AMSTERDAM, October 30, 2013 /PRNewswire/ --
Use of debt collections agency varies widely
Atradius Collections - worldwide specialist in corporate debt collection - survey finds significant regional variances in what businesses consider important from collections agencies.
Preference for internal debt collection
44% of the organisations surveyed have used a debt collection agency to collect overdue invoices however most still prefer performing the collections themselves. Businesses want to maintain a good relationship with their customers and the prevailing perception is that this is better achieved if the collection remains in their hands. This is especially the case in India where a good relationship with the customer is highly valued. The cost of engaging a collections agency was also noted by most respondents as an important consideration.
Performance and focus of economy have a strong influence on the factors considered important when selecting a collections agency
In APAC, the markets are very export oriented and internationalisation is very high. The success rate of the collections agency is the key performance indicator and the main criterion in selecting a debt collection agency. This is emphasized in China where the difficulty of recovering debts results in this factor being practically the only consideration. Less weight is given to price, while reliability and success are becoming increasingly important because the focus is on results. Many European companies are struggling with the poor economic conditions in the region making cost management a high priority. When it comes to collections, they need to recover the debt, but the cost of doing so is also important to their overall financial health. In the Americas, the reputation of the collection agency is more important than the success rate or price, particularly in Canada and the United States.
International versus domestic debts
Difficulties in dealing with international debts experienced by companies based in Hong Kong, India and Indonesia, have resulted in a greater use of debt collection agencies to recover foreign debts. In the United States, debt collections agencies are mainly used for recovering domestic debts. These usage trends, to a certain extent, are consistent with trade flows in the countries, the United States have a very strong domestic market and Asia still more of an export focussed market. It can however be anticipated, that usage patterns will evolve as the domestic markets in Asia grow and as more U.S. businesses grow their foreign trade.
The survey also suggests increased interest in working with collections agencies in the future. Respondents in Brazil, which has for the first time been included in the Global Collections Review, displayed a considerable interest in using final demand letters and a willingness to use a debt collection agency. In North America and APAC, companies have shown a high interest in both outsourcing their first party collections and in utilising final demand letters. Over 50% declared that they are likely to use first party collections in the next two years. The future outlook regarding debt collections is therefore optimistic.
About the Atradius Collections Review
The seventh edition of the Global Collections Review 2013 is divided into three publications. The first publication focused on Western Europe, the second on Eastern Europe, the current release focuses on the Americas and Asia-Pacific (APAC). This research provides valuable insights into the differences in collection behaviour in countries in these regions; this publication covers 12 countries; overall, the Global Collections Review covers 30 countries. The Global Collections Review is available on http://www.atradiuscollections.com
About Atradius Collections
Atradius Collections, a business unit of Atradius Group, provides efficient, quick and flexible solutions to recover domestic and international trade debts. With 20 offices and an extensive network of collections specialists and lawyers worldwide, Atradius Collections serves more than 12,000 customers. Over 85 years of global credit management industry experience uniquely positions Atradius Collections as a worldwide leader in business-to-business debt collections. Please visit http://www.atradiuscollections.com for more information.
SOURCE Atradius N.V.