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New Record Set: Business to Business Accounts Placed for Collection Continue to Rise

For the 12 months ending June 2009, members of the Commercial Collection Agency Association of the Commercial Law League of America (CCAA) received a record volume of commercial or business-to-business accounts placed for collection. Almost $17 billion in accounts were received. This represents an increase of about 39.5 percent over the 12 months ending June 2008.

In the second quarter of 2009, approximately $4.6 billion in account placement was received by CCAA members. This represented a 39.5 percent increase over the second quarter of 2008.

"The second quarter 2009 figures represent a strong increase in business-to-business account placement and an acceleration of the trend started in the fourth quarter of 2008," said Emil Hartleb, CCAA executive director. "We believe the increased account placement is reflective of the tight availability of credit and and a slowdown in sales, which has caused a cashflow crunch for small and medium size business. Most economists beleive this situation will prevail into the fourth quarter of this year before improvement is noted."

While the collectability of the accounts placed for collection has declined, CCAA members reported that profit margins have only been modestly impacted. It is not expected that account placement will continue to rise to the levels experienced in the first and second quarters of 2009. However, in a recent survey CCAA members believe that third and fourth quarter 2009 account placement will continue to be strong.

"These times continue to be problematic for American business as bankruptcies rise and a greater number of customer accounts on companies' aged trial balances move to the 60 and 90 day columns, representing an increase in day sales outstanding (DSO) and a decrease in cash flow," said Hartleb. "Companies have become more selective in their credit decisions and are watching and reacting faster to slower paying customers and placing them for collection with CCAA members faster."

(Press release issued by the  Commercial Collection Agency Association of the Commercial Law League of America (CCAA) on July 20, 2009).






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