Accounts Receivable Management

The U.S. accounts receivable management (ARM) industry has undergone a tremendous transformation since the start of the twentieth century. Initially, small collection agencies proliferated throughout the U.S. in the 1920s and 1930s. When creditors could not collect account balances on installment plans or retail accounts, these companies were hired on a contingency basis. During this time, debt collectors were either viewed as thugs who used intimidation to collect on debts, or mom-and-pop shops run out of a spare bedroom using an extra phone line.

By 1970, the modern U.S. credit industry was coming into its own. In turn, the amount of outstanding consumer credit grew sevenfold during the 1950s and 1960s, from $19 billion at the beginning of 1950 to $127 billion at the end of 1969. However, the trend toward a consumer credit economy led to the perhaps unexpected consequences of higher delinquency rates among consumers and the corresponding increased demand for debt collection services to address the issue.

As a result, Congress passed the Fair Debt Collection Practices Act of 1977, citing “abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors.” The FDCPA would not only reshape the ARM industry for the better, but also convey government recognition of the important role debt collection plays in the U.S. credit economy.

Today, the ARM industry is an amalgamation of several market segments – debt collection, debt buying, collection law firms, and repossession services – that generated more than $14.5 billion in aggregate 2015 revenue and is projected to grow to more than $17 billion in annual revenue by 2020 at a compounded annual growth rate of more than 4 percent.

The industry is characterized by its sizable investments in advanced technological systems that support call-center and collection operations, and compliance divisions through voice and risk analytics software. As a result, the industry attracts interest among both strategic and financial buyers seeking economies of scale opportunities within a dynamic yet highly fragmented market.

While the ARM industry continues to evolve, Kaulkin Ginsberg is available to advise those ARM companies who are committed to maximizing their growth and exit objectives, as we have been since 1991.

As a result of the important role the ARM industry plays in the U.S. consumer credit economy, the industry will continue to evolve and attract interest from financial and strategic buyers. Kaulkin Ginsberg has served as a strategic consultant and transaction advisor to industry executives for decades, and prides itself on its knowledge and expertise the ARM industry.

We are excited about the potential within the ARM industry and look forward to working with owners and executives who are committed to achieving their growth and exit objectives.

If you are interested in receiving a copy of The Accounts Receivable Management Industry Overview, or would like to confidentially discuss your interests in the ARM industry, please contact a member of our strategic advisory team at hq@kaulkin.com.

 

 

 

 

LATEST BLOGS

What Happens When a Whale Gets Swallowed?: The Potential Sale of Tenet Healthcare Could Significantly Impact U.S. ARM Companies

September 21, 2017

One of the largest players, Tenet Healthcare, announced last week that it is exploring alternatives, including a potential sale. What impact will a transaction involving one of the largest for-profit hospital systems have on the ARM industry? Let's take a look.....

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The Accounts Receivable Management Industry Deserves Greater Support

September 19, 2017

According to numerous studies by universities and government agencies, the accounts receivable management industry is critically important to the success of the U.S. credit economy the largest in the world. However, the ARM industry, unlike many other industries, does not receive the most favorable endorsements from regulators or the media, despite its importance to the U.S. economy.....

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The Economy's Effect on the ARM Industry: The KG Prime Index

September 13, 2017

Fluctuations in the U.S. economy can significantly affect the performance of the ARM industry. Although numerous indicators interact with the industry's many segments, certain variables are far more impactful than others. Taking our analysis of the aforementioned economic variables and their interaction with the ARM Industry a step further, Kaulkin Ginsberg's market research team developed The KG Index with the goal of examining the effects of these economic variables on the ARM industry relative to a base period of Q4 2007. ....

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RECENT ANNOUNCEMENTS

Kaulkin Ginsberg Company to Release Exclusive and Comprehensive Index

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Kaulkin Ginsberg Company will release an exclusive and comprehensive index detailing the economy's effect on the ARM industry. ....

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The Kaulkin Ginsberg Fall 2017 Fellowship Semester Begins

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Kaulkin Ginsberg Company, in conjunction with the University of Maryland, College Park's Department of Economics, began its fall 2017 fellowship semester earlier this month for the fourth year.....

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Kaulkin Ginsberg Announces the Acquisition of Remit Corporation by Eastern Revenue

August 17, 2017

Kaulkin Ginsberg Company announced today the acquisition of Remit Corporation, a well-established regional collection agency founded by Harry Strausser III, and based in Bloomsburg, Pennsylvania, by Eastern Revenue, Inc.....

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