As a business owner offering trade credit to customers, you are vulnerable to credit risk and potential disasters that are no fault of your own.
You need to protect your business from customer insolvencies so you, in turn, don’t have cash flow problems and risk your business becoming insolvent too. Registering your retention of title interests on the PPSR (Personal Property Securities Register) should be the number one priority when you agree to do business with a new client (or ongoing business with an existing client).
What is the PPSR?
The PPSR is a national online register established in 2012 that functions as a public noticeboard of registered security interests in personal property, as defined by the Personal Property Securities Act. It is administered by the Australian Financial Security Authority (AFSA) to protect the rights of businesses who own property that is not in their possession or under their control.
The PPSR is imperative if you:
- Sell goods on retention of title terms;
- Hire, rent or lease out goods for a period of more than 2 years or for an indefinite period that could exceed 2 years;
- Intend to raise finance using stock or other assets as collateral
If one of your customers becomes insolvent (goes into administration, liquidation, or bankruptcy), then the Personal Property Securities Register could save you losing untold sums of money.
The best $6.80 you ever spent
If you are supplying the same types of goods to the same customer on a regular basis, on the same terms, the cost of registration is a low $6.80 and covers you for up to seven years. One registration can cover multiple supplies to one customer for 7 years.
The risk of getting it wrong
Although the PPSR provides you with a valuable extra layer of protection for such a small fee, it is not failproof. An incomplete or incorrect registration can result in failure to be paid if your customer goes broke. It’s important to understand that the registration process does not alert you to errors, even major ones. Also, there are strict deadlines depending on the legal entity you are supplying and how your customer will be using your goods.
Not using the PPSR could result in
losses your business can’t afford.
Simply call 07 3630 2533 or email Ledger Guard for more information.