Atradius published the latest results of its survey of global collections practices.  The review focuses on 27 countries, including all major global economies, it examines the collections behavior of companies and how they deal with their overdue invoice as well as what factors influences their selection of a collections external partner. This ‘Review’ also explores potential future developments regarding the services offered by debt collections agencies.

  • Overall, 1 in 4 respondents worldwide have used a debt collections agency in the last 12 months
  • Companies interviewed in the Asia Pacific region were more inclined to used debt collections agencies than respondents in the Americas and Europe
  • Dutch companies showed the highest use of debt collections agencies and the lowest use of internal resources for collecting overdue debts
  • 20% of respondent have collected strictly international debts with the assistance of debt collections agencies
  • Asia Pacific countries have used debt collections agencies for international debts more than other countries
  • Overall, 60% of respondents that have multiple locations in different countries have centralized their credit and collections in a specific center with responsibility for all account receivables
  • Caution characterizes European companies for the usage of first party collections and final demand letter
  • Highest likelihood for using first party collections among companies in Asia Pacific region
  • Highest willingness for using the final demand letter among companies in Asia Pacific region

Overall, while most companies surveyed reported that they have used their own internal resources to collect outstanding debts during the past 12 months, a further third of respondents have used an external debt collections agency. Around 45% have used a law office or attorney and more than 10% have sold their debts.

Companies based in the Americas have indicated internal collections as their preferred method for recovering overdue debts (72%), while using internal resources is also the main way chosen by the companies across Europe and Asia-Pacific region.

The use of debt collection agencies is more common among Asia-Pacific countries where 43% of companies interviewed have outsourced the collections of their outstanding debts. Companies based in Europe and in Asia-Pacific region have shown a wide use of law offices (44% and 50% respectively) even though there are big differences at country level.

Source:  Atradius Global Collections Review 2011