The Economic Impact of Accounts Receivable Management: Kaulkin Report 2022 Edition Selections

Kaulkin Ginsberg believes that every accounts receivable management (ARM) executive should be armed with an acute understanding of the industry in which they operate, from its long history to the latest trends and developments and the economic impact. To that end, we are putting together an aggregation of our most up-to-date collection agency research in the form of the Kaulkin Report, 2022 Edition. The following blog is an excerpt from the sub-report entitled, “Introduction to Accounts Receivable Management.” To request a copy of the full sub-report, any of our other Kaulkin Sub-Reports, or the entire Kaulkin Report: 2022 Edition, please contact us here or email

The modern 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, for example, ARM companies collected nearly $102.6 billion, and returned $90.1 billion of that total back to their credit-granting clients.[1] 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.[2] These returns not only improve creditors’ financial health but also increase the supply of credit and lower borrowing costs. In addition, the $90.1 billion in net returns represented roughly $706 in savings on average per household.[3]

Table 1. Debt Collected by ARM Companies and Returned to Creditors, 2018

Beyond returning otherwise-uncollectible debts and facilitating to creditors, the ARM industry provides numerous benefits to the broader economy. In their academic analysis of the economics of debt collection, Viktar Fedaseyeu – associate professor of finance at the China Europe International Business School – and Robert Hunt – then-Vice President of the Federal Reserve Bank of Philadelphia – found that the debt collection industry plays a critical role in the U.S. consumer market’s sustainability and growth based on its ability to:[4]

  • Facilitate the repayment process, which improves borrower credit scores;
  • Generate greater potential for borrowing/lending; and
  • Protect creditor reputations.

Aside from these more indirect benefits, ARM companies directly contribute to the economy in a multitude of ways. One such way is through employment. 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.[5] 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.[6]

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.

Works Cited

[1] “2020 State of the Industry Report.” Kaulkin Ginsberg & ACA International, 2020.

[2] Corporate profit data retrieved from Bureau of Economic Analysis’s Gross Domestic Product series.

[3] The Census Bureau reports that there were roughly 127.6 million households in the United States in 2018.

[4] Fedaseyeu, Viktar & Robert Hunt. The Economics of Debt Collection: Enforcement of Consumer Credit Contracts. Federal Reserve Bank of Phildelphia, 1 Mar. 2014, SSRN Electronic Journal. doi:10.2139/ssrn.2411056.

[5] 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.

[6] Ibid.

Leave a Reply