ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS

12 Months Ended

Dec. 31, 2021

ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS [Abstract]

ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS

(4)ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS

Accounts receivable, net in the accompanying Consolidated Balance Sheets consists of the following (in thousands):

	December 31,
	2021		2020
Accounts receivable	$	362,719	$	383,464
Less: Allowance for credit losses		(5,409)		(5,067)
Accounts receivable, net	$	357,310	$	378,397

In connection with the implementation of ASC 326 as of January 1, 2020, the Company analyzed the prior history of credit losses on revenue for TTEC as a whole and separately for each of the two segments. Based on this evaluation, no modification to the allowance for credit losses balance was necessary as of the implementation date. At the end of each quarter beginning with March 31, 2020, an allowance for credit losses has been calculated based on the current quarterly revenue multiplied by the historical loss percentage of the prior three-year period and recorded in the income statement. In addition to the evaluation of historical losses, the Company considers current and future economic conditions and events such as changes in customer credit quality and liquidity. The Company will write-off accounts receivable against this allowance when the Company determines a balance is uncollectible.

Activity in the Company’s Allowance for credit losses consists of the following (in thousands):

	December 31,
	2021		2020		2019
Balance, beginning of year	$	5,067	$	5,452	$	5,592
Provision for credit losses		(350)		494		1,711
Uncollectible receivables written-off		(281)		(880)		(1,311)
Effect of foreign currency and other		(15)		1		(540)
Acquisition		988		—		—
Balance, end of year	$	5,409	$	5,067	$	5,452

Significant Clients

The Company had one client that contributed in excess of 10% of total revenue for the year ended December 31, 2021 and 2020. The Company had no clients that contributed in excess of 10% of total revenue for the year ended December 31, 2019. The revenue from these clients as a percentage of total revenue is as follows:

	Year Ended December 31,
	2021		2020		2019
Financial services client	12	%	13	%	3	%

Accounts receivable from this client was as follows (in thousands):

	Year Ended December 31,
	2021		2020		2019
Financial services client	$	15,483	$	58,960	$	4,321

The Company does have clients with aggregate revenue exceeding $100 million annually and the loss of one or more of these clients could have a material adverse effect on the Company’s business, operating results, or financial condition. To mitigate this risk, the Company has multiple contracts with these larger clients, where each individual contract is for an amount below the $100 million aggregate.

To limit the Company’s credit risk with its clients, management performs periodic credit evaluations, maintains allowances for credit losses and may require pre-payment for services from certain clients. Based on currently available information, management does not believe significant credit risk exists as of December 31, 2021.

Accounts Receivable Factoring Agreement

The Company is party to an Uncommitted Receivables Purchase Agreement (“Agreement”) with Bank of the West (“Bank”), whereby from time-to-time the Company may elect to sell, on a revolving basis, U.S. accounts receivables of certain clients at a discount to the Bank for cash on a limited recourse basis. The maximum amount of receivables that the Company may sell to the Bank at any given time shall not exceed $100 million. The sales of accounts receivable in accordance with the Agreement are reflected as a reduction of Accounts Receivable, net on the Consolidated Balance sheets. The Company has retained no interest in the sold receivables but retains all collection responsibilities on behalf of the Bank. The discount on the accounts receivable sold will be recorded within Other expense, net in the Consolidated Statements of Comprehensive Income (Loss). The cash proceeds from this Agreement are included in the change in accounts receivable within the operating activities section of the Consolidated Statements of Cash Flows.

As of December 31, 2021 and 2020, the Company had factored $97.7 million and $71.0 million, respectively, of accounts receivable; under the Agreement discounts on these receivables were not material during the year. As of December 31, 2021 and 2020, the Company had collected $22.5 million and $26.1 million, respectively, of cash from customers which had not been remitted to the Bank. The unremitted cash is Restricted Cash and is included within Prepaid and Other Current Assets with the corresponding liability included in Accrued Expenses on the Consolidated Balance Sheet. The Company has not recorded any servicing assets or liabilities as of December 31, 2021 and 2020 as the fair value of the servicing arrangement as well as the fees earned were not material to the financial statements.