Why is it important for SMEs to consider collection agency rates?

For most businesses these days collection agency rates are crucial when choosing a collection agency that is right for them, whether they be locally based, be the biggest in the business, or recommended by a business colleague: the decision can usually boil down to price. Collection agency rates, when considered as a small % of the debt collected, can be extremely reasonable and cost-effective to an SME. Once you factor in the time it takes to chase your debts, let alone the stress involved in typing up letters and follow-up action to cement a payment date, and then the customer not paying on that date anyway, collection agency rates work as a productive expense to your business.

A collection agency will often charge on a no win – no fee basis so in terms of your cash-flow this is the best way to do business. Only once your debt has been successfully collected will an invoice be issued to a business for the service, effectively saving you hours of time chasing your money, and outlaying zero money until you get paid.

Collection Agency rates which are competitive are usually calculated on the basis of a successful collection of 3-10% of the debt, which is a small price to pay to set against the time, money and resources an SME would have to put in to successfully collect yourself.

Not least, also, a collection agency knows how to communicate with your customer: in a clear, firm way, and has the technology to schedule follow up action and instigate litigation if necessary. It is imperative collection agency rates are set according to the % debt, and the effectiveness of speed in contacting your customers we feel outweighs the savings on any fees you might not have considered before.

Always consider competitive collection agency rates when protecting your business from bad debt – good debt collection keeps you in business!

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