Why and When to Hire a Collection Agency

Is there anything more annoying than unpaid invoices? Being an entrepreneur can be fun, but it can also be really annoying, like when you notice your big invoice gets ignored by your debtor. Sometimes it’s a small miscommunication or mistake that can be solved with one phone call or one email. But sometimes it’s impossible to reach your contact … and that’s when you know something is up. When you can’t reach the person that’s supposed to pay your invoice, it’s time to take action. In this article, we’ll tell you more about why and when you should hire a collection agency.

When should you hire a collection agency?

Once you’ve tried calling/mailing your contact and you’ve sent them a payment reminder, it’s time to take the next step and look for a collection agency (Dutch: incassobureau).

Why is hiring a collection agency a good idea?

There’s a few reasons why a collection agency can help you out when you’re “stuck” a.k.a. you can’t reach anyone at the company that needs to pay your invoice.

First of all: the agency only has one focus: retrieving your money. You need your energy for other things, like your day-to-day business. Let them handle this and stop stressing!

Second of all: usually your debtors realise you mean business when a collection agency starts contacting them. They know what a collection agency can do, for instance hire a bailiff (Dutch: deurwaarder inschakelen) to seize their assets. Often, just the thought of that happening makes them pay.

A big third reason is that a collection agency can access info you don’t have. You might only have an email address and a phone number of your client, but they can access all kinds of information about companies. They can for instance track down who owns a company when it seems impossible to figure out.

How to find a trustworthy debt collection agency

Unfortunately, debt collectors often have a bad reputation. And we’re not gonna lie: there are some real cowboys out there, so it’s important to always read the fine print before you sign a contract. But luckily there are also really good agencies out there.

Before deciding on a collection agency, take a look at their Google reviews. It’s always a good way to see how others rate their experience with the agency. If you see multiple good reviews, you can go visit them. When you’re there, make sure to ask which kind of pay system they use.

We recommend the ‘no cure, no pay’ system, which means that you only have to pay the collection agency if they’re successful in retrieving your money. It doesn’t happen often that they’re unsuccessful, but you don’t want to be one of those unlucky people that doesn’t get their money back … ánd has to pay. That’s why it’s a good idea to ask them their ROI percentage to know how good they are. Of course don’t forget to ask what they charge!

Good luck in getting your money back!