31% of UK businesses use an external debt collection agency

The latest Global Collections Review survey, undertaken by a leading credit management and collections specialist assessed the current commercial debt collection trends and practices with almost 4,000 companies spread over 22 countries across Europe, the Americas and the Asia Pacific region.

This comprehensive study not only includes data on two new EU countries, namely Hungary and Slovakia, but also incorporates valuable research information on first party collections for the first time.

The study found that over one-third (37%) of US businesses currently use an external debt collection agency. This compares with Global and European averages of 31% and 29% respectively,

Almost one-third (31%) of UK businesses use an external debt collection agency, which is slightly above the European average of 29%, yet the UK also has one of Europe’s highest levels of debt selling at 22%, which is 10% higher than the European average and second only to France.

By comparison, the study concluded that the United States is also one of the world’s biggest debt sellers with some 21% of firms reporting use of debt selling services, which again is higher than the global average.

Exporters and international trade account for 55% of all outsourced debt collection with firms taking advantage of global debt collection offices able to overcome language barriers and local difficulties in the law and culture.  Even though 55% of all outsourced debt collection is focused on international debt, the UK exceeds this figure with 59%.

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.”

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, the UK 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.

This blog post has been compiled from various news sources and the full Global Collections Review conducted by Atradius can be downloaded here  at http://www.atradiuscollections.com

CCDR (Corporate Credit Debt Recovery Ltd) is a leading UK Debt Recovery /Debt Collection specialist with international reach and a client base of SME’s and Eurozone multinational organisations. Our head offices are in Liverpool

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