The new year always brings changes to the business world. And, this year, 2016, the biggest changes are expected to hit commercial credit and collections agencies, as well as others in similar industries. In fact, the International Association of Commercial Collectors is predicting big regulatory changes to take effect this year.
One of the changes they’re predicting isn’t really a change as much as it is in an increase. Credit has been tight and difficult to get since the recession, and it’s expected to get even more tight in the new year. As a result, creditors are expected to be more frugal with their own money in 2016 since they’re less likely to have as many new accounts coming in.
In fact, in general, economic growth is expected to either stay where it’s at or decline this year. That may sound like there’s not a lot of hope, but that’s not the case. This is simply a year of change, a year of elections and threats of war and terrorism. Thus, businesses that can stay strong and make wise choices during this time can definitely make it through to a time where things are more settled.
If you’re curious as to why years like these bring about so much change, it’s simple really. People sense when there’s a kind of instability in their worlds and they tend to naturally save more and spend less during uncertain times. Threats of terrorism and war also breed a culture of fear, a culture in which people travel less, both for business and pleasure, leading to a decline in business, but especially international business. It’s really just a rocky, cautious time for consumers and businesses alike, and all businesses can do is ride it out.
Credit collection agencies and commercial credit agencies will do well to, as mentioned, be more selective about who they extend credit to, be more fierce about collections efforts, and charge higher rates for their services. Agencies that are not currently affiliated with a professional association that maintains high standards for its agencies would do well to get affiliated since having a good reputation and association can help business even in difficult times.
Other changes that are expected for these industries in the year 2016 include:
l A reduced number of accounts in collections
l Higher liquidation rates for collection agencies
l Creditors will be more devoted to credentialed agencies
l An increase in placements from clients
l An increase in collections outsourcing
l Reduced use of offshore collection agencies
Obviously, it’s a year and time of change for people in these industries. For your business’s best interest, just be willing to adapt your business strategies to fit the world around you. The more willing you are to change and grow to reflect the current times, the more likely it is that you will successfully make it through them.