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.
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
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.
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SOURCE: Atradius Collections