May 2017

34 APAC / May 2017 , largest group of voters happy - the consumer, it was becoming increasingly difficult for business owners to get paid when they didn’t have a contract in place and things went pear shaped. With business done on a handshake meaning no ground rules were established, when EC inevitably became involved, we were often thrown into a gun fight with a pocket knife. We still got results, but we knew they could be so much better. And from our experiences we knew we could add further value to our clients - we simply had to embark on changing our client’s habits from being reactive to one of pro- activeness - meaning a better outcome for all. “So we evolved. We started drafting transactional contracts for our clients to use within their business (also known as Terms and Conditions of Trade), and educated our clients on the specifics of the fine print - their rights. By laying out the ground rules, it allowed our clients to make sure the pendulum was swung fairly back in their favour. “As a result it meant we could be more successful recovering our client’s money, allowed us to continue to stand out from the crowd of competitors and turbo charged our growth over the next 10 plus years forming the foundation for our current standing as the market leader in Credit Management throughout the country.” The main influences affecting the credit control industry are compliance with Government legislation and large insolvencies with a lot of business owners caught up in them. This can lead to a domino effect, as Luke explains further. “The main example of this is non- compliance with the relatively new Federal Government Personal Property Securities Register (www.ppsr.gov.au ), especially by overseas firms who are unfamiliar with our Australian legislation,” he says. “This has already resulted in a number of casualties where unsuspecting business owners have failed to register an interest on the PPS Register over goods or equipment supplied to their client. When their client has become insolvent the business has found out the hard way by forfeiting their assets which have been seized by Receivers, never to be returned. “The classic example here was between GE and Forge Power Systems in Western Australia. Around two years ago GE delivered a $50 million Energy Turbine to Forge. Shortly after, Forge filed for bankruptcy. When the receiver walked through the door they checked the PPS Register to find out GE’s Turbine was not registered. They seized the turbine and said “it’s not on the PPSR, it’s ours”. And so, GE decided to take the receivers to court, spent $3 million in legal fees and 15 months in court and lost. All because of a failure to place a $7 registration on the PPS Register.” The internal culture within EC is pro-active, customer-focused, consultative and results-driven. “Staff appreciate the importance of obtaining results for our clients,” says Luke. “If we don’t, not only is our client’s cash flow affected, but we will not get paid. Any successful and profitable business needs to obtain results for their clients. This allows our clients to have the best possible chance of getting paid when it comes to debt recovery and keeps our team accountable. In relation to credit management, a lot of business owners do not understand their rights and the risks they can minimise. Therefore, we see it as our duty to educate and inform them of legislative changes and how to protect their cash flow.” With regards to the future, Luke tells us that the firm has plans for further growth, especially for the corporate market. “We are a bit like China with its infrastructure program - build it and they will hopefully come... Well, we have built it, we have invested substantially in our systems capacity, to make sure we can handle the volume and continue to excel recovering large corporate ledgers. We have tested it – repeatedly. Rest assured, while it continues to evolve, we certainly know what we are doing - and we continue to get results. “Like all market leaders that I know, the forward thinking comes from listening to what your client’s challenges and needs are. We are no different. For example, research conducted by EC Credit Control two years ago highlighted a large number of business owners being caught out by Sub-Contractors. Which is why, we embarked on an 18-month journey developing a solution. These things take time and a commitment to R&D to get right. I can’t see this practice changing within our business any time soon. “With PPSR, Privacy, Security of Payments and Unfair Contract terms all recent examples of Government interference to try and protect the “little guy” - like anything they don’t always get it right and unfortunately can create more red tape for the business community. But these all highlight the trend towards more compliance for business, especially around PPSR and Privacy.” When will it stop? Luke doesn’t know, but he does believe that the business community is becoming more informed. “Overall there is a trend towards more proactivity, but there is always room for improvement. You only have to look at the headlines last year surrounding former Federal Senator Bob Day to realise we have only encountered the tip of the iceberg when it comes to educating the business community, and helping ensure the wheels of commerce continue to turn. For us, this means further investment in R&D so we continue to be in a position to help and educate our clients so they can protect their cash flow.”