The Commercial Collection Agency Association this week reported that its members received a record volume of commercial or business-to-business accounts placed for collection during the 12 months ended June 30. Nearly $17 billion in accounts were received, a 39.5% increase compared with the previous 12 months.
CCAA members received approximately $4.6 billion in account placements in the second quarter, a nearly 40% increase from the same period last year, according to the association.
"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," Emil Hartleb, CCAA's executive director, said in a news release.
"We believe the increased account placement is reflective of the tight availability of credit and a slowdown in sales which has caused a cash-flow crunch for small and medium size businesses," Hartleb said. "Most economists believe this situation will prevail into the fourth quarter of this year before improvement is noted."
Though collecting on accounts has become more difficult, members' profit margins have only been modestly impacted, according to Hartleb. CCAA members in a recent survey said they believe that third- and fourth-quarter account placements will continue to be strong.
"These times continue to be problematic for American businesses 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 and a decrease in cash flow," Hartleb said. "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."