Wednesday, 15 October 2014 10:10

Half of Unpaid Invoices Become Bad Debts in the Americas

If you deal with customers in the Americas - including not just the USA, but also Canada, Mexico and Brazil - you should be aware of the increased likelihood of a very late payment becoming an uncollectable bad debt.

According to a report from credit insurers Atradius, a whopping 52% of the most overdue payments in the region are simply never collected, compared with 35% in Europe.

That's equivalent to roughly one in every two invoices that are unpaid at 90 days after the deadline, compared with about one in three in Europe.  Overall, it's 2.7% of the value of all invoices, while 5.2% of invoices go past 90 days overdue and 38.4% of all B2B invoices in the Americas are not paid on time.

And blaming this on the recession is little more than a convenient excuse; even as economic conditions improve, an Atradius spokesman says payment promptness might not.  Regional director David Huey said:

"The economy may be showing signs of recovery but late payments, defaults and business failures remain facts of life. The survey results simply underline the need for all businesses to be vigilant in their credit management and to protect cash flow and profitability against non-payment."

 

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Vigilance and Mitigation

Despite Mr Huey's suggestions, the survey revealed that many companies within the Americas are already doing what they can to ensure payment is forthcoming.  Around half already credit check their customers, or rely on more secure forms of payment to reduce defaults, while an impressive 81.5% have credit management policies to minimise their exposure to unacceptable risks.

But the figures show that, in some instances, even this cannot prevent an invoice from going unpaid - and at 90 days after the deadline there's only around a 50/50 chance of receiving payment.

So how can you make sure you are in the half of companies that successfully receive what they are owed?  Our international debt recovery service connects you with a truly global network of independent debt recovery specialists who are able to handle your case in accordance with local laws, wherever your customer may be.

Local knowledge is crucial - after all, customers in the Americas are not bound by UK or EU law, so pursuing them requires specialist knowledge of local laws ans statutes.  Taking legal action overseas can be a nightmare too, so appointing a local debt recovery specialist in the relevant region is an ideal way to tackle the problem of recovering an unpaid invoice.

We save you the time and effort of trying to find a reputable agent on your own, and they can make sure your invoices are your client's first priority - both of which can be the difference between being paid and unpaid, particularly in cases of corporate insolvency.  And having a local debt recovery specialist contact your non-paying client can help to bring the issue closer to home; it's easy to fob off a creditor half a world away, but not so simple when you're reminded of your debt on your own doorstep.

If you have unpaid invoices to collect in North or South America then these figures show it is best to take action quickly, if you want to maximise your chances of recovering what is owed.

Over 150 Years Of Industry Experience

Our modest but highly skilled team has a combined total of over 150 years of experience in commercial credit management and B2B debt collection. From independent IT contractors to major film and TV publishers, Safe Collections has the knowledge and experience you need to get paid quickly and cost effectively.

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