When overdue invoices start piling up and clients stop responding, many business owners reach a point where hiring a collection agency becomes the most practical step. But before bringing in a professional debt collector, it’s important to understand how the process works, what you’ll need to prepare, and how to choose the right agency. This guide covers everything from how to send a bill to collections to knowing how much it costs to hire a collection agency, giving you the clarity and confidence you need to move forward.
Why Businesses Consider Hiring a Collection Agency
Unpaid invoices can quickly derail a company’s cash flow. Even a small number of delinquent accounts can affect payroll, inventory, operations, and growth. While many businesses attempt to collect debts internally, there comes a point when time, resources, and expertise run out. That’s when hiring a collection agency is not just helpful—it’s essential.
Collection agencies specialize in locating debtors, negotiating payments, complying with legal requirements, and securing higher recovery rates than most internal teams can achieve. The right agency serves as a partner in financial stability, allowing business owners to stay focused on running their company.
Signs It’s Time to Send an Account to Collections
Understanding when an account is ready for outside help is a critical part of sending someone to collections. While every industry is different, several universal signs indicate it’s time to escalate:
1. The customer hasn’t responded in 60–90 days
Once a bill is more than two billing cycles overdue, the chances of collecting drop sharply. Debts older than 90 days are significantly less likely to be recovered.
2. Contact information no longer works
If phone numbers are disconnected or emails bounce, proactive action is necessary.
3. The customer makes repeated promises—but never pays
Broken payment arrangements are one of the strongest indicators that the debt may require professional intervention.
4. Disputes appear late in the process
Last-minute disagreements are sometimes used as stall tactics. A collection agency can help resolve legitimate disputes—and recognize frivolous ones.
5. Your staff is spending too much time chasing unpaid invoices
When collections begin pulling employees away from their primary responsibilities, outsourcing becomes the efficient solution.
If any of these situations sound familiar, you’re not alone. Most businesses eventually need to learn how to send a bill to collections effectively—and having the right guidance makes all the difference.
What You Need to Send Someone to Collections
Before hiring a collection agency, gather the documentation that confirms the debt is valid and enforceable. While requirements vary slightly, most agencies will request:
A copy of the original contract or agreement
This establishes the terms, obligations, and payment expectations.
All invoices and account statements
Proof of charges, dates, and balances owed.
A record of your collection attempts
Emails, letters, call logs, and payment reminders help demonstrate good-faith effort.
Notes regarding disputes (if any)
Agencies need to know what the debtor has claimed so they can respond appropriately.
Personal or business contact information
Phone numbers, addresses, emails, references, and any other relevant data.
Having these materials ready can speed up the recovery process and help ensure the agency begins collections with a complete understanding of the situation.
How to Send a Bill to Collections
If you’ve never worked with a collection agency before, the process may seem unfamiliar. Below is a simple walkthrough showing exactly how to send a bill to collections:
Step 1: Determine that the account qualifies
Use the signs mentioned earlier—age of debt, lack of response, broken promises, etc.
Step 2: Contact the debtor one final time
A clear final notice often states that the account will be transferred to a collection agency if payment is not received by a specified date.
Step 3: Gather documentation
Compile contracts, invoices, statements, and communication records.
Step 4: Submit the account to the collection agency
The agency will review the information, confirm eligibility, and begin outreach.
Step 5: The agency begins professional collection efforts
This may include calls, letters, skip-tracing, negotiation, payment plan setup, and—if applicable—credit reporting.
Step 6: You receive updates and collected payments
Transparent agencies offer frequent status updates, giving you full visibility into progress.
This structured approach ensures a smooth transition from internal to professional collections.
What Happens After Sending Someone to Collections?
Once the account is officially placed, the collection agency moves into action. Their process typically includes:
Skip-Tracing
If contact information is outdated, agencies use databases and investigative tools to locate the debtor.
Initial Outreach
The agency notifies the debtor that the account has been placed for collection and requests immediate resolution.
Negotiation and Payment Arrangements
Professional collectors are trained in negotiation and can secure lump-sum payments or compliant payment plans.
Credit Reporting (when applicable)
Reporting an unpaid debt can create urgency for repayment.
Ongoing Follow-Up
Agencies follow a structured, regulated contact schedule designed to maximize recovery while remaining compliant with all laws.
Legal Review (in select cases)
If the debt is large and the likelihood of recovery is high, the agency may recommend legal action. This is always done with your approval and typically only when necessary.
Throughout this process, a reputable agency ensures compliance with all federal and state regulations—something that is essential when hiring a collection agency.
How Much Does It Cost to Hire a Collection Agency?
One of the most common questions business owners ask is:
“Exactly how much does it cost to hire a collection agency?”
Most agencies operate on a contingency fee structure.
This means you only pay when the agency successfully collects the debt.
Fees typically range anywhere from 20% to 40% depending on factors such as:
- Age of the debt
- Balance size
- Whether the debtor is a business or a consumer
- Whether the account requires legal action
- Volume of accounts placed
- Industry risk profile
This model benefits businesses because:
- There are no upfront costs
- The agency is motivated to collect aggressively and ethically
- There is zero financial risk to the client
Some agencies also offer flat-fee or early-stage collection services, but contingency remains the industry standard.
How to Choose the Right Collection Agency
Not all agencies operate the same way. Selecting the right partner is essential for recovery success and protecting your company’s reputation.
1. Look for industry experience
Choose an agency that understands your sector—medical, commercial, professional services, etc.
2. Verify compliance
They must follow federal and state regulations when sending someone to collections.
3. Review their communication approach
Professional communication preserves your brand image.
4. Confirm transparency and reporting
You should receive regular updates, online access, and detailed reporting.
5. Check for technology and skip-tracing capabilities
Modern agencies use advanced tools to improve recovery outcomes.
6. Evaluate customer service
Responsiveness and accessibility matter—especially when you need answers quickly.
The right agency should feel like a partner, not just a vendor.
Frequently Asked Questions Before Hiring a Collection Agency
How long should I try collecting before outsourcing?
Most businesses send accounts to collections after 60–90 days of non-payment.
Can I send someone to collections without a contract?
Yes—if you have invoices, work orders, or proof of the relationship. A contract helps but is not always required.
What if the debtor disputes the charges?
A collection agency can help resolve disputes and validate the debt professionally.
Will sending someone to collections damage my customer relationship?
In many cases, agencies help restore communication and reach a solution. Professional, respectful collectors can preserve relationships.
Can I use a collection agency for small amounts?
Yes. Many agencies accept accounts of all sizes, especially if you have multiple past-due customers.
Final Tips for Businesses Considering Hiring a Collection Agency
- Act early—waiting too long lowers recovery chances.
- Maintain detailed documentation.
- Stay consistent with invoicing and follow-up.
- Use clear payment terms in contracts.
- Partner with an agency you trust like Collection Recovery Services.
When done correctly, hiring a collection agency dramatically increases your chances of recovering unpaid revenue while saving your team time and stress.
Ready to Recover Your Past-Due Accounts?
If overdue invoices are slowing down your business, now is the time to take action. Our experienced agency can walk you through exactly how to send a bill to collections, what documentation you need, and what to expect every step of the way.
Collection Recovery Services is here to help you recover more money—faster, compliantly, and with unmatched customer service.
Get in touch today to hire a skilled debt collector and take control of your receivables.
