Biggest reasons to hire a collection agency

To keep your business running, you need to collect payments for the products or services you provide. Unfortunately, not all customers are trustworthy. If you are a business owner, you probably don’t have much time. You may not have the time to make frequent calls or write letters in an effort to collect overdue debts. The older the debt gets, the more difficult it is to collect. If your requests for payment have been unsuccessful, using a collection agency can be very beneficial to your business.

Many business owners have an image in their heads about collection agencies (Dutch: incassobureau), and for good reason. In the past, anyone could set up a collection agency without being registered or regulated. Today, there are rules and regulations for collection agencies. Hiring a collection agency is one of the easiest ways for you to put the focus back on your business while someone else handles the collection process. Here are five benefits of hiring a collection agency:

Legal protection

Today there are a host of laws governing the debt collection industry, and knowledgeable clients will not hesitate to go to court if their rights are violated. Collection agencies know this, which is why they are well versed in these laws. A collection agency is familiar with both federal debt collection laws and the laws governing the state in which the agency is licensed. By having a collection agency collect unpaid debts on your behalf, you eliminate the legal risks associated with trying to collect debts yourself.

Successful debt collection

A collection agency is experienced in collecting unpaid debts, and therefore hiring a collection agency increases your chances of collecting past due debts. Your primary focus is running your business, but the primary focus of a collection agency is debt collection. A trained professional knows the best techniques to legally force debtors to pay, and collection agencies pose a much greater threat to debtors than you do. A collection account negatively impacts a debtor’s credit score for up to seven years, and debtors often make arrangements to repay their debts to avoid damage to their credit.

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Collection agencies (Dutch: incassobureau) know that every business owner has unique needs, and they offer a variety of programs to fit different business models. Chances are a collection agency has a program that fits your business model. Some collection agencies pursue debtors for a flat fee, while others receive a commission on the amount they successfully collect. When you meet with a collection agency, ask about the different programs they offer. This will help you find the right agency for your needs.


When collection agencies communicate with debtors, they document it. Should you decide to sue a debtor in the future, the collection agency will have thorough documentation of every time it has tried to contact the debtor. This documentation shows the court that you made a great effort to collect the debt. In addition, if you claim the uncollectible debt as a tax deduction, you must have this documentation for your tax records. In the event of an audit, the IRS will want to see that you have exhausted all options before writing off the debt and claiming it as a deduction.

People pay faster

When you hire a collection agency, people pay you faster and more often. Some collection agencies offer services that speed up the payment process so you get your money faster. These services work with your existing billing process. When you hire a collection agency, you don’t have to spend time tracking down your customers. It saves you time, money and energy so you can focus on what’s really important, your own business.

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