In Part 3 this week, we spoke with Lynn Walton the Managing Director of Accessii Group to discuss the importance of the PPSA. If you or anyone you know needs the services of a debt collector or assistance with the PPSA please email me email@example.com or call 0447474222.
Question – Lynne, thank you for taking the time to provide some insight to Accessii Group. Firstly, can you please tell us about Accessii, what services you offer and some history behind the success?
Thanks Stewart for asking me to participate. Accessii began life as a PPSA specialist business in 2010 (then named EDX QLD) offering PPSA consultancy advice and PPSR registration and management services to businesses that need to register on PPSR to secure their supplies and get paid first (before the bank, the tax office and even the insolvency practitioner) in the event of a customer becoming insolvent. I am an ex insolvency practitioner and therefore well placed to help protect our clients and get them paid first. Since then we have expanded the business to include a multi credit bureau online trade application and court action alert monitoring platform so that our clients can continually monitor customer creditworthiness – which is vital. As we are emerging from covid there is aneed to identify and take steps to protect against those customers that haven’t fared well. Our focus now is very much on identifying the risk within your customer portfolio and helping protect you from that risk. I think our success over the last 11 years has been in developing strong relationships with our clients. They like that we are always available to answer questions (related to insolvency, security, notices received and anything else that comes up) and help them to navigate the business risk minefield of 2021.
Question – In my experience the PPSA has been around so long yet so many SME businesses still don’t know or understand what it does. Do you agree with me ? If so, why do you think that is?
I absolutely agree with you. PPSA is actually very simple in concept and very complicated in application. Suppliers of goods can secure their supplies and get paid first (or get hired equipment back) if a customer goes bust – it’s not only very simple but it works perfectly in practice. We have clients that have been paid hundreds of thousands of dollars first in an insolvency all for the price of a 7 year registration which is $6. The complication is in understanding your unique circumstances, whether that is supplying goods on credit (huge benefits of registering) or hiring equipment (catastrophic risk in not registering in certain circumstances) and devising a registration strategy and profile that provides full protection. There is a lot of complication in the Act and the PPSR itself and misinformation in the business world which leads to confusion and inaction. A recent study suggested that only 20% of businesses entitled to register actually do so and of those only 20% get it right. It’s astonishing that businesses have this cheap, simple way of insuring against customer insolvency but they don’t use it. Our job is to help our clients to understand how the law impacts their business and how to get the most out of the PPSR in the easiest and most cost effective way possible.
Question – In order to lodge your security interest what do you need in place prior to registering?
Two things – you need to have a retention of title (ROT) clause in your terms and conditions of trade and then you need to have a registration on PPSR. Most modern terms and conditions contain an ROT clause which will say something like “ownership and title to the goods supplied does not pass to the buyer until payment has been made” and you need to have a registration on PPSR that is correctly constructed. That’s where we come in. We can process all of your registrations for you through our PPSR platform SiiP. It’s completely effortless on your part. All we need is a list of your customers’ names and ABNs. We do the rest and we can help you with an ROT clause if you don’t have one.
Question – If your registration is lodged incorrectly what can that mean for a creditor?
It means that your security could be invalid or fail to achieve the required priority. Simply put, you won’t get paid first if you have supplied goods on credit or, tragically, you could lose your hired goods to the insolvent estate. If you’re going to spend the time, money and effort registering, it makes sense to get guidance and do it right.
Question – In an event of Insolvency with a customer, how important is it to have your securities registered?
If you’ve ever read an insolvency practitioner’s report to creditors you will see a section which estimates the return to creditors. Generally speaking, creditors are divided into priority categories of secured and unsecured creditors. Secured creditors are often grouped together in this report which makes it difficult to see that suppliers of goods subject to ROT that register on PPSR get paid in priority to all other creditors including the insolvent company’s secured bank. Please see the illustration below which is from a real report to creditors. Suppliers are often astonished that they can become secured creditors as easily as by registering on PPSR. In this insolvency, where would you want to be? Are you willing to pay a few dollars to register on PPSR and become a secured creditor?
Question – Can the PPSA prevent creditors from receiving preferential payments?
Again, this is a complicated area and it ultimately depends on the circumstance. We have a client that didn’t see the point in registering when PPSA was first introduced because their supplies became fixtures – affixed to land. They received roughly $6 million worth of preferential payment (unfair preference) claims every year. In 2015 they decided to register against all customers in an effort to protect against this. Since then they have not had one preferential payment claim. The results speak for themselves. In answer to your question – yes. In most cases, registering on PPSR against all customers effectively protects against preferential payment claims.
Do you offer consultancy or training to clients who need assistance?
We do it all. We understand your business, we make sure you have the required security in your terms and conditions of trade, we register your existing customers for you, we give you access to our platform (online trade applications and/or PPSR) to enable you to register new ones and, finally, we help you to enforce your rights when your customer becomes insolvent.
With the tsunami of insolvencies expected post covid Accessii Group is a protection measure worth some special consideration. If you would like to talk to Lynn directly you can email her at firstname.lastname@example.org or call 0427917440
Next Week we will hear from Chris Allchin of Grow Finance to discuss Debtor Finance and the benefits it offers.