PPSR Ignorance – SMEs Need Accountants Help!
Accountant's Minute 160
Welcome to Accountants Minute.
Unfortunately, the majority of SMEs are unaware of the potential consequences of ignoring the operations of the Personal Property Securities Register (PPSR).
Millions of dollars have been lost by SMEs and some big businesses through ignorance of how the Personal Property Securities Act operates.
If your accountancy firm is the “trusted advisor” (and I’m sure that this is how you see your role) for your clients, surely you need to be advising your clients, especially those in the “PPSA High Risk Categories” of the consequences of not registering on the PPSR – which could be very costly and, in some cases, lead to business failure.
Have you prepared a list of your “PPSR High Risk Category Clients”? The clients which could be classified as “PPSR High Risk Categories” would probably be involved in the following business activities:
- Having stock stored on someone else’s premises.
- Supplied consignment stock to businesses.
- Have assets located at someone else’s premises.
- Have motor vehicles, boats, aircraft, plant and equipment leased to other businesses for more than 2 years.
- Have motor vehicles etc., leased for an indefinite period that could be extended past 2 years.
- Trades subcontractors who have contracts with contractors and other businesses that they are receiving progress payments from could have problems with liquidators for alleged preferential payments and potentially have to repay the amounts received, if a liquidator is successfully able to claim that those payments were “preferential payments”.
