Canadian Treasurer

Sep 22 , 2010

Global Collections Review shows focus on outsourced debt collection

ITASCA--The latest "Global Collections Review" survey, undertaken by leading credit management and collections specialist Atradius Collections, assesses the current commercial debt collection trends and practices with almost 4,000 companies in 22 countries across Europe, the Americas and the Asia Pacific region, one of which is the US.

This third study is the most comprehensive to date and not only includes data on two new countries, Hungary and Slovakia, but also incorporates research information on first party collections for the first time.

More than one-third (37%) of US businesses use an external debt collection agency, which is significantly above the world and European averages of 31% and 29% respectively, yet the United States is also one of the world's highest users of debt selling at 21%, which is 8% higher than the world average and identical to its North American neighbour, Canada. Even though 55% of all outsourced debt collection is focused on international debt, the figure for US businesses is just under half (49%).

Raymond van der Loos, Managing Director of Atradius Collections, explained: "Effective debt management and cash flow improvement are fundamental parts of business life across the globe and it's clear that external debt collection is playing a significant role in helping companies recover debts and stay solvent in a still challenging commercial environment."

He added: "International debt collections naturally forms a significant part of our business, but it's not only our ability to deliver an effective and integrated solution, which is of value to our customers, but also that we act as an extension of their company, so we always have a clear focus on managing the relationships with debtors very carefully and in a positive way. Clearly, success rate and maintaining positive relationships are significant factors for businesses when selecting an outsourced agency."

Another key aspect of the new report is the latest information on trends in outsourcing first party collections over the next two years. Although in Europe, Great Britain showed the greatest level of interest at 39%, worldwide, the US recorded the fifth highest level of interest where 37% of American businesses said they were either 'likely' or 'highly likely' to outsource their first party collections.

The ability of external debt collection agencies to deliver results proved to be a key influencing factor for businesses when asked to rank eight selection criteria in order of importance when choosing an agency. 'Success Rate' heads the worldwide and European rankings with 'Price' taking second place, yet US businesses also ranked an agency's 'Ability to maintain positive' relationships as one of the top three factors when selecting an external debt collections agency.

Overall, both worldwide and European attitudes relating to the selection of debt collection agencies were remarkably similar, which indicates that the requirements, expectations and high standards demanded of agencies are consistent factors, irrespective of business type, size or location.

The "Global Collections Review" survey was conducted with 3,971 businesses located in 22 countries across Europe and the Asia Pacific region as well as North and Central America, covering: Australia, Austria, Belgium, Canada, China, Czech Republic, Denmark, France, Germany, Great Britain, Hong Kong, Hungary, Ireland, Italy, Mexico, Poland, Slovakia, Spain, Sweden, Switzerland, the Netherlands and USA.



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