Protecting your Debts
Do you sell items to your customers? What happens to your stock if they haven’t paid their account, your stock is sitting on their premises, and they decide to close their doors? The Government has implemented a National Registrar that you can join in to, which allows you to recover your stock, and have it brought back to your premises to return to your stock and reduce the Bad Debt that you would have otherwise had to recover from. This is called the PPSR Register, and every account you have should be registered, to protect you. This costs a fee to do, through ASIC and must be done correctly, otherwise it is invalid. Once it’s done correctly, you will be issued with a Legal Certificate quoting the PPSR Registration number. Did you know that a business who owes you money cannot even sell that business while you have the PPSR Registration as a valid legal Document? Solicitors will automatically check the PPSR register for any that need to be cancelled and that again, needs to be done correctly. Your PPSR Report will show you all the Businesses who are holders of Registrations. You may be amazed at how many businesses are covered already. It will come as a shock to you. The sale of a business cannot take place while you or anyone else holds a PPSR Registration, therefore you can insist on your stock to be returned, or your account to be cleared before releasing your customer. The solicitor will provide them with the Certificate number, and you will receive a call from your customer asking you to cancel/remove the PPSR from their business. Sometimes, this is the only way that you will find out that they are even selling their business.
If you are not covered by this process, your customer can easily sell their business, be paid for it, walk away with the proceeds, and then you will have a battle being paid the amount that is owed to you. Protect your business. You’ve worked hard to make it grow and survive. Initially the set up cost will be great, to cover the customers you are already trading with, but once you are protected, it needs to be a regular instant requirement that you do, each time you allow a new customer to trade on credit terms with your business. Your PPSR Registrations are all Tax Deductable, too, and you shouldn’t trade with anyone who won’t allow you to create a Registration. Do your New Account Applications make mention of this condition? if not, you are unable to Register anyone, otherwise you could be sued by your customers for not obtaining their permission.