The PPSA act introduced in 2012 is now in full effect. Many businesses are still not fully aware of the true requirement to comply with this legislation. Those companies that believe they are compliant need to relook at what they have in place. This is one piece of business legislation that has seen a lot of legal challenges and the judgements have created precedents or clarification of the law and how it is to be interpreted.
Look at the simple checklist above and lets take each point in turn.
Independent Advice: Is this available and at what cost? most business owners will look towards a few advisor options,.
The Lawyer (or Solicitor), Given enough time and enough money a dedicated law firm can keep up with this law , advise you on how to comply and draw up the necessary papers, however like all legal practices they will lean on you to instruct them precisely on what you wish them to do. Many senior law firms publish legal information in law articles which are generally distributed amongst lawyers. Unless under a serious retainer I have yet to find a legal firm that is proactive in ensuring their customers are up to date with all legislation. A lawyer after all is there to expertly help clients in the law courts should they get into difficulty. We all know lawyers are expensive but are invaluable should you get to litigation.
The Accountant (external) A great source of information, when you request it but how many accountants are truly up with the PPSR? I have been shocked at how many accountants believe this legislation doesn’t affect their clients unless they are involved in equipment hire. Most accountants are genuinely concerned about compliance with tax requirements and ensuring your company is using tax laws effectively. This is where they shine, but keeping up with the PPSR is really outside their remit, so much so that EC Credit Control Advisers hold regular sessions with accountants to ensure their compliance with the act. Many accountants refer their clients to us for advice. Accountants are certainly less expensive than lawyers but are they in the best position to assist you, they lack knowledge only because this area is not their prime business.
The Internal Accountant(or Accounts Manager) This must certainly be an overworked group of people and their prime responsibility is to ensure you are compliant with tax ,employment legislation ash flow, forecasting etc. Although I have spoken to many who have been on a day course to learn about the PPSR. They are managing so many areas of business they really need help with implementing this legislation. The cost to you of relying on internal staff can be very high, not only if they provide you with incorrect information , but also in diverting their attention away from their core business activities, they could fall behind in such things as debtor control.
Credit Management Company: A true credit management company not only assists you with your cash flow but needs to be there to ensure your assets are protected, advise you on how to be a secured creditor, learn about important legislation , be proactive in advising its customers and take a leading role in assisting the business community.
A Credit Management Company will be your least expensive and should be your best informed option. As an example : EC Credit control has about 70,000 customers. We offer a free PPSR initial consultation. We have advisors throughout Australia and New Zealand. We will look at your business , how to secure your assets, how to become a secured creditor ahead of the Tax Office. How to prevent being susceptible to preferential clawback How the PPSR affects the value of your business and explain how the PPSR can affect the structure of trusts in your business.
Do’s and Don’ts. Large, Medium or Small Enterprise, this legislation affects all business’ there are some definite procedures that must be employed correctly and in a timely manner. In Australia it is important that each registration is “perfected” near enough is not good enough in this instance. If you don’t follow the procedures exactly you can be badly out of pocket on the plus side you can also be in the best position to recover outstanding monies, goods and build excellent value in your business.
Conclusion: Can you tick all the boxes in this checklist without any doubt? Are you prepared to spend Zero dollars ($0), that’s no monies to find out if you are truly compliant? Is this a shameless plug for EC Credit Controls Services – Yes! Experience has taught us that most companies have not yet covered off on this vital business process that our services are needed. This legislation will effect your business, the real question is will it have a positive effect or a negative effect?