Accounts Receivable Management Feed Link

Accounts Receivable Management

Within a credit granting business, accounts receivable management (ARM) refers to policies and procedures for a company’s disposition of accounts receivable — or money owed on credit accounts — including measurements, aging, charge-offs, debt collection, and debt sales. ARM divisions increase the revenue of its parent company even though they are typically quite capital-intensive with state-of-the-art systems and extensive frontline staffing.

Accounts receivable management (ARM) can also refer to the industry that aids credit grantors in recovering debt before or after charge-off. This can include first and third party debt collection agencies, collection law firms, and debt buyers.

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Collectors Doing More for Clients, Keeping Less Money: Study

The study, conducted in Fall 2011, showed that the third-party debt collection industry returned $44.6 billion to clients in 2010 and kept $10.3 billion in commissions, for an aggregate commission rate of 18.8 percent. Compare that to five years ago, though, when debt collectors were enjoying an aggregate commission rate of 23.5 percent. What accounts for this unbalanced shift? We’re hoping for your comments.

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