CCR World Magazine

CARDIFF – The latest “Global Collections Review” survey undertaken by leading credit management and collections specialist Atradius Collections, assessed the current commercial debt collection trends and practices of more than 1,700 companies in nine European countries including Great Britain.

 This second study, builds on initial findings released in January 2010, focusing on the use of debt collections services and the number of days that international and domestic debts are overdue, as well as the nature of the criteria used to select an external agency and factors that may discourage companies from outsourcing their outstanding debts.

A key finding from the latest study shows that external debt collections agencies are used to collect international debts by more than half (53%) of companies using outsourced debt collection services while in Great Britain, this figure was considerably above the European average at 62%

Great Britain’s focus on international collections appears justified as it not only recorded the highest level of overdue international receivables, accounting for well over one-third of the country’s overdue debts, but also the highest proportion (23%) of international debts more than 90 days overdue, which is almost double the European average.

The effectiveness of outsourced agencies and their abilities to deliver results topped the list of why European businesses choose to take on an external agency. When asked to rank a series of eight criteria, ‘success rate’ was regarded as most important with ‘price’ rated as only of secondary importance, followed by ‘reputation’, ‘the ability to maintain a positive relationship’ and ‘local knowledge’. In addition to these general trends, Great Britain also displayed some specific preferences, ranking ‘local knowledge’ and ‘additional services’ more important than the European average, while ‘access to up to date information was regarded as least important.

Raymond van der Loos, Managing Director of Atradius Collections explained: “For many businesses the recession and the need for liquidity were key factors in deciding to use an external collections agency, which was reflected in the findings from our original study six months ago. Our new Review provides some clear evidence that this development is continuing and as a result of the successes that have been delivered by outsourced agencies, it is now the dominant method in some countries.”

He added: “This new study also identifies some interesting attitudinal, cultural and geographic differences, which help us ensure we deliver a high quality local service in a global market. Also, the question of maintaining positive relationships with debtors has never been an issue for us as our own regular satisfaction surveys show that more than 90% of customers say that we maintain positive relationships.”

Among the five reasons for not outsourcing debt collections, British businesses ranked ‘lack of trust in the success of the outsourcing party’ low down the list at fourth with ‘cost’ rated only one place higher. This indicates that the debt collections industry is well regarded even by businesses that don’t use debt collections and that ‘cost’ is a relatively minor factor, whether or not a company chooses to use an external debt collections agency.

(Source - Atradius Press Release)