Collection Agency Cost – Is It Worth It?


Many small businesses are considering hiring a collection agency but are unsure of how much it will cost. It can be difficult to estimate the costs associated with this process, and you may be wondering if it is worth it. The following information will help you decide whether or not it is worth it to hire a collection agency. A collection agency charges a fee based on the value of the debt and how much work is involved in collecting it.

Collection Agency Cost will vary based on the age and size of the debt. In most cases, uncollected revenue for up to three months will cost between 20% and 50% of the total collected revenue. For debts aged between three and six months, the fee will be 30 – 60% of the collected revenue. For debts older than twelve months, the fee is a flat 5% of the total amount of debt recovered. As the cost of a collection agency will vary, you can expect to pay up to 100% of the amount recovered. To ensure that you get the best deal, do some research before hiring a collection agency. Be sure to look for a firm that has an excellent reputation for discretion and good results. References from previous clients are also helpful in choosing a company.