When unpaid invoices start piling up, many businesses or individuals turn to professional debt collection agencies to help recover funds. But how do you go about hiring a collection agency, and what should you expect from the process? This guide will walk you through it—step by step.
Table of Contents
- When to Consider Hiring a Debt Collection Agency
- Choosing the Right Collection Agency
- Understanding the Collection Process
- Questions to Ask Before You Hire
- Legal and Ethical Considerations
- Getting Started: How to Place an Account
When to Consider Hiring a Debt Collection Agency
If a customer hasn’t paid after 60–90 days of invoice due date and has ignored multiple reminders, it may be time to consider professional help. Signs that you need a collection agency include:
- Repeatedly ignored emails and calls
- Partial payments with no follow-up
- Customer disputes after goods/services have been delivered
Choosing the Right Collection Agency
Not all agencies are created equal. You want one that is licensed, experienced in your industry, and has a transparent pricing model (most work on a contingency fee basis). Some things to look for include:
- Track record in your industry (e.g., B2B, medical, consumer)
- Whether they’re licensed in your state
- Member of the ACA International or other trade groups
- Positive client testimonials
Understanding the Collection Process
Here’s how most debt collection agencies operate:
- You provide the debtor’s info, invoice, and any communications
- The agency initiates contact (calls, letters, emails)
- If successful, they collect and remit funds to you—less their fee
- If unsuccessful, they may recommend legal action or closing the account
Questions to Ask Before You Hire
Before signing any contract, ask these key questions:
- What is your collection success rate?
- Do you specialize in B2B or consumer collections?
- What is your fee structure?
- Do you provide regular status updates?
- Can I cancel the account if needed?
Legal and Ethical Considerations
The Fair Debt Collection Practices Act (FDCPA) and other state laws regulate what collectors can and can’t do. A professional agency should always:
- Operate legally and transparently
- Avoid harassment or threats
- Respect consumer privacy
If your case is commercial (B2B), FDCPA may not apply, but ethical standards still matter.
Getting Started: How to Place an Account
Ready to start? Here’s what to gather:
- Copies of unpaid invoices
- Debtor’s contact info and business name
- Any written agreements, POs, or emails
Most agencies offer online forms to upload accounts or request a quote. You can request a free quote here to see if collection makes sense for your situation.
Conclusion
Hiring a collection agency doesn’t mean burning bridges—it means prioritizing your business’s health and cash flow. Choose wisely, stay informed, and know that professional collection can help bring resolution to accounts that otherwise drain your time and revenue.
