With EOFY now behind us, it’s a great time to focus on some annual PPSR housekeeping.
While everyone focuses on the act of registration, the ongoing management of your PPSR registrations is just as important. Remember, registration takes a minute, management is for life. This is particularly relevant if you’re still using the government’s PPSR registration platform, rather than a third-party software provider like PPSR Cloud.
So, what types of PPSR checks are crucial at this time of the year?
Essential PPSR Checks for Businesses
Simple Reconciliation Checks
Reconciling your PPSR registrations to your customer and your equipment lists is important to ensure all customers are registered. This task is a lot easier if the Giving Of Notice Identifiers you’ve used are customer related i.e. their client/debtor number.
It’s also a lot easier if your software reports your registrations in a clear, easy-to-understand format. Many do not.
Don’t Let Registrations Expire
As the Government site does not warn of impending registration expirations, you’ll have to manage this task yourself. Maintaining a list of renewal dates is important and a constant task as time goes by. We’ve seen the results from unintentional registration expiry and they’re not good.
As part of your annual PPSR checks, you need to identify when registrations are due to expire over the coming 12 months and plan quarterly renewal dates. It’s fiddley if you don’t have the right software to do it for you, but it’s better than missing a renewal date.
Even better, if your registration software allows for automatic renewals, switch it on. Then all you need to worry about is discharging registrations when a customer leaves, much simpler and safer.
Ensure Grantor Details are Correct
Unless your software monitors changes to your Grantors, you should run an ABN check to ensure your Grantor identifiers are current and are appropriate for the Grantor’s entity type. Check to ensure your Grantor’s ACN or ABN is current. Cancellation might be an indicator of operational issues.
If your software doesn’t stop you from using your Grantor’s ABN when an ACN exists, you should make sure all your ABN registrations are in line with the requirements of the PPSA. Remember, using an ABN identifier where the Grantor has an ACN will invalidate your registration.
Similarly, your registration software should be alerting you when to use an ABN for a sole trader. You must use their full name and date of birth, if not, the registration is invalid.
Checking Registrations Against You
Reviewing PPSR registrations performed against your business is often overlooked. Only the most sophisticated registration software will monitor and alert you when someone performs a PPSR registration against you. Accordingly, it’s up to you to perform a PPSR search of your own business and review the registrations and the secured parties performing them.
Make sure you agree with the level of security being claimed by secured parties, particularly any All Present and After Acquired Property registrations. If you have any concerns over the nature of any registration, you can challenge the Secured Party and request further details and evidence of their security. A formal process for requesting a discharge of any PPSR registration exists and should be used if you disagree with a Secured Creditor’s claimed security.
Registration details should also be reviewed to ensure they comply with the PPSA.
You should check the usual culprits:
- Has PMSI been correctly elected?
- Are Proceeds claimed?
- Is your Collateral Description appropriate?
- Are your Controlled and Subordinated elections correct?
- What about Inventory?
There is also an unusual culprit which should be addressed, Transitional Registrations.
At the commencement of the PPSA, Transitional registrations could be performed, essentially enabling security interests created under security agreements existing prior to the PPSA (2012) to be registered.
Transitional registrations were very popular and as they were free, many were performed for terms of more than 25 years and are still in place and being relied upon.
Technically, the registrations remain valid, but are they effective? As Transitional registrations, they represent security interests created under terms and conditions of trade that existed prior to the commencement of the PPSA. What if you’ve issued new terms since then, changed or enhanced your security? Is the correct security being registered?
What happens after your PPSR Checks?
Once you’ve completed your housekeeping and identified the changes/amendments required you’ll appreciate the capabilities of advanced registration software, enabling multiple and bulk amendments, discharges and renewals to be performed.
PPSR registration software has, until now, only been available to the clients of the large credit information providers and some credit insurers. Not any longer. PPSR Cloud is now available to Australia and New Zealand businesses, offering the following features:
- Easy to understand reporting of your existing registrations, perfect for reconciliation purposes
- Traffic Light warnings of impending renewal dates from 6 months out
- Auto renewals, just ‘set and forget’ PPSR Cloud will automatically renew your PPSR registrations
- Monitoring of your Grantor details, alerting you to any changes in their official identifier details
- PPSR Cloud will alert you to the existence of a Grantor’s ACN and will automatically change any ABN registration to the Grantor’s ACN
- You’ll be alerted if the Grantor is a sole trader and will be instructed to provide their name and date of birth
- You’ll be alerted each and every time a PPSR registration is performed against you
- When first transferring your existing registrations to PPSR Cloud it will automatically review all your registrations and alert you to issues with:
- PMSI elections
- Transitional registrations
- Proceeds elections
- Controlled or subordinated elections
- PPSR Cloud facilitates multiple and bulk amendments, renewals and discharges.
If you haven’t performed a PPSR check post EOFY, contact PPSR Cloud today. Using PPSR Cloud’s advanced software, you can have all your PPSR checks completed followed by clear reports on what steps need to be taken.
Don’t run the risk of an insolvency practitioner rejecting your security due to an issue in your registration. Contact us now.