Firms outsource £1.1bn to debt collection agencies

late_pay.png

Companies struggling to receive payments from clients and customers outsourced £1.145bn to debt collections agencies in the three months to September, new figures reveal.

Publishing statistics for the first time, the Credit Services Association (CSA), which represents the UK debt collection industry, said the figure was a 12% increase on the previous quarter when £1.021bn was outsourced.

The rise was even more compared to the £0.928bn recorded in last three months of 2011.

The volume of debts also increased from 595,901 in Q2 to 616,078 in Q3.

Michelle Moore, from the CSA, said the figures show that the use of third-party debt collection agencies has become an "integral part" of companies' credit management strategies. 

"There comes a point when a late payment turns into a potentially toxic bad debt, and that is when an external debt collection agency is at its most effective," Moore added.
 
"Outsourcing debts to a third party tends to make those debts more 'serious' and are often satisfied more speedily than when a company is chasing overdues themselves."

 

Tags:

Login or register to tag items

Create your FREE BusinessZone.co.uk account to:

  • Access all articles in full
  • View multimedia
  • Receive email bulletins
  • Send private messages
Register now

Login

Forgotten your password?

Please login or register to post a question


 

BusinessZone TV

Dragons' Den judges James Caan and Deborah Meaden and social entrepreneur Karen Darby are some of the successful entrepreneurs who feature in our exclusive videos. Watch here.