Allowance for Credit Losses

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Allowance for Credit Losses

Allowance for Credit Losses

The allowance for credit losses on trade receivables is determined based on a number of factors such as recent and historical write-off and delinquency trends, a specific analysis of significant receivable balances that are past due, the concentration of trade receivables among clients and the current state of the U.S. economy. As part of our analysis, we apply credit loss rates to outstanding receivables by aging category. For certain clients, we perform a quarterly credit review, which considers the client’s credit rating and financial position as well as our total credit loss exposure. Trade receivables are written off after all reasonable collection efforts have been exhausted. Recoveries of trade receivables previously written off are recorded when received and are immaterial for the three months ended March 31, 2021.

The following table presents the activity within the allowance for credit losses on trade receivables for the three months ended March 31, 2021 (in thousands):

Allowance for credit losses, January 1, 2021	$	2,757
Current period provision	(852)
Write-offs charged against the allowance, net of recoveries of amounts previously written off	(164)
Allowance for credit losses, March 31, 2021	$	1,741

The allowances on trade receivables presented in the Unaudited Condensed Consolidated Balance Sheets include $0.5 million and $0.4 million at March 31, 2021 and December 31, 2020, respectively, for reserves unrelated to credit losses.

During 2020, in response to the COVID-19 economic and health crisis and its impact on our clients’ ability to pay outstanding receivables, management performed an in-depth analysis and increased the Company’s allowance for credit losses. During the three months ended March 31, 2021, management continued to perform similar analyses and determined that as a result of continued strong collections, low write-off experience, minimal client-specific credit loss concerns, and an overall improvement in the aging of our portfolio, the allowance for credit loss should be reduced.