It's Time to Implement Portfolio Management

Now is the time to implement Portfolio Management solutions!

The economic climate has changed dramatically over the past six months, beginning with the subprime mortgage crisis in the summer of 2007 which spread through the global credit markets and is now hitting the U.S. economy on a broad scale. Businesses in many industries are feeling the pinch of reduced funding, higher costs and lower sales due to reduced consumer and business spending. This will lead to increased delinquency in 2009.

Now, more than ever, is the time to implement sound, reliable portfolio management practices and solutions. Companies that fail to properly monitor their accounts receivable portfolio for new risk will see increased delinquency, higher DSO and more charge-offs, not to mention increased workload on collections teams.

Experian’s Portfolio Management solutions can be a key part of your response to this threat.  Contact us to learn more. 

Here are some facts behind the upcoming wave of delinquency and defaults.

Businesses are now finding it difficult to get funding

• U.S. structured financing (the financing behind the financing) dropped from over $300 billion in June to under $50 billion in November
• This trend is expected to continue in 2008

Standard & Poor's

Costs of doing business are up

• The U.S. government's wholesale price index in November jumped to its highest level since 1973
• Energy prices surged over 14% in 2007
  • Gas prices rose 8.9% in 2007 and are projected to rise 11.9% in 2008
  • Crude-oil futures have risen about 45% in the last year
  • Coal prices have gained 32%
• Food prices rose 4.8% in 2007 and are projected to rise 3.0% to 4.0% in 2009
  • Soybeans -- the basis for many prepared food products -- are up 80%

Dow Jones, U.S. Dept. of Energy, USDA

Housing market & economy downturn are impacting small business owners

• 35% of small business owners report major negative impact
• 42% reported cash flow problems
• 54.2% of small business use home as collateral

Discover Small Business Watch, Small Business Research Board

Business bankruptcies are on the rise (graph on right)

• 7,167 businesses declared bankruptcy in Q4 2007
• 26% increase over the first quarter of 2007
• 45% increase for H1 2007 vs. H1 2006

U.S. Bankruptcy Courts

The big banks are bracing for increased delinquency

• American Express took a charge of $440 million to raise reserves
• Capital One is reserving $1.9 billion for losses
• Wachovia has set aside $1 billion
• Wells Fargo has set aside $1.4 billion

Sectors in the most danger

• Housing-related industries
• Consumer products
• Retail and restaurants
• Media and entertainment
• Forest products
• Electronics makers
• Energy miners
• Agriculture companies
• Durable goods manufacturers

Standard & Poor's, Dow Jones