25 June 2018

Thousands of original registrations on the Personal Property Securities Register (PPSR) are up for renewal early next year (January 2019) and there will no doubt be some hesitation from businesses around how best to approach it. Addressing this task sooner rather than later can certainly be to the benefit of businesses of all sizes, with the renewal process itself a perfect time to ensure that your PPS registrations are correct. Incorrect registrations could mean loss of your security interests.

With this in mind, here are four things businesses need to consider when registering their property on the PPSR, providing some insight which could make the process easier.

  1. Think about the benefits of registering on the PPSR

    Businesses need to carefully weigh up the costs and benefits of registering on the PPSR and what this could mean for their day-to-day operations. There is a cost associated with registering your interests in goods or personal property, which will vary depending upon how long you want to secure your interest in that item. However, in many cases the benefits outweigh the negatives. If items are not registered and one of your customers becomes insolvent, an insolvency practitioner is under no obligation to return that property to you, regardless of cost or volume. Ownership means little now; a registered security interest is required.

    Clearly, failure to register property can leave businesses in real financial difficulty and at risk of insolvency themselves should they be unable to retrieve their goods.

  2. Put time into getting your registrations right

    It’s crucial that businesses ensure they are inputting the correct data when registering their goods or property, as registrations can be completely invalid if even small details are incorrect. We understand how long it can take to input potentially thousands of registrations, so it is worth making sure they are accurate when submitted.

    Make sure that every detail on a registration is correct as there is no leeway for some missing or incorrect critical pieces of information. For example, if the grantor identification is incorrect because the supplier has defined their customer as a “business” rather than a “company”, this will invalidate the registration.

  3. Check your contracts and T&Cs

    It is worth checking whether you need to update your contracts and terms and conditions in relation to the PPSR. Business should assess whether they need to update sales contracts, invoices and terms and conditions of sale, and credit application forms should clearly state a business’s security interest over goods sold on credit.

  4. Think about how your business will actually do its PPS registrations

    If you do decide to register your security interests on the PPSR, it’s important to set up your business processes and systems beforehand. This is where a credit risk adviser can come in handy, especially if you’re an SME. We know that as an SME, it’s not always financially practical to take on a full-time credit manager. However, if you are unsure of where to start or how to register, seeking independent advice from a PPSR specialist, such as EDX, is the best solution.

Obtaining advice from a PPSR specialist early can significantly advantage your business. PPSR specialists can help you understand your PPSR requirements, initiate the processes which relate to your business and enable you to manage your interests. By addressing the existing registrations sooner rather than later, businesses can position themselves to successfully manage the potentially thousands of renewals, prior to the January 2019 deadline.

Email us to organise a time to discuss your PPSR requirements.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.