AMSTERDAM, October 28, 2015 /PRNewswire/ --
The October 2015 edition of the Global Collections Review, a survey of B2B suppliers, reveals that companies in the Asia Pacific region have a different approach towards the management of overdue receivables compared to their European peers. Companies in Asia Pacific react sooner to delayed payments and are willing to use additional methods to achieve results.
On average, 2.0% of the total value of the B2B receivables in Asia Pacific was written off as uncollectable, whereas in Europe the uncollectable rate was significantly lower (1.2%). Companies located in Asia Pacific appear to be more results driven especially when it comes to cooperating with a debt collection agency. They are also willing to work with more debt collections agencies simultaneously compared to those in Europe and the Americas (where the loyalty rate is, on average, around 80%).
Raymond van der Loos, Managing Director Atradius Collections commented: "The economic growth in China is cooling down further, which impacts the entire Asia Pacific region, as there are strong regional interrelationships in supply chain trade. Measures are being implemented, which are restricting access of corporations to bank financing. Consequently, it is becoming more difficult for companies in China and Asia Pacific to obtain the required working capital for their day-to-day business operations. The number of defaulted payments in the region has increased and there is a rising trend of business fraud. Companies are reacting to this by submitting their outstanding receivables to collection agencies at an earlier stage."
Compared to their peers in Europe and the Americas, almost 50% of companies submit their past due receivables for debt recovery earlier than 90 days past the due date. In terms of export debts, companies in the Asia Pacific region are lacking the experience, knowledge and execution capability to recover receivables themselves. Therefore, they are looking for a reliable international expert, who can collect their outstanding receivables while maintaining the relationship with the customer.
This is also mirrored in the openness shown towards the additional services offered in the collections market. A high interest has been observed in first party collections services and the use of the final demand letter before handing over the overdue receivables to debt collection agencies. Especially China, Indonesia and India show a great interest in using these services in the near future to put pressure on their customers. Tony Au, Regional Head of Atradius Collections Asia Pacific, explains: "Business relationships in Asia are mainly built on trust. As there is an upward trend in business fraud, it is crucial to check if the actual business is genuine early in the sale process. Invoice verification supports companies to prevent fraud by checking with the buyer whether he acknowledges the business invoices. The final demand letter creates an early trigger for customers to pay their invoices by notifying them that if they don't pay, they will be handed over to a debt collection agent."
The complete report highlighting the survey findings of the 2015 Global Collections Review can be found in the Updates & Publications section of the www.atradiuscollections.com website.
About Atradius Collections
Through a presence in 25 countries, Atradius Collections provides trade invoice collection services in 96% of the countries across the world. Its wide breadth of services, ranging from first party to legal collections, helps companies around the globe recover unpaid invoices. Atradius forms part of Grupo Catalana Occidente (GCO.MC), one of the leading insurers in Spain and worldwide in credit insurance.
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SOURCE Atradius Collections