Case Study: Materials handling company recovers millions of dollars' worth of equipment

To avoid being caught out again, they turned to EDX for help. Since then, they have experienced a change of fortune, recovering 100% of their equipment every single time a customer has gone bust. That’s a 100% success rate in over 20 cases in two years.

Getting the PPSR right

The materials handling company had already performed 2,617 registrations on the PPSR before they approached EDX. So although they were used to registering their security interests, mistakes were being made along the way. 

When two of their customers had external administrators appointed, they discovered that some of their registrations contained errors. Unfortunately one small error can render them invalid. With equipment worth up to $800,000 per piece, they found out the hard way the high cost of an incorrect PPS registration. They weren’t able to recover their equipment and ended up having to negotiate to repurchase it from the administrators.

From here, it became apparent they needed to get expert assistance to understand how to use the PPSR. They signed up with EDX for a comprehensive package that included advice on best practice PPSR policy, bulk registrations and ongoing PPSR processing using best in class software solution called ESIS.

Putting new processes in place

Not long after partnering with EDX, the materials handling company had reason to test their new PPSR processes. They were able to successfully recover millions of dollars, which more than justified the investment they made on the PPSR.

“From the start, they were keen to tick all the boxes. They knew how high the stakes were if they didn’t get their PPS registrations right,” explains EDX PPSR Specialist, Malcolm Poslinsky.

“Each month they have hundreds of registrations, including discharges and amendments, so there is a lot that could go wrong."

“We first consulted with them to understand their business processes and identify possible areas for improvement. Our recommendations included setting up a process to register new customers at the same time as opening a hire agreement and accepting our standard terms & conditions.”

The second step was to review the existing registrations to identify and rectify mistakes.

Malcolm recalls that the majority contained errors. “The wrong boxes were ticked, the wrong identifier was used for customers and there were late registrations – all manner of mistakes that are so easy to make on the PPSR.”

The next step was a bulk upload. Amendments (where possible) and thousands of new registrations were uploaded in one quick and accurate process.

At ease with registrations

The materials handling company now uses ESIS software to perform all registrations, amendments and discharges on the PPSR. 

Malcolm explains that the software is so intuitive and easy to use that staff are trained up in as little as an hour. “We do a lot of work in the background so that it is tailor-made to the client and the type of registrations they do. You can do hundreds of registrations each month, and one person can handle it because the software is that fast. The key however is the validation processes built in to reduce the risk of error.”

“Once a registration is processed, they don’t have to worry about it or make changes unless the company’s information changes. It’s a database with full visibility of all registrations and it’s also easy to extract the data and reporting out of ESIS to confirm what is registered.” 

One of the company’s goals was to achieve the super-priority enjoyed by Purchase Money Security Interests (PMSIs). They know that when a customer goes into administration or liquidation, a PMSI gives them priority ranking over other secured creditors.

The specific rules around the perfection of a PMSI can make it a complicated topic for businesses to understand. However, the functionality of ESIS and specialist advice from EDX has enabled them to meet these strict requirements. They have since managed to get their equipment back on every single occasion of their customers going bust.

For purpose-fit guidance and exceptional support in validating, updating and renewing PPS registrations, contact our PPSR specialists at EDX by Equifax. With 40 years of combined experience in insolvency and credit management, they make it their mission to help businesses like yours use the PPSR to insulate against risk, including negotiating with insolvency practitioners to protect your rights as a creditor.