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If you’re a business owner or handle invoicing for a company, you know what a burden unpaid invoices can be. According to a study by independent consulting firm Plum, 11% of all invoices issued by small and medium-sized enterprises are paid late, totaling more than $1 trillion per year.
How much you can expect to collect on your own depends on your industry and clients. However, spending time chasing down delinquent accounts can cost you valuable time and human resources. In the United States, companies need to allocate an average of 15 workdays to follow up on late payments, adding to their administrative burdens.
Instead of doing the work yourself, hiring a debt collection agency can be a smart alternative. By working with a professional company, you can collect outstanding debt and save time. We reviewed companies based on their minimum requirements, transparency, fees, and more.
The 5 Best Debt Collection Agencies of 2023
- Best Overall: Atradius Collections
- Best for Commercial Collections: The Kaplan Group
- Best for Consumer Collections: Summit Account Resolution
- Best for Small Businesses: Rocket Receivables
- Best for Low Invoice Amounts: Prestige Services Inc.
Best Overall : Atradius Collections
No minimum debt amount
Free instant online quote
Experienced with international companies
Extra commissions charged on older invoices
Added fees for international invoices
Atradius Collections has been in operation since 1925 and is a leading commercial debt collection agency. Based in the Netherlands, the company is a member of several different debt collection trade associations throughout the world, including the International Association of Commercial Collectors (IACC), the Credit Services Association, and the Federation of European Credit Management Associations.
Atradius Collections supports more than 15,000 customers and handles more than 90,000 cases of commercial debt per year. Atradius Collections provides commercial debt support worldwide, working in more than 30 different countries.
Unlike many companies, Atradius Collections does not have a required minimum on debt. Its fees are dependent on your invoice amount and client location. The commission fees were not readily available on the Atradius Collections site.
For an invoice that is 180 days overdue or more, Atradius Collections will charge you an additional 2% commission on top of its standard rate. If you have international clients that have not paid their invoices, you’ll pay an introduction fee and a higher commission than if they were based in the United States.
The company offers comprehensive services, including amicable debt collections, legal collections worldwide, insolvency services against bankrupt debtors, and standby services. Atradius Collections operates the Collect@Net online platform so you can monitor the collection progress.
Why We Chose It: Atradius stands apart from the competition because of its strong reputation, international expertise, and transparent fees. It’s also the only agency that allows you to get an instant, detailed quote online without having to first speak to a representative.
Best for Commercial Collections : The Kaplan Group
Low fees on large debt balances
85% success rate
No upfront costs or membership fees
High minimum on first claims
Higher fees for international clients
Founded in 1991, The Kaplan Group is a top commercial debt collection agency that only works on business-to-business (B2B) collection. It handles claims of different sizes, from $1,000 to $1,000,000.
As part of the debt collection process, The Kaplan Group offers the following services:
- In-house law firm: If an account is not paid, the law firm will apply additional legal pressure at no extra cost.
- Background investigation: The agency will research the debtor and business owners to determine its operations and profitability to inform negotiations.
- Skip tracing: The Kaplan Group will perform skip tracing to find clients who have ceased operations or moved locations.
- Credit analysis: The agency will do credit analysis to evaluate the debtor’s personal financial situation as well as the company’s financial performance to determine its ability to repay.
- Settlement agreement: If the debtor is unable to repay the amount owed in full, the agency will negotiate a payment plan or settlement agreement for a portion of the outstanding debt.
With The Kaplan Group, there are no setup or membership fees. The agency works solely on a contingency basis, and you only pay if the agency collects money owed to you.
For large outstanding debts, the contingency fees are quite low: 15% for balances between $50,000 and $500,000 and 10% for balances over $500,000. If the outstanding debt is with a foreign company, the contingency fee is 30%, regardless of the claim amount.
As a new client, your first claim must be for at least $10,000. Otherwise, you’re ineligible to work with The Kaplan Group and will need to find another agency. There is a $1,000 minimum on all claims, except in special cases for long-term clients.
The company boasts an 85% success rate. According to the agency, the industry success rate is just 50% at seven months past due.The Kaplan Group is a member of the IACC.
Why We Chose It: For businesses looking for a commercial debt collection agency, The Kaplan Group is a good fit for you. With low contingency rates for large claims over $500,000 and a high success rate of 85%, you can maximize the money owed to you without paying setup or membership fees.
Best for Consumer Collections : Summit Account Resolution
Experience in medical industries
Monthly collection reports to see status
Potentially high fees up to 50%
Additional costs may apply (such as for litigation)
No international expertise
Summit Account Resolution has been in operation since 1996. Available nationwide, it focuses on consumer collections, particularly in medical and dental collections. It promises to uphold professional relationships so you can retain your customers throughout the collections process, avoiding overly aggressive collection tactics.
Contingency fees range from 7.5% to 50%. Depending on the age of the claim and the balance, you could end up paying fees on the higher end of the scale. In some cases, you may have to pay additional fees such as litigation costs to recoup the outstanding debt.
Each month, an account representative will send you a detailed collections report, giving you information on the collections process and where each claim stands.
While Summit Account Resolution does offer commercial debt collection, it does not showcase any international expertise or experience. If you have foreign clients, you may want to choose another agency that specializes in global collections.
Summit Account Resolution is a member of the Association of Credit and Collection Professionals (ACA).
Why We Chose It: For businesses that work directly with consumers on a continued basis, such as medical offices, landlords, and veterinarians, Summit Account Resolution can help you collect the money that is owed to you without damaging the relationship you have with your customers. The agency gives clients detailed monthly reports, and you have access to an online portal to place new accounts into collections.
Best for Small Businesses : Rocket Receivables
Guarantee on fixed-fee collections as low as $14.95 per account
No setup or membership fees
Online portal access
High contingency commissions up to 50%
Debt older than 120 days is automatically placed in stage two
Rocket Receivables, owned by Transworld Systems, Inc. (TSI), is a debt collection agency specifically designed for small business owners. It caters to the healthcare, education, residential, trade, and retail industries, offering simplified debt collection services.
There are no setup or membership fees to begin work with the agency. You only pay a fixed fee or contingency fee for the actual collection activity.
Rocket Receivables has two stages for debt collection:
For accounts that are not yet 120 days past due, stage one is an early intervention debt collection service. With a fixed-fee pricing structure, you keep 100% of the amount collected. Pricing is dependent on how many accounts you have but ranges from $14.95 to $21.95 per account.
As part of stage one, four letters are sent out to debtors—one in your name, and three in Rocket Receivables’—to remind clients of the amount owed.
Rocket Receivables guarantees that you’ll get double the money you invested in its stage one, fixed-fee collections program. If that guarantee is not met, you qualify for a refund.
For older accounts or more complicated cases, stage two includes more intensive debt collection practices, including skip tracing, calls and negotiation tactics, and legal action. Once the client pays, Rocket Receivables will take 50% of the amount recovered.
If Rocket Receivables is unable to collect on the debt, you don’t pay anything. Debt that is older than 120 days is automatically classified as stage two debt, which is subject to the higher contingency commission costs. You can’t opt for that debt to be in the cheaper stage one.
Why We Chose It: While Rocket Receivables is a member of the ACA, it offers small business owners an easy-to-use option with a simple fee structure. For fixed-fee collections in stage one, Rocket Receivables also offers a guarantee: You’ll double the money you pay for the service or you’ll get your money back, minimizing your risk.
Best for Low Invoice Amounts : Prestige Services Inc.
Low debt minimum of $200
Rates may be negotiable on larger accounts
Contingency rates as low as 22%
Added fees for attorneys
Only serves B2B
Prestige Services is a debt collection agency that specializes in the collection of domestic and international commercial accounts. The agency has been in operation since 1996. While most commercial debt collection agencies have high debt minimums, Prestige Services is willing to work with accounts that have outstanding balances as low as $200.
The agency works on a contingency basis. Claims from $301 to $3,000 are subject to a contingency fee of 25%, and higher claims are subject to a fee of 22%. The rate can be negotiated for claims over $20,000.
Prestige Services only services commercial accounts. If you’re looking for a collections agency for consumer accounts, you’ll need to find another company.
Why We Chose It: Because many commercial debt collection agencies have high debt minimums, many businesses may struggle to find an agency willing to work with them. However, Prestige Services is willing to accept accounts with minimums as low as $200, and its commissions are on the lower end of what agencies typically charge.
What Is a Debt Collection Agency?
If an invoice is past due, businesses can hire a debt collection agency to act as a middleman on your behalf to collect on that debt. Typically, debt collection agencies will charge you a percentage of the amount collected. In return, they will do the following:
- Send your client letters via email, post, or fax to notify them of the debt and late payment
- Call the client requesting immediate payment
- Skip tracing to locate clients who have closed or moved operations
- Debt settlement
Debt collection agencies can pursue outstanding debt aggressively, but they must abide by the federal Fair Debt Collection Practices Act, and there are certain tactics agencies are forbidden from doing.
What Is the Difference Between a Debt Buyer and a Debt Collection Agency?
When you hire a debt collection agency, you retain ownership of the debt. You are simply hiring the agency to act on your behalf to recover the outstanding money owed.
By contrast, a debt buyer is a company that buys the debt from you. Once you sell it, you no longer have any access or control over the account. The debt buyer will use their own means to collect the money owed, including tactics like settlement or even litigation.
Hiring a debt collection agency gives you more control over outstanding debts. And, with a reputable company that handles the process professionally, it’s possible to collect the money that’s owed to you and still retain your customers.
When you sell your debt to a debt buyer, you lose that control—and you’ll likely lose a customer, too. However, the tradeoff is that you’ll get an upfront payment. If the customer is no longer a viable client, it may be worthwhile to sell the debt to get some of the money back that is owed to you.
How Should I Choose a Debt Collection Agency?
When choosing a debt collection agency, it’s important to do your homework. Consider the following factors:
- Fees and Commission: A fee structure may include flat fees per account, percent rates on contingency, or a mixture of both.
- Debt Minimums: Collections agencies listed here may collect on an account as low as $200, but often have minimums that are several thousand dollars or more.
- Success and Recovery Rates: Ask for a company's success rate and do the math to see if the fees are worth what you will get back.
- Customer Service: Check online reviews for reports of the company’s customer service.
- Accreditation: Top debt collection agencies are licensed in your state and accredited by trade associations like the Association of Credit and Collection Professionals and the International Association of Commercial Collectors. They also are members of these organizations.
- Litigation: You can look up enforcement actions the Consumer Financial Protection Bureau (CFPB) has taken against debt collection agencies by searching for the company on the CFPB website.
How Much Does a Debt Collection Agency Cost?
When hiring an agency, keep in mind the different cost structures that include:
- Fixed Fees: For fixed-fee collections, you’ll generally pay $10 to $15 per account.
- Commissions: For firms that charge contingency commissions, you should expect to pay 25% to 50% of the total amount of debt collected.
- Setup or Introduction Fees: Some firms charge setup or introduction fees, which can add to your cost.
How We Chose the Best Debt Collection Agencies
To select the above debt collection agencies, we researched 15 national companies. The criteria for measuring each one included minimum debt, fees and commissions, success rates, accreditation, and the inclusion of additional features. The most important factor in determining whether or not an agency was included in our list was transparency in fees. Agencies were immediately eliminated if their fees were not clear.
Plum Consulting. "The Domino Effect: The Impact of Late Payments," Pages 14-15.
Plum Consulting. "The Domino Effect: The Impact of Late Payments," Page 15.
Atradius Collections. "Trade Association Memberships."
Atradius Collections. "Facts and Figures."
Atradius Collections. "Frequently Asked Questions."
The Kaplan Group. "Commercial Collection Agency Services."
The Kaplan Group. "FAQ."
The Kaplan Group. "Commercial Collection Agency Rates."
The Kaplan Group. "Success Rate."
Summit Account Resolution. "Your Questions… Answered."
Rocket Receivables. "Pricing."
Rocket Receivables. "FAQs."
Rocket Receivables. "Stage One: Fixed-Fee Collection."
Rocket Receivables. "Stage Two: Contingency Collection."
Prestige Services. "Commercial Collection Agency Rates."