Since 2020, businesses across all sectors and regions have taken a beating with trading conditions the most challenging they have been in years. With multiple impacts such as rising inflation and interest rates, labour shortages, supply chain disruptions and more, CreditorWatch’s Business Risk Index forecasts business insolvencies to continue rising over the coming months.
This deterioration of confidence and performance means that businesses will be increasingly wary of their credit customers and their capacity to pay going forward.
The risk of losing goods and accumulating bad debt if your customer becomes insolvent is a massive concern for business. When a customer becomes insolvent and collapses, they are unable to recover their goods and outstanding debt, which can have a flow on effect and push their creditors to the brink.
However, there are precautionary actions that can be taken to prevent your credit-customer relationships from reaching the stage where you are dealing with a bankrupt customer. Practicing your due diligence to identify early red flags, setting up monitoring and alerts on all your customers, and gaining access to a database of business credit scores through CreditorWatch’s RiskScore are all great ways to protect yourself from credit risk and make more informed decisions when forming customer relationships.
Most importantly, signing up and becoming a secured creditor listed under the Personal Properties Securities Register (PPSR) is crucial to avoid risk of insolvency and ensure that all of your lost debts are paid back. In this article, we outline how the PPSR can protect your business from going bust, and introduce some of the added benefits of integrating PPSRLogic to your credit application onboarding procedures
Taking advantage of the PPSR to protect your business
The PPSR is a national online database that shows you whether someone is claiming an interest in goods or assets. This can protect you in two main ways:
- You can search the register to help you make an informed decision when buying goods or acquiring personal property. This is because you can check whether the goods or property you want to buy have any existing financed debt.
- Registering can also help protect your security interest in case any of your customers do not pay or go under. As a registered and secured creditor, you have your goods and assets protected under the system and be first in line to receive them, instead of going through a lengthy insolvency process and receiving little or nothing back.
If you conduct business transactions on credit terms, or if you lease, rent or hire out equipment, you need to register on the PPSR. These permeate through a wide variety of industries, including agriculture, automotive, construction and mining, financial services, retail, wholesale and manufacturing.
However, despite the PPSR being a vital component of doing business in Australia, many fail to register due to its notoriously complex setting up process. This is where the PPSRLogic by CreditorWatch comes in. PPSRLogic makes the process far more accessible and affordable for businesses of all sizes to create, manage and renew registrations.
It’s easy to navigate, and allows you to import existing registrations and identify missing or incorrect information such as ABNs, ACNs, addresses, and grantor details. Additionally, PPSRLogic allows you to streamline the entire customer onboarding journey, make amendments without creating a new registration, receive alerts when registrations are about to expire and identify incorrect and missing information which can void registrations.
Take advantage of the PPSR today
Whether you’re in the construction industry and leasing an excavator or renting out a used-car – case studies are a great way to see how the PPSR can work for you to help improve your debtor management protocols and reduce the risk of insolvency.
Hundreds of CreditorWatch customers use PPSRLogic to help optimise credit risk management and keep the risk of bad debt off their radar for good. Get in touch with us today for a free demo of PPSRLogic.
You can also check out our case studies to help you better understand the benefits of the PPSR for your industry and how it can protect your business.
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