The latest Global Collections Review survey conducted by Atradius Collections reveals that companies in the APAC and the Americas regions seem to be most proactive in recovering payments.
South American and Chinese companies in particular suffer from limited financing facilities. International and domestic companies in these regions are starting to face substantial payment problems, which is reflected in the way they handle overdue invoices. The use of debt collection agencies is higher in the Americas (46%) and APAC (47%) than in Europe where 30% of the respondents have chosen this option in the last 12 months. In the US (54%), China (52%) and Taiwan (57%) it is common to employ a debt collection agency. Additionally, the debt collections market is evolving most rapidly in the Americas region, where an increase of almost 13% is observed compared to last year. This underlines the importance of cooperating with external debt collection agencies in the region.
In Asia Pacific, companies appear to be more proactive in trying to recover their money and are willing to use a variety of methods to achieve results. European companies are more conservative and cautious when it comes to outsourcing collection of first party invoices. However companies in the APAC region appear more aligned with companies in the Americas, when it comes to using first party collections services. Almost 60% of the interviewed companies in this region have claimed to be (highly) likely to adopt this service during the next two years. This shows their willingness to begin pursuing payment earlier, before starting the traditional debt collections procedures. Raymond van der Loos, Managing Director Atradius Collections, observed: “The economic climate in both the South American and Asian markets have started to deteriorate. Payment morale has weakened and insolvency risk has increased. To improve collection success, companies are implementing stronger credit management measures and outsourcing their debt collection efforts to an expert who supports them in recovering outstanding balances and prevents unnecessary write offs.”
Worst payers are domestic customers
Across the world, the worst payers are typically domestic customers, irrespective of business size and industry. Companies in the APAC region are more active in recovering late payments from their international buyers, even though they also have a high percentage of domestic cases to collect. Raymond van der Loos observes: “The practice of delaying payments as a means of financing operations is problematic in all countries. Atradius Collections’ strategy has been to expand the global network into the South American and Asian markets to be able to help its customers, at a local level, recover payments, whether the debt is domestic or international.”
About the Global Collections Review
The Global Collections Review is based on a survey of almost 6000 companies across 30 countries in the APAC, Americas and European regions and assesses business requirements for outsourcing business-to-business collections services. The detailed insights can help companies create country and industry focused strategies on how to deal with overdue invoices.
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.
Telephone: +31 (0)20 553 3139