Best Collections Agencies
One of the biggest stresses for business owners is collecting money from unpaid invoices. A global Sage study found that small and mid-sized enterprises receive payments late or not at all for 11% of their invoices, costing them over $1 trillion annually.
You might think that you have no choice but to chase after delinquent clients to get your money, but you do. Collection agencies can take that burden off your shoulders so you can concentrate on the core tasks to grow your business.
Sure, you will incur additional costs in terms of fees, but consider the savings in time and energies that you can now divert to scaling your business instead. And, if you choose the right company for debt collection, you can think of it as money well spent.
To help you with that, we put together a list of the best collections agencies today.
Atradius Collections
Atradius Collections is a commercial debt collection agency in the Netherlands with operations in 30 countries and has been around since 1925. As a member of the Credit Services Association, the Federation of European Credit Management Associations, and the International Association of Commercial Collectors, it has handled over 90,000 cases for more than 15,000 clients.
We like Atradius because it does not use aggressive, contentious methods during debt collection, leaving clients with the choice of resuming good working relationships with their customers. It also does not impose a minimum on the debt they collect. The service fee depends on the amount and location.
The standard commission rate is not available on the site. However, it supplies a free instant quote without having to speak to a representative, and it is the only collection agency to do so.
Atradius imposes a 2% commission above their standard rate for overdue invoices going back 180 days or more. They do not usually have upfront fees but may require a one-time introduction fee if the client wants to collect from an international customer.
Aside from debt collection, Atradius offers the following services:
- Legal collections
- Accounts receivable management support and outsourcing services
- Insolvency services
- Invoice checking
- Standby servicing
Atradius also has Collect@Net, an online platform that clients can access to monitor the progress of their cases.
The Kaplan Group
The Kaplan Group is a well-established B2B collections agency based in Los Angeles, operating since 1991. The Better Business Bureau (BBB) accredits it with an A+ rating. The Kaplan Group claims an 85% success rate compared to the 50% industry success rate for invoices that are seven months past due.
The agency offers the following as part of its collection process:
- In-house legal team: The agency will bring in the legal team at no cost to the client if the debtor does not pay.
- Background check: Investigation into the debtor’s operations and profitability to help negotiations.
- Skip tracing: The agency will look for debtors who have moved or closed operations.
- Credit analysis: The Kaplan Group will evaluate the debtor’s ability to pay by analyzing their personal and business finances.
- Settlement agreement: The agency will negotiate a settlement if the debtor cannot pay the full amount of the invoice.
The Kaplan Group does not require clients to pay setup or membership fees. It works on contingency, meaning clients only pay when the agency collects.
The contingency fees may seem a bit high at 15% for claims between $50,000 and $500,000. However, it goes down to 10% for anything over that. The case is different if the debtor is outside the US; the fee is then 30% regardless of the claim amount.
The Kaplan Group requires a minimum claim of $10,000 for new clients, and a minimum of $1,000 for succeeding claims, with some exceptions.
Summit Account Resolution
Summit Account Resolution (Summit A•R) is a collection agency that operates solely in the US and has been around since 1996. It has resolved over 12,700 accounts in the past 12 months and recovered over $140 million for clients to date. The BBB accredits Summit A•R with an A+ rating and it is a member of the Association of Credit and Collection Professionals.
Summit A•R focuses on consumer medical and dental collections. The agency pledges to avoid aggressive collection tactics and to maintain a professional attitude in the collections process to help clients maintain positive relationships with customers.
Among Summit A•R’s services are the following:
- Consumer Collections
- Medical Collections
- Employee Reimbursement Collections
- Commercial Collections
- Dental Collections
- Other Services
Summit A•R works on contingency. The fees start at 7.5% but can go as high as 50%, depending on the age and balance of the claim. If the debt collection leads to legal action, clients may have to pay for the added costs of litigation. The agency does not claim any expertise in collecting debt from accounts outside the US.
The agency works directly with its clients such as landlords, medical offices, dental clinics, and veterinarians. It provides an online portal where clients can add new claims for collection. Clients receive a detailed collections report every month.
Rocket Receivables
Rocket Receivables is a credit collection services company designed for small business owners. Powered by the accounts receivable management company Transworld Systems, Inc., Rocket Receivables offers simplified debt collection to retail, residential, healthcare, trade, and education industries.
Clients do not have to pay membership or setup fees. They pay either a fixed or contingency fee, depending on the nature of the claim. Clients can opt for Stage One for straightforward claims for accounts less than 120 days past due, which involves paying a fixed fee between $14.95 and $21.95 per claim. Rocket Receivables guarantee that clients will get back at least double the fixed fee they paid or their money back.
For accounts older than 120 days or more complicated claims, Rocket Receivables offers clients Stage Two on contingency, a more intensive debt collection service. It includes settlement negotiations, skip tracing, and legal pressure.
Under Stage Two, Rocket Receivables takes 50% of the recovered amount if it succeeds in collecting the debt. However, if the company fails to collect on the account, the client does not pay anything. Debts older than 120 days automatically go to Stage Two. Clients have no option to downgrade to Stage One.
Rocket Receivables makes it easy for small business owners to quickly get their money from delinquent accounts without paying through the nose with Stage One. The costs of Stage Two are a bit steep, but clients still come out ahead when Rocket Receivables get back any money from old debts. There is very little risk involved for clients either way.
Prestige Services
Specializing in domestic and international commercial debts and accredited by the BBB, Prestige Services is a collections agency based in Nebraska and operating since 1996.
What works in Prestige’s favor is that it takes on claims as low as $200 and works on a contingency basis. Prestige is the best alternative for businesses that do not qualify for the services of most other commercial debt collection agencies because of high minimums.
However, Prestige’s contingency fees are somewhat on the higher side. Accounts valued between $200 to $3,000 involve a contingency rate of 25%. Higher claims involve a slightly lower rate of 22%, with claims over $20,000 subject to negotiation.
Prestige only works with commercial accounts, so if you have a consumer account you want to recover in the US, you should consider Rocket Receivables or Summit A•R.
IC System
When it comes to B2C collection, IC System might be the collections agency of choice. It has been in the business for 80 years and has a BBB rating of A+. It is also licensed and bonded to operate in all 50 states in the US.
While IC Systems offers a similar service to Rocket Receivables in terms of the flat fee with contingency-fee options for debt recovery that makes it favorable for small business owners, it is slightly more affordable.
For its two-stage Recovery Plus program, IC Systems offers a flat fee of $14.95 per account. The first stage is issuing a demand letter informing the debtor that the account is now in collections. The second stage involves steps to recover the money. If IC System succeeds, the client receives 100% of the recovered amount. However, there is no money-back guarantee.
The Premier Collect Plan, on the other hand, is for older and more complex accounts. IC Systems does credit reporting to the major credit bureaus, credit monitoring, and litigation referrals when legal action is necessary, and clients pay only if the agency recovers the money, with the agency receiving 25% of the recovered amount.
After Thoughts
Most people look askance at collections agencies, doubtless because of their negative experiences with unethical debt collectors. However, all the collections agencies on this list have an excellent reputation for professionalism.
Collecting on unpaid invoices and accounts receivables does not always require the intervention of professional collections agencies. If you have a good relationship with the customer, you can often settle with them privately.
However, when recovery takes up too much of your time, it is time to call in the big guns. The best collections agencies on our list cater to most businesses, so you are sure to find one to suit your needs.
