ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENTS

12 Months Ended

Dec. 31, 2023

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,
	2023		2022
Accounts receivable	$	397,116	$	421,161
Less: Allowance for credit losses		(2,248)		(3,524)
Accounts receivable, net	$	394,868	$	417,637

At the end of each quarter, 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,
	2023		2022		2021
Balance, beginning of year	$	3,524	$	5,409	$	5,067
Provision for credit losses		2,009		9,391		(350)
Uncollectible receivables written-off		(3,641)		(11,278)		(281)
Effect of foreign currency and other		356		2		(15)
Acquisition		—		—		988
Balance, end of year	$	2,248	$	3,524	$	5,409

Significant Clients

The Company had one client that contributed in excess of 10% of total revenue for each of the years ended December 31, 2023, 2022 and 2021. The 2023 and 2022 client operates in the automotive industry and is included in the TTEC Engage segment. The 2021 client operates in the financial services sector and is included in the TTEC Engage segment. The revenue from these clients as a percentage of total revenue is as follows:

	Year Ended December 31,
	2023		2022		2021
Automotive client	10	%	10	%	9	%
Financial services client	8	%	7	%	12	%

Accounts receivable from these clients was as follows (in thousands):

	Year Ended December 31,
	2023		2022		2021
Automotive client	$	35,514	$	38,539	$	36,466
Financial services client	$	11,656	$	14,019	$	15,483

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’s business arrangements with these larger clients are structured as multiple contracts with different statements of work that are specific to a different line of business service; each of these contracts have different durations and renewal dates and a revenue opportunity below the $100 million aggregate. In early 2024, one of our larger financial services clients notified us that it is exiting one of the lines of business that we support.

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 whose financial stability practices raise concerns. Based on currently available information, management does not believe significant credit risk exists as of December 31, 2023.

Accounts Receivable Factoring Agreement

The Company is party to an Uncommitted Receivables Purchase Agreement (“Agreement”) with BMO Bank, N.A. (“Bank”, “BMO”), 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.

The balances related to the Factoring agreement are as follows (in thousands):

	December 31,
	2023		2022
Total accounts receivable factored	$	99,994	$	99,503
Total amounts collected from clients not yet remitted to Bank	$	1,158	$	13,602

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, 2023 and 2022 as the fair value of the servicing arrangement as well as the fees earned were not material to the financial statements.

Effective November 1, 2022, the Company amended the arrangement to modify the list of eligible clients whose accounts receivable may be sold pursuant to the Agreement, and to memorialize the transition from LIBOR to SOFR for discount calculation purposes.

On July 21, 2023, BMO Financial Group completed its acquisition of the Bank of the West from PNB Bank Paribas. The Agreement transitioned with the acquisition and TTEC has no reason to believe that BMO would not wish to continue its business arrangements with the Company.

On January 2, 2024, the Company amended the arrangement to adjust the discount rate to reflect BMO’s updated market pricing levels and other minor items.