Debt Recovery

A Cash-Flow Playbook for Accounting Firms, CFOs & Controllers

CPA/Accountants/ CFO are very smart people, and they are the last people who need any financial advice, definitely not us.  However, debt collection is a completely different field. We have assisted several businesses and accounting firms to effectively recover money from their past due accounts.

“One size never fits all: the tactics that move a delinquent business invoice can backfire on a consumer credit card—and vice versa.”

Late-paying clients aren’t created equal. Roughly half of North-American B2B invoices arrive late and about six percent are written off. On the consumer side, 90-day credit-card delinquencies recently climbed to their highest level in more than a decade. The table below shows why your collection strategy must split along B2B/B2C lines:

Why Tactics Diverge

Three-Tier Agency Model That Covers Both Worlds

(Based on 2024-25 agency rate surveys)

CPA/Accountants are very smart people, and they are the last people who need any financial advice, definitely not us.  However, debt collection is a completely different field. We have assisted several businesses and accounting firms to effectively recover money from their past due accounts.

Two Quick Case Studies

• B2B — Software-as-a-Service provider: 110 invoices averaging $3,900 aged 120-180 days. A letter-plus-call campaign collected 77 % in 28 days, preserving renewal contracts and cutting churn credits by 40 %.
• B2C — Healthcare practice: 350 patient accounts averaging $650 stalled more than 90 days. A fixed-fee letter wave recouped 48 % within three weeks; the practice spent just $340 and routed payments directly to its own office.

How to Pick a “Dual-Fuel” Agency

1. Nationwide licensing for both commercial and consumer collections.
2. Separate playbooks—distinct scripts, dashboards, and compliance checks for B2B versus B2C files.
3. Data security that meets SOC-2 and PCI standards; NDAs for corporate AR.
4. Real-time analytics that flip between business scores and consumer FICOs to target effort.
5. Transparent fee ladder—letters flat, calls contingency, legal cost-plus.

Five-Day Action Plan

Recovered cash can fund invoice-automation tools, early-pay discounts, or client-experience upgrades—closing the loop so fewer accounts hit collections next quarter.

If you are looking for a good collection agency for accountants or CPA’s,  or for their clients, we can help you.

Every clogged drain you clear is another invoice -but is it another payment?

Late-paying customers aren’t just an annoyance; they can wipe out the thin 3-5 % profit margin many small plumbing and contracting firms run on. A 2025 survey of 250 U.S. contractors found 70 % experience payment delays, with 64 % resorting to mechanics liens at least once. The good news? Pro-level collection tactics can bring the cash back in—without torching client relationships.

Why the Cash Stops Flowing

Real-world example: Joe’s Plumbing in Ohio was owed $5,200 on a residential re-pipe. After 45 days of silence, they triggered five low-cost reminder letters (about $15 each) through the collection letters service. The homeowner paid in full after letter #3—no phone calls, no liens.

Your Three-Step Collection Ladder

Heads-up: The odds of a friendly resolution drop sharply after 120 days, so move fast.

Extra Tools Contractors Forget to Use

• Mechanics lien rights – In most states you have 60-90 days from last work to record a lien; about 80 % of liens are filed by general contractors.
• Prompt-payment statutes – E.g., California adds 2 % interest per month on overdue public-works invoices.
• Progress-payment schedules – Break big jobs into 25 %, 50 %, 75 %, 100 % checkpoints and withhold further work until each milestone clears.
• Credit-card authorization – For emergency jobs, store a card on file with a signed “completion = charge” line.

Avoid the Low-Ball Trap

Agencies advertising very low contingency rates often rely on automated dialers and recover less. Quality commercial agencies typically charge 15–50 %—but higher recovery means more money in your pocket. Compare with the detailed cost breakdown before signing.

Quick Prevention Checklist

1. Run soft credit checks on new commercial clients (commercial accounts).
2. Send same-day invoices via email + SMS.
3. Offer 2 %/10 Net 30 early-pay discounts; many CFOs bite.
4. Schedule a 30-day reminder call—then escalate to a good collection agency if unpaid at 60 days.

The Bottom Line

You didn’t train for years to become a debt collector. Let professionals chase the checks while you chase leaks. Contact us today and keep your cash—and your reputation—flowing.

Watching only pennies trickle back from thousands in overdue invoices? Low recovery rates aren’t a mystery—they’re a warning sign that something in your collection pipeline is broken and needs a quick fix.

Industry Quick-Take

• Typical success rate: U.S. agencies recover 20 – 30 % of the dollars placed with them—$20–$30 on every $100.

• Time kills accounts: Place a balance within 90 days and recovery can double; wait a full year and odds drop below 10 %.

If your current partner lags behind even these modest benchmarks, run through the checklist below before you replace them—or confirm that you definitely should.

Could You Be Behind the Low Numbers?

• Late placements. After twelve months, the probability of recovery sinks below 15 %.

• Missing documents. Contracts, invoices or service receipts are the collector’s legal ammunition—deliver them within 48 hours of request.

• Portfolio mix. A cluster of bankruptcies or skip-traced accounts drags any metric down; compare your file to industry averages before placing blame.

Real-World Example

ABC Pediatric Clinic sent $50,000 in 120-day-old co-pays to one of NexaCollect’s vetted partners and recovered $24,500 (49 %) within six months—more than double the 22 % rate they saw with their previous agency.

Ready for Better Results?

NexaCollect has already vetted agencies that post 40–55 % recovery on fresh medical and small-business debt—nearly twice the industry mean. Want an introduction? Contact us for a free, no-obligation referral.

Consumer Collections Cost (B2C Recovery)

Collection agencies offer four types of debt recovery services. 

            

First two options are extremely cost effective if your accounts are less than 180 days past due. 

It is recommended to start from Step 1 (written reminders as if they are coming from you), and then gradually move to the next steps till your debtor pays. There is no restriction that you must start from Step 1. You can start from any of the Step of your choice.  

• STEP 1: Pre-Collection (Fixed Fee Service ~ $15 per account)
  In this stage, five contacts or reminders are sent to the debtor, using your company name. Although handled by the collection agency, the account isn’t officially in collections yet. Debtors are instructed to make payments directly to you. These reminders warn the debtor that if the account isn’t settled, it may proceed to collections. The service is fixed-fee, costing around $15 per account. The contacts include two phone calls and three USPS mailings over a 30-day period.
• STEP 2: Collection Demands (Fixed Fee Service ~ $15 per account)
  Similar to Step 1, but now all five contacts are made using the Collection Agency’s name instead of yours. All communications are sent via USPS mail, with no phone calls. The intensity of each demand increases, making it clear to the debtor that their account has been forwarded to collections and the situation is more serious. This service also costs approximately $15 per account, with payments still directed to you. If you choose both Step 1 and Step 2, called the COMPLETE service, the cost for all ten contacts is reduced to about $20.
• STEP 3: Collection Calls (Contingency Fee ~ 40% of the amount recovered)
  At this stage, the tone shifts to more assertive collections. A professional debt collector will begin calling the debtor to amicably resolve the debt. If necessary, the approach will become more firm within legal limits. No threats are made, but collectors know how to apply pressure to secure payment. Collection calls may continue for days, weeks, or even months, depending on the case. You receive 60% of the recovered amount, while the agency takes 40%. This is a “No recovery, No fee” service, meaning the agency only gets paid if they successfully collect. Tools like skip tracing, bankruptcy screening, and credit bureau reporting (if authorized) are used to enhance recovery efforts.
• STEP 4: Legal Suit (Contingency Fee ~ 40% of the amount recovered)
  This is the final step and is reserved for accounts that remain unpaid after multiple collection attempts, especially when the balance is high enough to justify legal action. The contingency fee for legal collections typically ranges around 40%-50%, depending on the case’s complexity.

Commercial Collections Cost (B2B Recovery)

Unlike B2C collections, most accounts of type B2B are directly handled by a debt collector specializing in commercial debt recovery.

Most commercial debts carry higher balances, B2B collection fees are lower than B2C collections. B2B is also a contingency-based collection service, costing 10% to 40% of the amount recovered. No recovery = No Fee.

Due to the complexity of collecting older debts, they typically attract higher fees. Moreover, accounts with smaller balances usually carry higher fees because they result in relatively lower profit margins for the collection agency.

You can check more about Commercial Collections here. The following table will give a rough estimate of B2B collection costs.

Note: Go for a better Agency. Not the cheapest one

Let’s do some Maths:
Collection Agency “A” charges $15 and can collect $500.
Collection Agency “B” charges $20, works harder, and collects $750.

Which one will you select?     
>> Agency “B” <<

 Collection costs of various agencies do not vary significantly, but performance does.

Some agencies genuinely charge more since
– Their services are superior.
– They hire better debt collectors.
– To not give up on your accounts easily.
– They invest in the technology to keep your and your debtor’s data safe.

Collection agency cost is a factor but not the most important one.

The location of a collection agency does not matter either; stop searching for a Collection Agency near you. Select an agency with good debt collectors, high recovery rates, and has licenses to recover in your area.

Honesty and patience reap betters results than being pushy when trying to sell your collections service to a prospective client. Let your prospective clients ask questions about your service before you explain your collection services to them.

1. Understand all services and believe in them:

The sales process requires a deep understanding of the product/service to a level where a Sales Agent believes in the product and is 100% confident that it will benefit his clients. He should understand which service is beneficial for which type of client, make recommendations, and then let clients select the service of their choice. 

Observation: Working as a Sales Representative in a Collection Agency is a very challenging career. Most agencies offer only commission-based payout and no fixed salary component. Although most Sales Reps would love to have fewer very large clients which generate hefty commissions, this never happens for most Reps. The client portfolio of most Sales Reps consists of several small clients, a handful of medium-sized clients, and no large clients. Many Reps will change their career within a couple of months because they cannot make any meaningful money. Due to this sales pressure, a small portion of Reps indulges in presenting partial-truth information about the collection agency they represent.

Being a Sales Rep for a collection agency can be rewarding, but only over a period of time, and cracking that six-figure salary/commissions barrier will take years of hard work. Here are practical and honest tips for individuals looking to make a career in this field.

2. Be honest to your prospective client:

Let me give a few examples where a Sales Rep may not be very truthful for these questions are raised by a prospective client:

Q1) What are your collection rates?
A1) Our collection rates are the highest in the industry.
( Instead, reply with some real collection percentage numbers across various phases of service. Explain to him what results in higher collection rates.)

Q2) Are all your operations located in the USA?
A2) Yes
( Even if your corporate office is located in USA, but maybe your back office IT is located in India, or your call center or support staff is located in the Philippines then you just hid the facts.)

Q3) What guarantee do you offer?
A3) If we do not recover your investment, we will refund your money.
( That’s usually not 100% true, most agencies will return only a partial amount back and withhold any commissions that have been paid out to employees/staff, or there will be additional riders. Instead, tell them that the detailed guarantee terms are mentioned in the agreement.)

Q4) In which collection phase do you recommend I should submit my accounts?
A4) Collection calls – We don’t charge you till we collect.
(Suggest what is best for the clients and not what is good for your own commissions. If the age of debt is less, then suggest a lower fee, fixed fees collection letter service, and not the collection calls which are contingency based and result in a higher cost for the client.)

Check your company’s policy to answer such questions or consult your supervisor for all such questions.

3. Be patient – don’t be pushy:

Pushing hard to seal the deal in the very first call can be a huge mistake. It may work in a few cases, but in most cases, this approach fails. Give adequate opportunity to your client to let them ask as many questions as they like, explain your services clearly, then ask for a follow-up meeting to finally close the sales. Even though many Sales Managers will disagree with this approach, based on my experience, more deals are closed if you are more patient with a client versus when you are pressurizing.