Reduce your risk as a supplier

The Personal Property Securities Register (PPSR) is an online noticeboard of security interests. A PPSR registration tells the world you’re claiming a security interest in goods you’ve supplied.

Personal Property Securities Register(external link) — Companies Office

A ‘security interest’ means you claim an interest in personal property that is used as collateral. For example, if a bank loans you money to buy a car, they will likely have a security interest in that car. If you don’t pay what you owe, the bank can repossess the car and sell it to recover their money.

Likewise, you can create security interests in the goods you supply. If your customers can’t pay you, you may be able to repossess the goods so you don’t lose out.

You can create a security interest in most personal property, except for land, buildings, and large ships.

Registering security interests on the PPSR may help to reduce your overall business risk. It’s especially helpful when times get tough — like during a global pandemic. If other businesses are struggling, you’re at greater risk of not being paid.

Let’s say your customer goes out of business:

• If you registered your security interest: You’re more likely to be first in the queue to get paid. You may be ahead of banks, other lenders, tax bills, or other debts the business has.
• If you didn’t register your security interest: You may not be able to recover your goods or money owed for the goods. They may be sold to pay off other debts.

Here’s how to create a security interest with your sales agreements.

1. Have an agreement

Sales agreements with customers include invoices, contracts and credit application forms.

2. State when the items become the customers’

Agreements should set out when the goods belong to the customer. For example, they might say you keep ownership until you receive full payment.

3. Keep evidence

Evidence includes things like copies of invoices, signed contracts or email exchanges. You may need these if you have to prove what you’re owed.

4. Get confirmation

Get legal advice to make sure your sales agreements do create valid security interests.

You can register a security interest on the PPSR for $16.10, including GST. When you register, you’re likely to be covered for further supplies of similar goods to the same customer for up to 5 years. Get started by setting up an online account.

Setting up your online services account(external link) — Companies Office

• Not searching the PPSR before you onboard a new customer.
• Assuming your sales agreements form valid security interests without getting legal advice.
• Not saving the agreement — you may need it in the future to prove your claim.
• Not registering security interests on the PPSR (or not registering soon enough).
• Not recording info about your customer or the goods on the PPSR correctly — incorrect details may cause your registration to be legally ineffective.