D&B Australia: Debt Collection Expected to Jump Following Christmas Splurge

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.