Confidence in the economic recovery has eroded in the accounts receivable management industry (ARM), according to the results of insideARM.com’s quarterly
Credit & Debt Collection Industry Confidence Survey.
The ARM Confidence Index—a weighted index calculated from the responses—slipped nearly 5 percent to 60.2 in the winter 2010 survey, compared to the results in fall 2009. This index provides a snapshot of the level of confidence industry leaders have for positive future performance.
“In our mid-January survey, ARM professionals expressed gradually lowering expectations for debt collection performance this year,” said Patrick Lunsford, senior editor at insideARM.com. Collection agency respondents ranked expected performance six months from now at an average of 3.64 on a scale of one to five, down from 3.78 in the fall 2009 survey. ARM professionals registered a similar drop in expectations for performance 12 months down the road.
As another indicator that current economic conditions remain challenging for the ARM industry, 84 percent of agencies report that they are “somewhat” or “very” likely to modify their collection strategies. The most popular strategy shifts included accepting more payment arrangements (66.2 percent), and making more settlement-in-full offers (42.3 percent).
“If there is positive news from the survey, it’s that the ARM industry is hiring,” said Lunsford, adding that a tough economy means an increased demand for collection services. More than 46 percent of collection agency professionals indicated their companies added positions in the fourth quarter of 2009. In the next six months, 52.8 percent of collection agency respondents expect their companies to be larger.
Less than 20 percent of ARM companies anticipate laying off workers over 2010.