- The modern accounts receivable management (ARM) industry plays a critical role in America’s credit economy, returning tens of billions of dollars in unpaid debt to creditors every year.
- In 2018, ARM companies collected nearly $102.6 billion, and returned $90.1 billion of that total back to their credit-granting clients.[i]
- After accounting for fees earned by ARM companies, the total net debt returned to creditors amounted to nearly $90.1 billion, representing roughly 4.4% of total corporate profits before tax in the U.S. in 2018.[ii]
- These returns not only improve creditors’ financial health but also increase the supply of credit and lower borrowing costs.
- Furthermore, net debt returned represented roughly $706 in savings on average per household.[iii]
Debt Collected by ARM Companies and Returned to Creditors, 2018
- The ARM industry offers jobs and a livelihood to thousands of people, and the compensation earned is redistributed back into the economy as employees spend what they earn.
- Kaulkin Ginsberg estimates that in 2020, the ARM industry employed around 169,736 individuals in total, and paid out roughly $7.5 billion in wages and other compensation.[i]
- Kaulkin Ginsberg forecasts that the ARM industry employment will swell to 186,323 individuals in 2024, with aggregate wages rising to over $8.3 billion.[ii]
Debt collection is an integral component of American society, and as long as the United States remains a capitalistic society, the need for debt collection services will remain as well. Though the companies that collect debt have faced arduous challenges now and in the past – in 2008 it was the Great Recession, and today the industry contends with the ramifications of the COVID-19 pandemic – each and every time they have gotten back up, dusted themselves off, and made themselves stronger than they were before. In spite of it all, because of it all, the ARM industry is here to stay.
[i] “2020 State of the Industry Report.” Kaulkin Ginsberg & ACA International, 2020. https://www.acainternational.org/kaulkin-ginsberg.
[ii] Corporate profit data retrieved from Bureau of Economic Analysis’s Gross Domestic Product series.
[iii] The Census Bureau reports that there were roughly 127.6 million households in the United States in 2018. https://www.census.gov/topics/families/families-and-households.html
[i] Data retrieved from the Census Bureau, along with internal estimates developed by Kaulkin Ginsburg using Federal Trade Commission data, IBISWorld data, and annual financial reports filed with the SEC by various public companies.