7 December 2006
Debt collection figures expected to jump following Christmas splurge
Media Release
The annual Christmas credit splurge is expected to result in a near 40% increase in referrals of outstanding debt to Australia's leading collection agency, Dun & Bradstreet, according to figures released today.
Each December D&B releases collection figures for the previous post-Christmas period to warn consumers and business of the need to keep an eye on both spending and cash flow management over the Christmas period.
The D&B data shows an on average 37.4% increase in debt referrals across all industries in the April / May period. Banking, finance and insurance referrals following Christmas reach levels that are almost double the annual average, while the telecommunication and utilities industries see jumps of 26% and 37% respectively.
The April / May period is the time of the year when most businesses have exhausted all other options for collection from customers and turn to professional collection agencies for assistance.
D&B CEO Christine Christian believes the debt referral figures are an alarming reminder to consumers and business that Christmas spending and cash flow management must be watched closely to avoid the New Year blues.
"Every year during the Christmas period, too many consumers spend beyond their means and too many businesses take their eye off the ball when managing cash flow. This all too often results in unnecessary cost and pain in the following year", said Ms Christian.
"For consumers the cost comes in the form of high interest charges and possible damage to credit reports. For business the cost is poor cash flow in an environment where business to business trade payments are already at historic highs."
The last quarterly D&B Trade Payments Analysis showed that average business to business payment periods had jumped to 54 days - nearly double standard accepted payment terms.
"Businesses are negatively impacted by the standard period of closure that consequently delays payments more than normal and the additional pressure is significant, especially for SMEs", said Ms Christian.
D&B believes there are some basic hints and tips that help consumers and business better manage credit risk. For business they are:
- Clearly define credit parameters and ensure that the policy is adhered to by all departments
- Establish clear credit terms with customers from the outset of a relationship
- Ensure clear communication between front and back office functions
- Communicate with customers regularly - identify and address problems before credit terms become overdue
- Do not retreat from corrective action with persistently delinquent customers.
For consumers the advice is to resist taking on too much debt to pay for items that could soon be forgotten after the Christmas period and remember no amount of celebration is worth damaging your credit history.
For further information, or to arrange an interview please contact:
Danielle Woods
Media
Hill & Knowlton
02 9286 1258
Christine Christian
D&B CEO
D&B Australasia
03 9828 3146
About D&B
D&B is the world's leading provider of business-to-business credit, marketing and purchasing information and receivables management services. D&B manages the world's most valuable commercial database with information on more than 130 million companies.
Information is gathered in 193 countries, in 95 languages or dialects, covering 186 monetary currencies. The database is refreshed more than one million times daily as part of D&B's commitment to provide accurate, comprehensive information for its more than 150,000 customers.
The Australasian operations were bought out by the senior management group in August 2001. It was the first MBO of a wholly owned subsidiary in D&B's history worldwide.
Today Lazard Carnegie Wylie owns an approximate 90% stake in DBA and the local management team a 10% stake.
Strategies for future growth include developing DBA's commercial and consumer credit referencing business; expanding its receivables management outsourcing business; maintaining its lead in the development of unique credit and risk scoring products; and developing new products specifically tailored to the Australasian market. DBA currently employs over 500 people in Australia and New Zealand.
