RECENT EU LAW CHANGES AND PRIVACY UPDATES, WILL THIS AFFECT YOUR BUSINESS OPERATIONS?
The simply answer is yes, the EU Law and use of cookies that can affect privacy legislation in that it now requires websites to obtain consent from their website users to store or retrieve any personal information on a computer, smartphone or tablet.
The legislation was created to protect online privacy, by making consumers aware of how information about them is collected and used online, and give them a choice to allow it or not.

WHY ARE COOKIES AN ISSUE?
Almost all websites use cookies – little data files – to store information in peoples’ web browsers. Some websites contain hundreds of them.
There are other technologies, like Flash and HTML5 Local Storage that do similar things, and these are also covered by the legislation, but as cookies are the most common technology in use, it has become known as the Cookie Law.
All websites owned in the EU or targeted towards EU customers (which includes countries such as Australia and New Zealand), are now expected to comply with the law

WHAT ARE COOKIES ANYWAY?
Cookies are a kind of short term memory for the web. They are stored in your browser and enable a site to ‘remember’ little bits of information between pages or visits.
They are widely used to make the web experience more personal, which is generally seen as a positive thing. However some cookies collect data across many websites, creating ‘behavioural profiles’ of people. These profiles can then be used to decide what content or adverts to show you. This use of cookies for targeting in particular is what the law was created to highlight. By requiring websites to inform and obtain consent from users it aims to give web users more control over their online privacy.

WHAT IT MEANS FOR BUSINESS?
If you own a website, you will need to make sure it complies with the law, and this usually means making some changes.
If you don’t comply you risk enforcement action from regulators, which in the UK means The Information Commissioners’ Office (ICO). In exceptional cases this may mean a fine.
However, non-compliance could also have other, perhaps more serious consequences than enforcement. There is plenty of evidence that consumers avoid engaging with websites where they believe their privacy is at risk, and there is a general low level of trust about web tracking by the use of cookies.

WHAT YOU SHOULD DO?
Compliance with the EU Law and Privacy comes down to four basic steps:
• Work out what cookies your website sets, and what they are used for.
• Tell your users how you use cookies.
• Obtain their consent, such as by stating a disclaimer regarding cookies with a tick option for acceptance, thus giving the end user some control.
• Ensure you have an up to date Privacy Policy uploaded on your website to detail how personal information is handled, processed, stored and shared.

More changes are currently going through parliament and once passed, we will provide any updates if they affect your business. These will cover – Mandatory reporting of privacy breaches – Strengthening cross border data flow protections – Penalties – Strengthening the Privacy Commissioners information gathering power etc.

WHAT YOU SHOULD DO NEXT?
Speak to your local Area Manager, we specialize in credit management and we can assist you with your review of your business operations to ensure your meet the guidelines of the EU Laws and Privacy Legislation.

Don’t procrastinate in getting your debts into EC Credit Control. Whilst we cannot guarantee any collection, in our experience the earlier we get the overdue debt, the better the chance of success. With Christmas approaching it is even more important to get your debts in for collection so as not to be delayed further by businesses and individuals going on extended breaks, making contact and resolution more difficult. To this end ask your Area Manager to show you our new AIMS product, a system that will help you to efficiently monitor and submit overdue debts for collection in a timely manner, allowing your aged debtors report to look much healthier.

Prove the Debt at the Outset:

When you send us the debt, at the very least send us the itemised invoices and the signed contract (if held). Further important documents to send might be statements/correspondence and personal guarantees (if held). Sending these to us at the outset negates delays in us seeking them later as invariably the first response from the debtor is “what is this for” and/or “please provide the proof of debt documentation”. We scan these documents to the file so when debtors ask for them we can provide them swiftly whilst the call continues, thus negating unnecessary delays that debtors often use to their advantage in responding at a later date.

Disclosure/Acceptance of Terms:

A common ongoing issue for creditors is the correct use of their terms when disclosing and obtaining acceptance prior to providing goods and services to their debtors. Remember signature is king. If you get a signed contract prior to the debt being incurred we are better equipped in attempting recovery of your debt. For many of you EC Credit Control has provided you with a terms of trade. It is important to read and understand the User Guide provided with the terms of trade, as if not correctly utilised you can negate the enforcement of clauses around credit reporting and the recovery of costs for instance. You can purchase bags of concrete, but if you don’t learn how to prepare it properly before you pour it, the results may be less that satisfying afterwards!!

Small Debts Less Impact:

It is important to note that if the amount of the original debt is less than $150 in Australia and $100 in NZ (soon to be $150), that the credit reporting agencies (Equifax/Illion/Centrix) will not accept these accounts for default listing. Therefore in terms of having a negative impact on the debtor concerned, the only avenue to affect them is legal action which is not cost effective as a tool for recovering such debts.

Disputed Debts:

When you submit a debt for collection you are telling us that no bona fide dispute exists in respect of that debt. Submitting a debt that is in dispute already severely waters down our ability to enforce collection of the debt. The credit reporting agencies (Equifax/Illion/Centrix) have rules around disputed debts. Essentially a debtor cannot be default listed for a disputed debt unless you hold a court judgement overruling the dispute. The only consequence we can follow through on apart from contact and demand documents is legal action which has further upfront costs for you to consider. Whilst some disputed debts will be resolved via the collection process, some will not and you may delay your opportunity to seek court redress.

Cash flow problems most commonly originate from customers not paying their bills within your stated terms of trade. If you would like to increase your cash flow and have a better relationship with your customers then your business needs correctly written, legally binding and enforceable Terms of Trade.

In our office we have the “Smiling Lawyer” test on all documents. Basically, we look at all our customer’s documents as if we were the lawyer defending a claim. Now that lawyer will either have a concerned look or be smiling. If he thinks he can’t win he will frown, if the paperwork has legal weakness he will start smiling.

Check your paperwork and if you are not sure, get an expert opinion. If your business is in Perth, Welshpool, Kewdale, Gosnell, Victoria Park then give me a call on 0468 347 680.

Good credit management starts from a protect and collect strategy. Protect your business with the right documentation, that is properly implemented, and you will be able to collect debt.

At a recent meeting with a Shop fitter in the Inner West of Sydney, the owner explained that a large local Sydney Inner West business that they had done work for to the value of over $800K to date, went into liquidation. The company still owed the shop fitters $140K which was bad enough in itself. But then they received a demand from the liquidators demanding that the $660K that they had been paid from the liquidated company over the previous 6 months be paid back under the Claw Back provision in the Corporations Act.  

Talk about rubbing salt into the wounds. The preferential payment provision can be invoked by the Liquidator if the insolvent company has paid a creditor within the 6 months prior to the Liquidator being appointed.  

Fortunately for the Shop fitter, the Liquidator had made a fundamental error in their documentation, so with the aid of a Solicitor the Shop fitter managed to escape the Claw Back provision. In the end the shop fitter missed out on the $140K he was still owed and had an expensive legal bill to pay – but a lot less than the $660K they were up for if not successfully defended, which would have put them out of business.  

The moral of the story is, whether you’re based in Sydney’s Inner West or elsewhere in Australia, talk to EC Credit Control about how to protect your business from a costly and painful Preferential Payment claw back scenario.

I recently met with Ray, a builder based in Newtown in Sydney’s inner west. Ray had been trading for over 20 years without any bad debts – a really good effort! Newtown like any other suburb in Sydney’s Inner West has a number of businesses in the construction industry that can fall victim at any time to a bad debt.

After 20 years Ray suddenly had been hit with two big debts at the same time. The first debtor owed him $100,000 and started to question invoices, not only recent ones, but also invoices from previous years. The second, after Ray had supplied 3 months of labour, went into liquidation owing him $80,000. This is a major hit for any small business to try and recover from and highlights the importance of protecting your cash flow with a strong set of Terms of Trade, Contracts and sound Credit Management policy to monitor your clients on 30 day payment terms. Just like insurance on your car you never know when you are going to have to rely on it.

Recently a wine wholesaler, based in the Inner West of Sydney was very happy when EC Credit collected a debt of $12,500 and their Debtor was forced to pay all of the collection costs our client incurred, as per the debtor had previously agreed to. This result was achieved because our client had proactively invested in implementing Terms of Trade documentation back in 2012.

Wherever your business is located in Sydney’s Inner Western Suburbs, EC Credit Control has the resources and knowledge to help you protect your cash flow.

I had a Creditors Report come across my desk today, which is not that unusual, but what was unusual is the number and types of businesses I saw listed as Secured Creditors, having obviously registered themselves as Credit Providers on the PPSR. (Personal Property Securities Register)

Now whilst there were 262 Unsecured Creditors totaling a massive 6.5 million in unsecured credit, against only 44 Secured Creditors, I found myself really paying attention to the names of those secured creditors and the businesses they operate. Whilst I did recognise a couple of our clients on the Secured Creditor list there were quite a number of varied and smaller businesses which you don’t normally tend to see on a Creditors Report.

Which leads me to ask the question, Are Businesses Finally Learning How to Protect their Cash Flow with the PPSA? (Personal Property Securities Act)

What most businesses, and their professional advisors for that matter fail to realise is that no matter if you provide goods or services on credit the PPSA is there to protect their cash flow.

I would encourage all businesses owners to do a little investigation and find out for themselves how they can move from the list of 262 Unsecured Creditors to the list of 44 Secured Creditors.

“It’s your Business and Your Money”

As a member of the South West Sydney Business Enterprise Centre (SWS BEC) I attended their annual Business Night as a guest of the CEO, David Waudby. The night was attended by over 500 representatives of small business from the South West Sydney Region covering areas from Liverpool, Campbelltown, Narellan and Camden. It was a great opportunity to network with business people from the region.

The keynote speaker, Jamie Durie through his own business experience as a landscaper highlighted some key aspects to his success and how those principles could be adopted by others. The other speaker, Craig Rispin identifies himself as a business ‘futurist’ and has made his success through predicting the climate for business in the future. He works with many large multi-nationals to plan strategies for the future.

There was a diverse range of businesses and industries represented giving all attendees the chance to interact with others. During the course of the dinner I had the opportunity to discuss our credit management products with considerable interest in our Terms of Trade documentation and our PPSA Registration service from a local solicitor, a tourist operator and a commercial property agent. The night highlighted the positive and successful growth of business in South West Sydney.

The South West Sydney (SWS) Business Enterprise Centre (BEC) is one of many such government groups designed to help small business in the early stages of their growth. The SWS BEC covers an area from Liverpool, Campbelltown, Narellan and out to Camden. They offer advice on all areas of business set-up and organisation. After becoming a member of the BEC I had lengthy discussions with the CEO, David Waudby about the services that EC Credit Control offer small business in credit management. So impressed was David that he received approval from the BEC board to promote our services as a vital tool for small business to implement. In promoting EC Credit Control in the May 2015 Update David says “a review of existing credit control processes, condition and documentation is a critical part of all small business that must be conducted properly. The correct process for credit provision will save you time and money and possibly your business”.

I continue to work closely with David and his other advisers to create an awareness for all small business owners who provide credit to have the appropriate Terms of Trade documentation and credit plan in place to improve and protect their cash flow.