Kaulkin Ginsberg

2020 State of The Industry Report

To develop a deeper understanding of trends in the ARM industry, ACA International commissioned Kaulkin Ginsberg Company to compose a report on the operations, characteristics and economic impact of ARM companies. Download it in full or read a summary below.

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When fees, loans, taxes and other debts go unpaid, businesses are struck with reduced profit margins and governments face budget shortfalls. Ultimately, consumers suffer the most as they are unable to access affordable credit, products and services as prices increase due to unpaid debts. Creditors look to the professional accounts receivable management (ARM) industry to help recover and resolve outstanding debts to the satisfaction of all parties.  Today’s ARM industry is an amalgamation of various segments – third-party collection agencies, debt buyers, and collection law firms, among others – that serve a diverse set of client sectors.

To develop a deeper understanding of trends in the ARM industry, ACA International (ACA) commissioned Kaulkin Ginsberg Company to compose a report on the operations, characteristics and economic impact of ARM companies.  The Kaulkin Ginsberg 2020 State of the Industry Report relies upon 2018 data, the most up-to-date publicly available information.

This report uses various sources of information, including but not limited to: 

  • An ACA-supported survey of ARM companies administered by Kaulkin Ginsberg between October and December 2019.
  • The United States Census Bureau’s 2016 County Business Patterns Survey, Nonemployer Statistics, and Statistics on U.S. Businesses data series.
  • Ernst & Young’s November 2017, July 2014, and January 2012 reports on debt collection commissioned by ACA, titled “The Impact of Third-Party Debt Collection on the US National and State Economies.

The following bullets summarize key industry estimates and figures derived from the data sources listed above:

  • Creditors placed roughly 1.6 billion accounts with ARM firms. The aggregate face value was nearly $923.1 billion, representing an average account balance of $574.
  • ARM firms collected nearly $102.6 billion in debt, with a recovery rate of 11.1% of face value.
  • Total net debt returned to creditors amounted to nearly $90.1 billion.
  • This represents roughly $706 in savings per household.
  • The ARM industry employed around 124,400 – including payroll employees and owners. Total compensation, which combines aggregate payroll, amounted to almost $5 billion.
  • ARM firms contributed an estimated $108.3 million to charity.
  • ARM employees offered roughly 524,000 hours of their time to volunteering – including 229,800 hours for company-sponsored activities.
  • ARM companies and their employees paid roughly $1.1 billion in federal taxes and $105.9 million in state and local taxes.

About Kaulkin Ginsberg:
Since 1991, Kaulkin Ginsberg Company has provided critical strategic advice to the outsourced business services industry. Our client-centric approach covers almost every stage of a company’s life cycle and enables us to maintain longstanding relationships as trusted advisors. We provide mergers and acquisition advisory, strategic consulting, valuation services, market intelligence and analysis, as well as litigation support and expert witness. To confidentially discuss your interests, please contact us at [email protected] or visit our website . Access to previous economic reports written by Ernst & Young are also available.

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