FIDI Delegates have voted positively on an important change to FASI reporting, says FIDI Secretary General Jesse van Sas. As of 1 January, 2023, the reporting window will be for invoices of between 75 and 105 days old
FASI continues to be one of the cornerstones of FIDI membership. The payment protection scheme has been there for many decades and, since 1989, has paid out more than ¤2.8 million to FIDI Affiliates faced with an unpaid invoice by a terminated Affiliate.
The system is robust and, despite all the pay-outs, we still have an impressive war chest of more than ¤1.7 million. However, we have seen a drop in the fund, as there have been some significant pay-outs in recent years.
The FIDI Board, backed by the FIDI Delegates, instructed the FASI Committee to review this. As a result, new FASI rules have been approved and come into play from 1 January, 2023.
The most important rule change deals with the timing of an Affiliate securing their invoice in FASI. Up to now, this could happen when an invoice was between 90 and 120 days old (counting from the invoice date, not the due date).
As of 1 January, any invoice secured in FASI needs to be between 75 and 105 days old. This means you cannot secure an invoice before it is 75 days old, and you can no longer secure an invoice after it has reached 105 days of age.
Why this change? I think we all agree that payment terms in general, and particularly payment practices, are not going in the right direction. We receive a lot of complaints about payment terms not being respected, or even extended payment terms being forced on the movers’ supply chain.
Although this is one of the most common complaints in our industry, FIDI cannot solve the problem, as it is every entrepreneur’s responsibility to suggest or accept payment terms. However, FASI can be a policy tool to influence positive change among our members.
We have seen payment terms being adapted to fit FASI needs – ie. using the 90 days (or worse) as a common payment term. That was never the purpose of FASI. We want to avoid Affiliates using FASI as a safety net, and not carrying out their own strict credit management.
We also want to discourage larger bookers from adapting their payment terms to the FASI reporting deadlines. To allow earlier detection of payment issues and, at the same time, send a message to the industry that payment delays cannot continue to be extended, FIDI has now decided to go against the stream and reduce the reporting window to 75-105 days.
There are further changes, albeit less profound than the reporting-window shortening. As of 1 January, domestic moves booked by a FIDI colleague registered in another country than yours will be covered by FASI. This is new, but fully in line with FASI’s purpose of protecting business risks globally. Domestic moves are not international, but they are international business transactions and, therefore, belong in FASI.
Finally, the maximum pay-out per creditor for any individual FASI case – the so-called creditor cap – will be reduced from 150,000 euros to 100,000 euros. Practically, this means that in the case of a FASI distribution following a delinquent debtor case, the maximum FASI pays out to any individual creditor will be 100,000 euros.
The rationale for this is that at no time should an entrepreneur allow a debtor to build up a debt beyond 100,000 euros. If they choose to do so, they need to assume part of the liability themselves. FASI is only there to protect in exceptional circumstances. It is not there to back extended credit terms.
Please make your accounting department aware of these changes so they can make the necessary changes to their reporting systems by 1 January, 2023.
You can find more information on the FASI section of the FIDI website.
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