As 2018 drew to a close, the figures representing consumer debt were worrying ones. According to experts, consumers in the United States now have around $4 trillion in debts. These figures show little sign of dropping any time soon. So, how is this likely to not only affect consumers themselves but also the companies to which they owe money? The key seems to lie in finding a better accounts receivable solution.
Consumer Debt Is Ever Trending Upward
There is one thing that appears to be certain. Consumers are rapidly accruing debt and are struggling to pay it off. This is a very risky state of affairs for all industries. This is especially true for those who have extended credit.
Over the last five years, consumer debt has increased in volume by a trillion. So, what becomes of the companies to whom these consumers owe money?
Some of the most commonly seen forms of debt include:
- Credit card and other revolving debts. This figure stands at approximately $1.04 trillion – a number that has gone up by 22 percent over the last five years.
- Student and auto loans and other nonrevolving debts. This figure stands at approximately $2.9 trillion – a number that has gone up by 30 percent over the last five years.
It is likely that the festive period only served to add 5 percent more to consumer debts. For families, this is extremely bad news for their budgets. However, it is also bad news for companies that are expecting to receive payments.
Experts predict there will be several interest rate increases in 2019. So, how will people cope with their debts? Most importantly, how will it affect the businesses to whom they owe those debts? It seems clear businesses must put in place a more effective accounts receivable solution.
Consumer Debt and Collection Agencies
For an organization of any size, when the consumer population has rising debts, the outlook is a worrisome one. Should the economy go downhill, the chances of past due balances going up are high.
More than 30 percent of consumers currently in debt are being actively pursued by collection agencies. These figures will increase if an economic downturn lies ahead. Therefore, it is essential to find solutions to recoup as many of those debts as possible. Collection agencies must look to the latest payment processing solutions to improve their revenue collection practices. By introducing web payment portals, the number of payments received on time will increase. These offer the opportunity for debtors to use their preferred payment methods at a time of their choosing. With no need for paper checks or to wait for office hours, it is more possible to pay on time.
BillingTree’s Accounts Receivable Solution
BillingTree offers a state-of-the-art accounts receivable solution to streamline and speed up the process of receiving payments. With many years of experience in the industry, our solutions are customer-focused and cutting-edge. With full HIPAA, SSAE-16, and PCI-DSS compliance, our products give collection agencies peace of mind. BillingTree’s web portal offers 24/7 access with a wide range of payment methods accepted. Making regular repayments is never something that consumers will enjoy. However, it is something that can be made less of a chore thanks to a convenient payment system.
BillingTree has designed its accounts receivable solution to address the problem of rising consumer debt. Since BillingTree offers safe and secure solutions that are competitively priced, collection agencies can benefit. Companies will recoup more revenue and receive payments on time. This is good news all-around. Consumers benefit from ease and convenience while collection agencies benefit from a simpler collections process.