MINNEAPOLIS, MN – New business placed at collection agencies carried lower balances in 2003, but gross recoveries were up from the previous year, according to the recently released 2004 Benchmarking and Cost of Operations Study by ACA International, the Association of Credit and Collection Professionals (ACA).
The annual survey of ACA?s U.S. collection agency members found the average third-party debt collection agency brought in $103,928,804 in new accounts, down from the average $136,303,260 placed for collection in 2002.
Gross collections at the average agency improved to $7,695,726, which was significantly higher than the $5,849,176 average recovered in 2002.
Gary D. Rippentrop, CAE, ACA?s chief executive officer, attributed both trends to the improving U.S. economy. ?In a weaker economic climate businesses have more distressed receivables on their books, and therefore place more of those accounts for collection like we saw between 2000 and 2002. But as the economy improved throughout 2003, more households and commercial customers had the resources to pay their financial obligations, making collections more effective,? Rippentrop said.
In the expense column, employee compensation continues to be the largest expenditure for debt collection agencies, accounting for nearly half of total operating costs at the average agency in 2003. Other notable findings include a significant decrease in postage spending and hefty increases in the cost of telephone service and employee health insurance.
ACA publishes the Benchmarking and Cost of Operations study annually to help its members measure revenue and cost figures against those of peers. The 2004 study is available for purchase online at www.acainternational.org or by calling ACA Member Services at +1 (952) 928-8000, ext. 711. Cost of the survey is $100 for ACA members and $250 for non-members.
ACA International, formerly known as the American Collectors Association, is the association of credit and collection professionals. Founded in 1939, ACA International has approximately 5,300 members, including third-party collection agencies, attorneys, credit grantors and vendor affiliates. Headquartered in Minneapolis, ACA International serves members in the United States, Canada and 58 other countries worldwide. For more information on ACA International visit www.acainternational.org.
