A Study of Australian Trade Credit Management Outsourcing Practices

Abstract

This paper reports the results of a survey appraising the extent to which large Australian companies outsource trade credit management (TCM). Of six distinct credit management functions appraised, credit risk assessment is found to be the most frequently outsourced activity. A cross-industry differential in TCM outsourcing is evident and it appears that sales-oriented companies have a greater propensity to outsource TCM. Little support has been found, however, for the expectation that smaller companies have a greater propensity to outsource TCM.