Accounts Receivables Management Market Size

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As a whole, Kaulkin Ginsberg expects the ARM industry to grow at an annual rate of 6 percent from $16.7 billion in 2006 to $22.2 billion in 2011. Different segments of the industry will grow at different rates however:

Contingency Collectors

Contingency collectors recover debts for creditors and are paid some percentage of their recoveries.
It is estimated that this market had revenues of $10 billion in 2006 and forecast that it will grow 3 percent annually to $11.6 billion in 2011.
Lower pricing, client consolidation, and increased competition will force these agencies to control costs in order to maintain profitability.

Debt Buyers

Debt Buyers acquire, service, and liquidate portfolios of delinquent debt.
It is estimated that this market had revenues of $3.7 billion in 2006 and will grow at 11 percent annually to $6.2 billion in 2011.
The barriers to entry and profit potential in this market make it one of the most attractive parts of the ARM industry.

First Party Collectors

First Party Collectors pursue overdue accounts for a fixed fee early in the lifecycle of the receivable.
It is estimated that this market will grow moderately at 2 percent annually from $1.8 billion in 2006 to $2 billion in 2011.
The most successful competitors will provide creditors with first party services other than collections.

Collection Law Firms

Collection Law Firms utilize the legal system to collect debts on behalf of creditors, debt buyers, and contingency agencies.
This is the smallest but fastest growing market in the ARM industry, and it is expected that it will grow at 16 percent annually from $1.1 billion in 2006 to $2.4 billion in 2011.
The services of these companies will continue to diversify in coming years.

Mergers and acquisitions

The current seller’s market is expected to cool in coming years, particularly in the event of slower economic growth.
While these transactions tend to be cyclical within the ARM industry, M&A will continue to be used by owners seeking to grow and exit their businesses.