SOURCE: Vengroff, Williams & Associates, Inc.

August 05, 2008 08:00 ET

Vengroff, Williams & Associates, Inc. Reports Significant Increase in Third-Party Collections

Companies Working With VWA North America to Control Liquidity and Enhance Financial Performance

GARDEN GROVE, CA--(Marketwire - August 5, 2008) - Vengroff, Williams & Associates, Inc. (VWA), a leading provider of receivables management and business process outsourcing solutions, today announced a significant increase over the course of the past six months in overall third-party collections activity. The effects of the sub-prime crisis and the resultant slowdown of the US market is evident and the demand is not just from the banking and financial sector, which has been so drastically affected due to the liquidity crunch, but also from a wide range of new VWA clients in such sectors as technology, media, consumer goods, manufacturing, telecom and insurance. Indeed, accounts receivable departments have been feeling a major crunch.

According to Irma Moreno, credit manager at a construction supply company in business for over half a century and with five major service centers located throughout California, Arizona and Nevada, "Over the past six months, we have been keenly aware that in light of the unstable economic climate, we have been assigning past due accounts to VWA far more frequently, with aging receivables dated 90 days past due, as opposed to the usual 120 days. We have been working in partnership with VWA for three years and they are an excellent third party collection outsource provider for us. On the average, we receive approximately an 80% return on the receivables assigned to VWA."

Turning to VWA for A/R outsourcing services, Ronald H. Sebree, Senior Receivables Analyst at 2Checkout.com, Inc., a global reseller for thousands of tangible or digital products and services, said, "2Checkout.com has been working with VWA for eight months and to date, we've seen substantial recoveries of our bad debt receivables," said Sebree. "We go through a process internally trying to retrieve funds from clients with a negative balance. The process involves email, phone, and mail contact in an effort to recoup the funds owed. If we can't collect them in 180 days, the receivables are sent to VWA. In the past year, we have had a significant increase in aging receivables, prompting us to work with VWA to recoup funds and improve our liquidity."

According to the most recent statistics from The Commercial Collection Agency Association (CCAA), an organization comprised of over one hundred of the most prestigious commercial collection agencies in the US, "When a comparison is made of the second quarter 2008 to the same quarter in 2007, dollars placed for collection with CCAA members rose substantially by approximately 24. On a year-by-year comparison, twelve months ending June 2008 vs. twelve months ending June 2007, the dollars placed for collection rose by approximately 22% and the number of accounts placed rose by about 10%. If the trend continues, 2008 could be a record year for account placement."*

A proven market leader for 45 years, VWA is among the elite of US-based outsourcers within the finance and accounting BPO (business process outsourcing) industry with more than 3,000 global clients. Specializing in delivering custom-tailored, specialized solutions to increase customers' efficiency and provide the resources necessary to improve cash flow management, VWA's Robert Sherman, president of the firm's California division, said, "In a contracting economy, receivables become a prime concern for many companies, as they stumble on roadblocks when it comes to reconciling their outstanding accounts. And when that happens, keeping a close eye on cash takes center stage. Working capital is squeezed at both ends as the business looks to negotiate better terms with suppliers, and at the same time guard against inevitable customer defaults."

"Tough economies always result in increased bad debt or the need to cure slow paying customers," said Mark Vengroff, CEO of VWA. "Based upon close interaction with clients and the marketplace, the increased activity is in line with our expectations. We anticipate these levels to continue for both commercial and consumer debt through 2008. The majorities of our clients have begun to tighten their extension of credit and are looking to liquidate their own receivables earlier in the collection cycle to mitigate any potential risk of additional write-offs."

About Vengroff, Williams & Associates, Inc.

Founded in 1963, and with 23 billion dollars under its management, Vengroff, Williams & Associates is a leading provider of receivables management business process outsourcing (BPO) solutions for Fortune 1000 companies such as Ford Motor Company, Federal Express, Kodak, Microsoft, Yamaha and others. Applying state-of-the-art proprietary information systems, best practice work flow and people to realize cost reductions, operating efficiencies, and improved process design, VWA's approach enables clients to easily insource or outsource all or part of the quote-to-cash function. Solutions are customized to each client's requirements or expanded to incorporate specialized tools and SAS 70 compliant processes and procedures. Services include full order to cash processing, third party collections, EIPP systems, deduction management, dispute management, auto cash solutions, front-end risk mitigation, and tax resolution. VWA has been named a Top 21 enterprise-level FAO service provider by FAO Today Magazine. To learn more about VWA, please visit www.vwainc.com or telephone (866) 393-4892.

* The Commercial Collection Agency Association Second Quarter 2008 Newsletter

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