More than 1/3 of European companies outsource debt collections only after the debt is more than 90 days overdue. Atradius Collections, a trade invoice collection company, launches First Party Collection, a service allowing companies to outsource accounts receivable management just after due date.
On average, 1.2% of the total value of the B2B receivables in Europe was written off as uncollectable over the past year according to the Global Collections Review 2015. European companies cited bankruptcy and failed collection attempts as the most common causes of uncollectable debts. Additionally, around 18% mentioned debts were too old to collect, highlighting that collection success diminishes as time progresses. Therefore, starting collection activities in the early stages can increase success rates. Despite this, 37% of the survey respondents delayed outsourcing their outstanding receivables to a debt collection agency until after 90 days.
In particular, companies in Italy, Spain and Turkey don't perceive the debt as risky when it's still in early arrears. Acknowledgement that the debt might be at risk of not being paid is often too late and the debt collection procedures, which also begin too late, become very difficult. It's no coincidence that these countries in particular show a higher likelihood of using the First Party Collection service as they suffer from higher risk of bad debts. Furthermore, the countries with lower payment terms (Germany and the Netherlands) can benefit from First Party Collections by stimulating the business culture to pay in time.
In France the age of the debt is one of the reasons for uncollectables. To prevent write-offs and late payments, Atradius Collections is launching the First Party Collection service next to its traditional debt collections service. Rudi de Greve, Global Operations Director Atradius Collections, explains: "The early collection accounts are handled in the name of the customer and in a manner which preserves the relationship with the debtor. The timely and early communication with customers - in the local language - will accelerate the payment of invoices, prevent write-offs and allow companies to focus their efforts on their core business."
For more information, please visit: www.atradiuscollections.com
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 Collections forms part of Grupo Catalana Occidente (GCO.MC), one of the leading insurers in Spain and worldwide in credit insurance.
SOURCE Atradius Collections B.V.