APAC Companies More Proactive With Overdue Receivables

Atradius Collections

APAC Companies More Proactive With Overdue Receivables


AMSTERDAM, Oct. 28, 2015 / PRNewswire=KYODO JBN / --

    The October 2015 edition of the Global Collections Review, a survey of B2B

suppliers, reveals that companies in the Asia Pacific region have a different

approach towards the management of overdue receivables compared to their

European peers. Companies in Asia Pacific react sooner to delayed payments and

are willing to use additional methods to achieve results.

     (Logo: http://photos.prnewswire.com/prnh/20150421/740164-a )

    On average, 2.0% of the total value of the B2B receivables in Asia Pacific

was written off as uncollectable, whereas in Europe the uncollectable rate was

significantly lower (1.2%). Companies located in Asia Pacific appear to be more

results driven especially when it comes to cooperating with a debt collection

agency. They are also willing to work with more debt collections agencies

simultaneously compared to those in Europe and the Americas (where the loyalty

rate is, on average, around 80%).

    Raymond van der Loos, Managing Director Atradius Collections commented:

"The economic growth in China is cooling down further, which impacts the entire

Asia Pacific region, as there are strong regional interrelationships in supply

chain trade. Measures are being implemented, which are restricting access of

corporations to bank financing. Consequently, it is becoming more difficult for

companies in China and Asia Pacific to obtain the required working capital for

their day-to-day business operations. The number of defaulted payments in the

region has increased and there is a rising trend of business fraud. Companies

are reacting to this by submitting their outstanding receivables to collection

agencies at an earlier stage."

    Compared to their peers in Europe and the Americas, almost 50% of companies

submit their past due receivables for debt recovery earlier than 90 days past

the due date. In terms of export debts, companies in the Asia Pacific region

are lacking the experience, knowledge and execution capability to recover

receivables themselves. Therefore, they are looking for a reliable

international expert, who can collect their outstanding receivables while

maintaining the relationship with the customer.

    This is also mirrored in the openness shown towards the additional services

offered in the collections market. A high interest has been observed in first

party collections services and the use of the final demand letter before

handing over the overdue receivables to debt collection agencies. Especially

China, Indonesia and India show a great interest in using these services in the

near future to put pressure on their customers. Tony Au, Regional Head of

Atradius Collections Asia Pacific, explains: "Business relationships in Asia

are mainly built on trust. As there is an upward trend in business fraud, it is

crucial to check if the actual business is genuine early in the sale process.

Invoice verification supports companies to prevent fraud by checking with the

buyer whether he acknowledges the business invoices. The final demand letter

creates an early trigger for customers to pay their invoices by notifying them

that if they don't pay, they will be handed over to a debt collection agent."

    The complete report highlighting the survey findings of the 2015 Global

Collections Review can be found in the Updates & Publications section of the

www.atradiuscollections.com website.

    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.




    For further information:

    Iris Graatsma

    Email: iris.graatsma@atradius.com

    Telephone: +31(0)20-553-3139

    SOURCE: Atradius Collections