Debt collection services exist to recover money that creditors cannot efficiently recover themselves. For B2B companies, understanding how these services work is essential for managing accounts receivable effectively.
First-party collection: The creditor's own credit department follows up on overdue invoices. Effective for the first 60-90 days. After that, diminishing returns.
Third-party collection: A professional agency takes over the claim. Higher recovery rates because the debtor recognises escalation. Typically engaged at 60-120 days past due.
Legal collection: Court proceedings and enforcement through specialised firms or the agency's legal department. Necessary for disputed claims or non-responsive debtors.
Verification (is the debtor solvent, is the claim valid, is it within limitation?) followed by demand (local language, local legal references), negotiation (payment plans, settlement), escalation (court proceedings), and enforcement (asset seizure, insolvency).
Contingency: 15-25% amicable, 25-35% litigated. No recovery, no fee. Court costs and legal fees: additional, usually advanced by the agency and recovered from the debtor where possible.
Professional agencies provide a case management portal with real-time status updates, regular reporting on actions taken and debtor responses, legal advice on escalation decisions, and transparent fee breakdowns.
Our debt recovery agency with over 21 years of experience provides: Business to Business Collections Services, Legal Debt Collections and worldwide Skip Tracing services.
