Commercial Collection Industry sees Big Lift from Small Business

MINNEAPOLIS, MN – Historically a specialized market, the commercial collection industry has undergone major reconstruction to face the challenges presented in the new millennium. With an increase in the number of small businesses in the past decade and an unsteady economy, commercial collection agencies are finding ways to collect the $1.2 billion of commercial debt, which shows no signs of slowing down in the near future.

“The absence of capital spending and an unstable economic outlook has caused the industry to step back and analyze the commercial market as a whole and determine the most efficient ways to collect on overdue accounts,” said Jim Bessenbacher Jr., president of the International Association of Commercial Collectors (IACC).

One trend in commercial collections is an increase in outsourcing. With insufficient funds and resources, more and more credit grantors are turning away from in-house collections and instead placing overdue accounts with specialized commercial collection agencies earlier than in the past. This process has caused many commercial agencies to adapt their procedures and policies, such as accepting high volume and low balance accounts and involving attorneys in the collection process more frequently.

Another trend in the commercial market is providing more control to the credit grantor on terms and conditions by having the organization?s chief financial officer make the final decisions regarding the creditor and agency relationship. Recent studies show that since this shift in power has occurred, more agencies are receiving higher commission rates for a better rate of return.

“The commercial segment is the fifth largest market within the industry,” said Bessenbacher. “As accounts continue to increase, agencies will need to continually find various methods to stay ahead of the competition.”

About the IACC
With 215 collection agency members and 142 attorney members, The International Association of Commercial Collectors Inc. (IACC) is the world?s largest international trade association for commercial debt collection professionals. Headquartered in Minneapolis, IACC serves members throughout the United States and in 24 other countries worldwide. Members of IACC recover millions of dollars annually for their clients and provide valuable assistance to credit departments in controlling mounting debts. To learn more, visit the IACC Web site at www.commercialcollector.com.