Hire a collection agency for your small business
Ready to hire a collection agency? Here is a practical checklist for choosing one, or skip the search and get matched with an experienced collection partner for free.
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Step 1: Know what you’re placing before you hire a collection agency
List each account: debtor, amount, age, documents and your collection attempts so far. Agencies quote faster and more accurately when they see a clean summary.
Step 2: Shortlist the right type of agency
Knowing how to choose a collection agency starts with fit. Some agencies focus on consumer accounts; others on business debts. Business News Daily stresses that an agency’s fit with your type of debt and industry matters[source]. Our sister network Collection Placement lets you browse agencies by state and industry.
Step 3: Check credentials
- Licensing and bonding where required, including in the debtor’s state
- Complaints and ratings, such as the Better Business Bureau[source]
- Errors-and-omissions insurance[source]
- References from businesses like yours
Step 4: Compare written terms
Contingency rate, any fees, legal-forwarding costs, reporting, remittance timing and withdrawal terms. Published contingency ranges run from about 20% to 50%[source]. Details: collection agency fees.
Step 5: Sign and hand over the file
Provide contracts, invoices, proof of delivery, correspondence and contacts. Tell your team to route any debtor contact to the agency.
Step 6: Stay involved
Review reports, respond quickly to settlement offers, and approve any legal action only after reviewing costs.
What should a collection agency agreement include?
Fees and when they change, any upfront or withdrawal fees, how funds are held and remitted, reporting, who approves settlements and suits, the term, and how you can withdraw accounts.
Should I keep contacting my customer after placing the account?
Generally no. Refer calls and payments to the agency and tell it right away if the customer pays you directly, so records stay clear and fees are handled as your agreement says.
Can I take an account back from a collection agency?
Usually, under the withdrawal terms in your agreement. Some agreements charge a fee or the full contingency if you withdraw after the agency has made progress; read that clause before you sign.
Frequently asked questions
How do I hire a collection agency?
Shortlist agencies that collect business debts, confirm licensing where required, compare written fee terms, check references and complaints, then sign an agreement and hand over your documents.
Is there a minimum balance?
It varies by agency. Business News Daily notes most collection agencies will collect debts over $50, but whether it makes sense depends on how many accounts you have.
Can I fire a collection agency?
Usually, under the withdrawal terms in your agreement. Check whether any fee applies if the debtor pays after withdrawal.
Owed money by another business?
Tell us about the unpaid invoice and we’ll match you with an experienced collection partner suited to its size, age and location. Matching is free.
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