A positive approach to money management


Having spent years working with people facing bankruptcy, insolvency practitioner Andrew Aravanis has seen firsthand the potential impact of poor financial choices. But it hasn't held him back from building his own investment property portfolio. For Andrew, the key is having control over cash flow – whether it’s in your business, or in the household budget.

“Every day, we’re trying to make a positive difference for people’s lives. A lot of people may find themselves in financial difficulty when business opportunities go sour, but it then becomes personal because we’re talking about protecting their homes, and how it will impact their children.”

He says he sees business owners so focused on sales, they don’t know their own break-even point – or realise their new contracts are unprofitable. “Invariably, they’re generating the business that will lead to insolvency. You need controls to make those judgment calls, and avoid spending money before you’ve earned it.”

When he started Aravanis Insolvency 12 years ago, it was with the backing of a major debt solutions provider. “Structuring my business within a public company meant I had the funding, and within two years we broke even and we’ve been profitable ever since.”

He now has 37 staff in his Sydney office. “We’ve had pretty tight control in terms of people and cash flow – no flashy offices. Plus, the majority of our leads are internally generated, so we don’t need to spend as much time marketing. That lets us just do the work, which is what I love.”

Andrew now operates more than 1,500 trust accounts for bankruptcy administration, so banking efficiency is critical.

“We were getting no service at all from our previous bank – if there was an issue, the phone would ring out. Whenever we had to open a new account, I had to physically walk down to the branch. So about seven years ago we switched to Macquarie.

”He says another insolvency practitioner recommended Macquarie as they specialised in handling large volumes of accounts. Now he can open an account online in minutes – and he has a personal contact who will always find the answer when he has a question.

“They already knew my business and how it works – other banks have been at a loss, they can't piece it together.

”Having had several fraud incidents in the past with other banks, Macquarie’s vigilance gives Andrew confidence in the security of his accounts. He also appreciates the proactive communication.

“If we were to accidentally overdraw one account, Macquarie will let us know so we can fix it. When we deal with so many accounts and we only reconcile them monthly, this is essential.”

A timely response also helps. When Andrew was recently out of the office for the day, he had to make an international transaction. His Macquarie contact emailed him the forms, took him through them step by step, and made sure it happened by 3pm.

“It was fantastic. That’s the commitment to service I don't see other banks do.”

He is now in the process of adding Macquarie’s batch payment system, which he says will save his admin staff two to three days per month. “At the moment we have duplication of tasks, but now we can streamline the whole process even more.”

When it comes to managing the family budget, Andrew says he is also in control. “We have two teenagers in high school now, and all the bills and expenses that come with investment properties. So I look at my accounts daily to make sure all bases are covered.”

He sees his personal investments as a way of balancing the cyclical risk of his business.

“Although we have a steady income, insolvency basically follows the economy. If interest rates or unemployment are high, our services are in more demand. Although Australia has weathered the storm quite well, it just takes one global event and we could see a spike in insolvency again.”

With this in mind, he has always taken a long-term view with investing. “It’s all about capital gain. You don’t know what’s around the corner, so I make sure I have the cash flow to hold through any downturn. You might have a short period of loss, but you’ve got to hold tight.”

Growing up, Andrew was taught to value education and the opportunities it brings – and to keep his spending within his means.

“I’m working for my family’s future, so we try to keep our expenditure modest. My kids know there are pitfalls to credit card spending. You don’t see many people crying when they spend their money, but in my business we see it all the time at the other end.”

For Andrew, this is about being mindful. “Control means knowing there is a difference between what you need and what you want. Occasionally you need to learn to say no.”

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Unless stated otherwise, this material has been prepared by Macquarie Bank Limited ABN 46 008 583 542 AFSL & Australian Credit Licence 237502 ("Macquarie") for general discussion purposes only, without taking into account your personal objectives, financial situation or needs. Before acting on this general information, you must consider its appropriateness having regard to your own objectives, financial situation and needs. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service.

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