland welcomes the following

organisations as our sponsors for 2011

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

Presidents ReportWe have had a busy few months for NSW, firstly the fantastic YCP evening that was held to celebrate this year’s finalist and to announce our State winner, congratulations to Dean Young, and as always we know you will do us proud at the Nationals!

Gregg Odlum and the National Office did a fantastic effort in arranging and managing the evening, again also thanks to Dun & Bradstreet for their ongoing support to such a great event, and some wonderful young credit professionals.

We also held our Annual AGM for NSW, and I have to say that our results for the year were strong, with increased sponsor support and an increase with our new membership base, which is a positive for all as it opens up our events, training and overall exposure to a new range of people, also allowing for greater networking and sharing of ideas and knowledge…..particularly the “new generation”……although they can learn from us, we can also learn so much from them. So please continue to support this growth through the Employer Membership Discount Programme, as the long term effects will benefit us all.

In August we held a Trivia Night at Parramatta for the first time in a number of years. The evening was a great success, the venue was fantastic, and although mostly credit related trivia, with a few silly bits thrown in….I think everyone had a great time. I would like to thank the event supporters for the evening who generously donated prizes; Trace Personnel, AICM National Office, Ecolab, Careers Multilist, Vanessa Graydon & Skipton’s Café.

It would also be a good time to announce the NSW Council for the next term, they are;

Grant MorrisVanessa GraydonNick PilavidisChristina Aleksoska

Ian SmallmanArthur Tchetchetnian Gregg OdlumSam PearlmanSusan DayThese people represent the interest of the NSW AICM, so please feel

free at any time to contact any of us, as that is what we are here for. We would also like to thank our three retiring members for all their assistance over the last term;

Marle Ambrose, Jill Hart and James van Poppell.

AICM Trivia Night – August 2011The Accounts Receivable team were fortunate enough to be invited to attend the annual AICM Trivia Night which was held at the Rydges Parramatta on Tuesday 23rd August 2011. The evening started really well with our chosen team name “The BFF’s” until we realised that NSW Councillor Gregg Odlum would not be part of our team.

We were all hoping that not all questions related to the credit industry – thank goodness for the bonus questions relating to TV Personalities, Famous People and Google. We got them all correct which helped with our final tallies. The “BFF’s” went in as underdogs BUT as we all know, in many sporting fixtures, the Underdogs always come back with a fight. Suffice to say WE WON and we all had a great evening.

I think more attention to the AICM Magazine would help in continuing with our success in future years.

– Anne Di Maria, Ecolab Pty Ltd

Ian Smallman, Christopher Hayes, Carlie Brown at the YCPA Dinner.

Vanessa Graydon (NSW President) with NSW YCPA Finalists Dean Young, Bassam Sleiman, Daniel Taylor.

Debra Swales, Peta Brown, Treacy Sheehan at the YCPA Dinner.

YCPA Guest Speaker Angry Anderson and YCPA Coordinator Gregg Odlum.



new south wales

EAT The Industry

Parmesan Canapes w/- Roasted Capsicum

By Luke Kinnear, Credit Analyst Supervisor, Ricoh Finance

This would have to be one of my favourite recipes for Canapes when entertaining, whether it be for a small group or a large party. The best part is it’s quick and easy to prepare and it’s a taste sensation that leaves people impressed with your culinary skills!

Ingredients:

The Australian Institute of Credit Management New South Wales welcomes the following




Method:If you have time you can do the capsicum as follows or if you rushed a jar of good quality marinated roasted capsicum will do the jobPre-heat oven to 200°C or 180°C fan-forced.

Place capsicum on a flat baking tray, bake in preheated oven 30 minutes or until skin blisters. Place in large bowl, cover with cling wrap and cool. When capsicums are cool enough to handle peel off skin and discard seeds, slice capsicum and mix with remaining ingredients in a large bowl.

Reduce oven heat to 160°C or 170°C, line a tray with baking paper. Form the grated Parmesan in loose ball space evenly apart as you would for cookies, place in the oven for 10 minutes or until flat like biscuits. Remove and allow to cool. Place slices of capsicum on each of the parmesan biscuits and sprinkle with Nigella seeds and serve. You could use variation of capsicum like eggplant or sun-dried tomatoes.

Buon appetito! Goes great with red wine!process.

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

z 250 grams grated Parmesan (Reggiano or Grana Padano)

z Nigella Seeds z 4 red capsicums z 2 cloves garlic, sliced thinly z ½ cup fresh basil, torn

z 2 tablespoons extra virgin olive oil

z 1 tablespoon balsamic vinegar

z Freshly ground black pepper and salt to taste

Team Coates, runners up at the NSW Trivia night. From left to right: Grant Morris CCE, Denise Kritikakis MICM, Sev Indrele MICM, Kathy Neale MICM, Penny Dobson MICM all Coates Hire, Treacy Sheehan MICM (Trace Personnel), Nadine Bucher (Bing) and Max (Coates mascot in the middle).

Team Ecolab, winners at the Trivia night. From left to right: Nicole Chesher (MICM), Arian Jaramillo (MICM), Robyn Whitehouse (MICM), Kylie Azzopardi (MICM), Helena Spicer (MICM), Kelly Johnson (MICM), Anne DiMaria (MICM) all Ecolab and Treacy Sheehan MICM (Trace Personnel & event supporter).

Electrolux team at the Trivia night. From left to right: Wycliffe Owiti MICM (Electrolux), Joanne Baumgartner (Trace Personnel), Eileen Neave MICM, (Electrolux),Michael Murray MICM (Electrolux), Avril Cook MICM, (Electrolux), Jennie Barclay-Smyth CCE (Electrolux).



new south wales

NSW Milestones

Bob Taylor AICM, 25 years membership 1986-2011

Firstly I would like to thank AICM for their acknowledgement of my 25 years membership.

The challenges have been many but at the end of the day my Membership with the institute has made it possible to stay up to date with current changes to Legislation, Privacy, Credit Practices and Credit trends.

Where was I when I joined The A.I.C.M.? Mmmmmmmmmm It was 1986 and I was The Credit Manager for GEC Electronics at Nth Ryde, I had a staff of 2 and was responsible for 5 Divisions, nationally. Video, Electronic Components, Robotics, Marconi Instruments, Communications (fax machines) and Defence which made for many and varied types of customers. I often travelled interstate to visit our local offices in Melbourne, Brisbane and Canberra, generally to sort out account and credit issues.

I remember it was a time of affluence. Guys in WA were buying remote submarines to check the underneath of their yachts. Video Cameras that were so big they sat on your shoulder, were the new toy and all the rage. I also remember POL Air dropping in one day to buy the latest video camera for their aerial surveillance work. They paid cash too, around $12,000.00. 1986 dollars!

Everybody wanted a fax machine in those days as it was new technology which superseded the telex machine, (thank goodness). This was the first time I had seen a desktop computer being used as a separate accounting resource, it ran Lotus 123 and we all thought it was amazing. The dollar was strong against the yen back then, as most of our equipment came out of Japan, business was good.

During my career I have work in many varied industries such as Finance, Electronics, Construction and Computers. My start in Credit was purely by accident. I remember when I had got back from travelling in the mid 70’s I really needed to get a job fast. I saw an ad for a field Collection Representative at Associated Securities Finance, Parramatta Head Office. To become a field Rep you had to be a registered Sub Commercial Agent at the Local Court House which I managed to secure, thankfully as you needed to have no criminal record.

Primarily I was directed by the Credit Officers or the Legal team to call on consumer customers who had defaulted with payment, serve summonses and garnishees, while actioning any required repossession. Back in those days Consumer’s rights were very different to now. Repossessions could be ordered even though a majority of the Hire Purchase contract had been paid - ownership did not pass until the full amount has been settled. The Finance Company had the right to auction off goods including cars, caravans, TV’s, stereos while the consumer was liable for any shortfall. How things have changed!

After a time it was evident that life on the road could be difficult and dangerous and so I decided to apply for an office job at BBC Hardware, at the then Parramatta Head Office. I applied myself and was eventually promoted to Assistant Credit Manager which eventually led me to the Management position at GEC Electronics, when I applied for and was accepted as a member of the AICM.

Other Credit Management roles followed at HiSoft Computers and Metromix Concrete.

What am I doing now? I have been at Hannanprint for the last 15 years as Credit Manager.

In that time I have seen many changes including mergers, demergers, new computer systems, the introduction of the GST and more recently the PPS legislation.

Nothing stays the same. Hannanprint is undergoing further changes with the purchase of a new factory at Warwick Farm along with new machinery – a total investment of $90m. The upshot is Hannanprint will become one of the most advanced Print sites in the country.

I’m sure the challenges will be many as we move out of our Alexandria premises and into Warwick Farm over the next year. Coordinating Credit Approvals at the two sites will be challenging but as we have installed strong Policies and Procedures, problems should be kept to a minimum.

Thank you again for the opportunity to be in the AICM magazine for the first time and for the acknowledgement of my

25 years and by the way, wish me luck for the CCE exam.

Sam TestaJoined August 6, 1991 and has just clocked up 20 years.

1. “What were you doing when you first joined the AICM?”My company, Cheque Recovery Services, and young family were growing back in ’91. At the time, my wife and I had just received the news that our second child was on the way. So after the initial celebration/freak-out had passed, my mind focused on expanding the business from a one-man-band to a fully-fledged debt recovery agency.

2. “Where has your career taken you and what roles have you had?”My career started primarily with Ford Credit, from being a “Repo Man” to Collection Manager. It was 7 wonderful years which

taught me a lot in the credit area. I held senior positions with other agencies, including two years with Telecheck. I decided to bite the bullet and branch out on my own, and established Cheque Recovery Services being a licensed Commercial and Private Inquiry Agency.

3. “What are you doing now?”It’s great that at this stage of my life where I can sit back and enjoy the fruits of my labour, but I still have that burning desire to make good in the world by achieving the best possible debt recovery outcomes for my clients. Since the GFC we have been very busy expanding our business and coming to hear just about every story in the book “why the debt is not paid” It’s not lost on me that the onset of new media has paved the way for an entire new generation of communication. In a world where everyone can Google just about anyone, in the private investigation/financial service world, it’s about outsourcing. If you’re someone who can put a line through somebody’s Things To Do, and deliver a quality service, you’re halfway there. That said, I always have one eye on maintaining day-to-day operations and the other on investigating new business ventures. If an old fella like me can figure out how to use Facebook, there’s no telling what the new breed of credit executive baby boomers are capable of!



new south wales

DARE TO INSPIRERecognising the NSW No 1 Credit Team

AICM is pleased to announce that Veda is again the Event Supporter of the 2011 Dare to Inspire and Aspire Programme to recognise the No. 1 Credit Team.

The objective of this award is to acknowledge the qualities, skills and achievements of Credit Professionals in a team environment. AICM NSW aims to provide further opportunities to develop the Credit Professional and their Team.

The award provides the Credit Manager with the opportunity to develop their Team within a stimulating medium as well as allowing their Team to communicate that which Inspires and Aspires them both individually and as part of a team.

OBJECTIVE OF THE PROGRAMME z Build team spirit z Recognise team and individual performance zDevelop personal presentation skills z Recognise key achievements z Encourage team involvement

WHO IS ELIGIBLE? z Any team working in credit z A company or business may enter any number of teams z The team may be of any size however a maximum of 6 members may present to the judges

zMembership of AICM is not a prerequisite z Previous winning teams may not re-enter for a period of 3 years

z All nominations must be confirmed by the entrants Credit Manager, Financial Controller or Director

SCOPE OF THE PRESENTATION z A 20 – 30 minute presentation covering as a minimum team structure, organisation fit, key results and achievements and general management

z The presenting team is limited to a maximum of 6 members of the Credit Team

zNo team member may deliver more than 40% of the presentation

z A 1 hour team review and judging session (Q&A) by the judging panel where all team members may attend.

ADJUDICATION z The judging panel will receive all presentations and review all teams

z The judging panel will comprise a representative from Veda and two senior Credit Managers selected by the AICM

FINALISTSTeams selected as Finalists will be invited to attend the ‘No 1 Credit Team of the Year’ dinner to be held on Wednesday 23 November 2011 at Rydges Hotel, Rose Hill where the winner will be announced.

THE WINNING TEAM WILL RECEIVE z Increased professional company profile z $2,000 in AICM services including Professional Development Seminars, network meetings and dinners

z A $100 gift voucher for each presenting member of the winning team

z 1 year complimentary AICM membership for each presenting member of the winning team

z Publicity and recognition in the AICM magazine

2010 Credit Team Winner ELECTROLUX

Nominations must be received by AICM, no later than Monday 31st October 2011. Judging will take place early in November.



south australia

SA YCP Awards NightOn the 24th of August 2011 the South Australian division of the AICM had its awards night to announce the state finalist of the Young Credit Professional of the Year.

The night was held at the Rob Roy Hotel, and everyone had a fabulous time. A big thank you to Bickford’s and Vok Beverages for their kind donations to the raffle held on the night, with money raised to be used at our next social networking night. We also welcomed a number of new members into the AICM on the night;

z Eugene Engelbrecht – Walker Stores (Pty) Ltd, z Maree Kairl – National Credit Insurance (Brokers) Pty Ltd, z Anna McIntyre – O’Loughlin’s Lawyers, z Rachel Price – Australian Credit Management Pty Ltd, z Shane Sankey – Wallmans Lawyers, and z Kate Verrusio – Australian Credit Management Pty Ltd.

Gail Watt received her pin for 5 years of membership, and Trevor Goodwin received his pin for 15 years. In addition, Anne Wilkins was re-certified with her CCE. Congratulations to Anne!

This year South Australia had eight finalists in the running for the Young Credit Professional of the Year award; a great result! And the level of knowledge held by each candidate was of the highest standard.

The state finalists were: z Shane Sankey from Wallmans Lawyers. z Piero Gross from National Credit Management. z Maree Kairl from National Credit Insurance (Brokers). z Marcelle McEwan from Lynch Meyer. z Leandra Hyde from Australian Credit Management. Leandra is based

in Darwin and was unable to attend. z Jacqueline McPhail from Australian Credit Management. z Diana Lee from Australian Credit Management. z Benjamin Maliszewski from National Credit Insurance (Brokers).

There could only be one winner however, and Cherylee Harris of Dun & Bradstreet announced Maree Kairl of National Credit Insurance (Brokers) Pty Ltd as the 2011 Young Credit Professional of the Year for South Australia. Dun & Bradstreet have always shown unwavering support of the Young Credit Professional of the Year awards, and we were pleased to have their South Australian State Manager, Cherylee Harris, there to present Maree with her award. Maree will now go on to represent South Australia at the National Conference in Melbourne. We wish her all the very best!

Credit Focus group.Credit Focus James Neate & James Devonish.

z Benjamin Maliszewski

z Diana Lee

z Jacqueline McPhail

z Leandra Hyde

z Marcelle McEwan

z Maree Kairl

z Piero Gross

z Shane Sankey



south australia

Credit Focus August

Personal Properties Security ActThe August Credit Focus was an outstanding success with a very high attendance record of 45 Credit Professionals all eager to gain as much information as possible about the upcoming PPS Register which is due to commence early in 2012.

James Neate & James Devonish of Lynch Meyer delivered an easy to understand presentation of the PPS Register and how it will affect the way we conduct our business transactions of the future. Several detailed examples were given which provided an excellent opportunity to examine how the PPS Act will redefine the basics of ownership & priorities together with the necessary steps required to protect our retention of title arrangements.

The feedback forms were all positive and very high in praise. Scores were in the 4s and 5s with the overwhelming majority being 5s. A lot of comments were made by the participants that they now have a far better understanding of the workings of the PPS Act and of what is now required of themselves as the “go live” date approaches. Some did say, however, that they may still need a bit more coaching.

– Lyn McKell MICM

Network Night – JulyGreat venue! Intimate, indoors and outdoors – with a balcony overlooking Pultney Street. The Coopers Ale House’s Maxwell Cooper Room certainly set the scene for a terrific AICM Networking night held on Friday 29th July 2011. The venue was packed to the brim with colleagues networking, mingling and laughing – catching up with new and old friends. You could feel the ‘buzz’ in the air! It was great to see

Networking Nigel Hilllier & Shane Sankey.

Networking SA Councillors Lindsay Chuck & Lyn McKell.

Networking Piero Gross, Marcelle McEwan & Anne Wilkins.

The Australian Institute of Credit Management South Australia welcomes the following organisations as our sponsors for 2011



Networking Abby Poyzer, Jeff Phillips & Gail Crowder.

the young credit candidates of present and past getting involved. A very special thank you to our raffle donors, Hackney Hotel, Haigh’s Chocolates, Bracegirdle’s house of fine chocolate, Hills Holdings and Quick Corporate Office Supplies. Congratulations to the lucky winners and we hope you are enjoying your prizes.

– Lisa Anderson and Gail CrowderFunctions Committee SA



victoria/tasmania

From the PresidentWith the start of another financial year I would firstly like to thank the Vic/Tas councilors for once again re electing me as the State President. (It is truly an honor).

As you are no doubt aware the National Conference is once again returning to the Hilton on the Park in October – you will see from the brochure that your Institute has arranged some great speakers, that I am sure will provided those who are attending with the latest up to date information relating to our industry. So if you have booked you spot – great. I with the other Vic/Tas councilors look forward to seeing you in October and if you are still undecided I really encourage you to have another look at the program – it will be another great event.

As has now became a part of this events tradition the annual AICM Golf day is this year being held at the Home of PGA in Australia – Sandhurst Golf Club – two Councilors, Lou Caldararo and Charles Tims plus their Golf committee made up by Marcus and Cherrie McKenzie, has organised a great day. I would like to thank all those who are sponsoring this day. Without your involvement these type of events would simply not be possible.

On a final note we still have some informative network evening planned for the next six months so have a look the Website, we look forward to see your at one of these nights.

– Jeff Hurst , Victoria/Tasmania President

Charles Tims (Councillor) at the YCPA Dinner, Frank Gambera (Councillor), Peter Kerlin (Vic/Tas Executive Officer), Lou Caldararo (Councillor).

YCPA winner Abdul Shafeel (Simplyenergy), and Damian Karmelich – D&B Director Commercial Services.

Above and below: YCP Awards Dinner.



victoria/tasmania

Network Meeting July

The Vic/Tas Network meeting in July was a

great night with over 30 registered delegates.

Bruno Secatore and Glenn Spooner from Cor

Cordis Partners gave a great presentation on

Understanding the Balance Sheet. A hand out on

the night was a good check list for Credit Managers

to use when they meet with their customers and

use as a guide to ask the right and sometimes

difficult questions.

Cassidy Lam, Juliette Claridge, Charles Tims (Councillor) at the YCP Award Dinner.

Another well attended Network Meeting in July

D&B table at YCP Award Dinner.

Members and guests at YCP Award Dinner.

The Australian Institute of Credit Management Victoria/Tasmania welcomes the following




zipform



western australia/nt

From the PresidentAs this is my first report as the newly elected President of the AICM in Western Australia I would firstly like to state how honoured I am to have been chosen to undertake the role and secondly I would like to thank the outgoing President and Executive team for their tireless work over the previous years.

You only have to listen to, read or watch any media source available to understand that we, in the financial world and especially in credit management, are part of an environment that is changing and evolving at an ever increasing rate with no signs of easing off. To me this means there is no better or more exciting time to be involved with the Institute and the challenges ahead.

I would like to acknowledge the calibre of the Executive team I have been provided with in the WA Division and as we are meeting this week in my boardroom, our first priority, apart from getting to know one another better, will be to discuss the requirements of the Councillors and allocate portfolios.

During my early days as President I will focus on moulding the Council into a cohesive unit that provides value for the members and sponsors.

All Councillors will be asked to challenge the status quo and bring new and refreshing ideas and concepts to the table.

Personally I will look to energise and inspire the team to be the best we can, in all we do. Not a bad place to start.

Colin Phillis - MICMPresident - Western Australia Division

Young Credit Professional Awards WA 2011The WA Division were very proud to host once again the 2011 YCPA Dinner and yes it was a fantastic night and enjoyed by Finalists, Council Members, Guests and Members alike who had a great night.

This year our prestigious event was held at the Maurizio’s Restaurant in Perth and next time you are thinking about what restaurant to go to definitely consider this one it was excellent.

We were all seated and the MC for the night Steve Thomas made us all very welcome and he’s not too bad at the jokes either and set a very

good mood going which made all feel very comfortable ready for a big night.

Our Finalists were introduced and I can tell you the calibre was very high indeed with Mathew Briggs, Christopher Hopkins, Travis Penman, Rikki-lee Schulze, Kristy Shrigley and Natalie Walker.

During the evening between courses’s our MC Steve had a chat with each finalist at the podium and we were all impressed with the Professionalism showed by all the finalists with their manner, credit knowledge and public speaking ability.

During the evening there was lots of networking and chat and of course that question was burning, who was going to be the Winner this year. Our finalists were very gracious at their respective tables with their supporters giving them encouragement and positive tones.

Then the big moment finally came and our YCPA Sponsor Dun & Bradstreet’s representative WA State Manager Mark Russell had the honour to announce the Winner for 2011 who was Kristy Shrigley and crowned her YCP WA State Champion.

Kristy, an Account Manager at AMPAC Debt Recovery, was very

YCPA winner Kristy Shrigley and D&B WA Manager Mark Russell.YCPA Finalists with D&B WA Manager Mark Russell (back right).

YCP Awards Dinner.



western australia/nt

pleased with the outcome and thanked all and in particular her managers Colin Phillis and Tom Concannon and her co- workers at AMPAC for supporting her and she vowed to take it to the eastern staters at the National YCP.

The night finally came to an end after a few more toasts, networking and the thought that the WA Division had another very successful State YCP Awards Night proudly sponsored by Dun & Bradstreet.

A Young Credit Professionals VisionOur YCP State Winner is very busy at the moment preparing for the National YCP and doing her day job in the collection business but she gave this roving reporter an insight to further articles she will be writing for the magazine.

Coming from a sales background she appreciates that knowledge at the front end of the process and uses those skills to negotiate payment of delinquent debts and generally sorting out disputes.

YCP Awards Dinner. YCP Awards Dinner.

YCP Awards Dinner.

The Australian Institute of Credit Management Western Australia/NT welcomes the following




Being a smart WA girl as they are over here, she will be discussing in her articles such things as the use of Social Media in Credit, Sales skills can work in collections, how to negotiate for a win/win outcome, the wearing of different hats when helping people to pay their accounts and the Youth Prospective on the Credit Management Business. We look forward to Kristy’s contributions in coming editions.

It’s great to see such energy and enthusiasm from our front line Credit people and being in Credit Recruitment here in the West this is what my clients are looking for in a Credit Professional.

A career in Credit Management – Excellent Move

– Warren Myers MICMMedia & Publications

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


QUEENSLAND

MEMBERSAna Alexander R.E. Murphy & CoMorgan Elliott Vincents Chartered AccountantsAndrew Hertz P R Financer GroupJames Imray R. E. Murphy & CoTania Kuruppu R.E. Murphy & CoJason Madden R P Data LtdLinda Moore R. E. Murphy & CoMatthew O’Connor R.E. Murphy & CoDoug Paterson R.E. Murphy & CoMargaret Sims Keema Automotive GroupMartin Walker Silverchef LimitedNatasha Wall R P Data

NEW SOUTH WALES

MEMBERSPaul Boykos Australian Defence Credit UnionSandra Brandalise Great Ocean Foods Pty LtdTony Cabalfin Australian Defence Credit UnionJoselito Castro Australian Defence Credit UnionAdam Clarke Star Track Express Pty LtdJoanne Colbert Ricoh AustraliaKeryn Cromarty Fujifilm Australia Pty LtdSamantha Dolton Fosters Group LtdStephen Ellsmore Csc AustraliaScott Gasson Newcastle Permanent Building SocietyNeel Gounder Veolia Environmental ServicesRuchell Hutton Network Ten Pty LtdEvan Mallios Adstream Australia Pty LtdWilliam Marsh TurkslegalRobert McGregor Australian Defence Credit UnionNigel Miller Adstream Australia Pty LtdAndrew Moebus Australian Defence Credit UnionAdrietta Munro Paperlinx Australia Pty LtdCourtney Murphy Crane Enfield MetalsBlair Roberts Greater Building SocietyLuo Shen Commonwealth Bank Of AustraliaLinda Wright Diageo Australia

VICTORIA/TASMANIA

MEMBERSVivien Allen Australian Defence Credit UnionKatrina Bromley PaperlinxMary Cochrane Service Stream LimitedMatthew Dermott Service Stream LimitedAmanda Frontczak Wilson & Bradley Pty LtdJesse Hemingway W. Coogan Co Pty LtdAnthony Jaconis Service Stream Limited

Faye Johnstone Treasury Wine EstatesRhonda Jones Visy IndustriesKim Khoo Marsh Pty LtdDesiree Llanda Treasury Wine Estates AustraliaIndy Loebis Treasury Wine Estates AustraliaJamie Phipps Pacific Brands Workwear GroupPenny Polini Pacific BrandsDev Priya Treasury Wine Estates AustraliaPeter Robertson Pacific BrandsAlison Said Pacific BrandsMelanie September-Jones Paperlinx Australia Pty LimitedWilliam Soo Treasury Wine Estates AustraliaAdam Stewart Debt Recoveries Australia PtyAmanda Tarling SungardTimothy Thwaites Fosters GroupDee Tiet Fonterra Australia Pty Ltd

SOUTH AUSTRALIA

MEMBERSMichelle Marchioro Msp Group Pty LtdPetrula Pettas Australian Credit Management Pty LtdShane Sankey Wallmans Lawyers

WESTERN AUSTRALIA

MEMBERSRobyn Banton Covs Parts Pty LtdKeeley Beattie United Equipment Pty LtdAntonia Blundell United Equipment Pty LtdAmy Brunt Phoenix MetalformSiham Carollisen Covs Parts Pty LtdAngela Cope Dun & Bradstreet (Aust) Pty LtdCraig Cutbush United Equipment Pty LtdJeffrey Faulkner L7 Solutions Pty LtdJennifer Fenner Covs Parts Pty LtdEmily Goodhew United Equipment Pty LtdJayme Graham United Equipment Pty LtdRichard Graham Vogt Graham Lawyers Gail Hancock Dun & Bradstreet (Aust) Pty LtdJannine Harper Covs Parts Pty LtdDeidre Kapp Freo Group LimitedJody Kearsley Kingspan Insulation Pty LtdWendy Lokeni Covs Parts Pty LtdDavid Maxwell United Equipment Pty LtdKylee Paki Dun & Bradstreet (Aust) Pty LtdKapish Pattani Covs Parts Pty LtdLyn Pullen United Equipment Pty LtdPaul Saunders Ampac Debt Recovery (Wa) Pty LtdKristy Shrigley Ampac Debt Recovery Pty LtdTania Stone Covs Parts Pty LtdJulie Zurzolo United Equipment Pty Ltd

NEW MEMBERS

The Institute welcomes the following credit professionals who were recently admitted to membership in July and August 2011

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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

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