Unpaid invoices quickly can become a major headache for businesses that don’t collect payment at the time of service. No matter what business you’re in, chasing payments can be time-consuming, frustrating, and damaging to client relationships.
When is it time to call in a professional collection agency to take the burden off your plate? And how do you ensure you’re partnering with a reliable company that gets results without compromising your reputation?
CBY Professional Services shares insights that could save your business time, money, and stress.
Three steps before you hire
Handling one or two unpaid bills might be manageable through a local district judge, but when you’re juggling multiple overdue accounts, it’s time to consider hiring a collection agency. Partnering with professionals can save you valuable time and expense, while their expertise ensures results without jeopardizing your relationships with clients.
Before you enlist that help, it’s crucial to have solid policies in place addressing the collecting of payments and nonpayment. Without a clear, consistent plan, chasing unpaid bills becomes an uphill battle, and that hill only gets steeper over time. Take these three steps first:
Have clear contracts: Payment policies must be in writing for a collection agency to take action. CBY recommends never offering services on a handshake agreement. A credible agency cannot act without documentation. Make sure the small print clearly explains what happens when someone does not pay.
Set timelines and stick to them: Encourage your team to follow your payment policy timelines. CBY recommends sending a letter after 60 days of nonpayment informing a client that you plan to send the bill to collections in 30 days. Follow up consistently across all clients so the process becomes second nature.
Do not wait too long before turning a bill over to a collection agency. For most agencies, the older a bill is, the higher the commission rate once payment is received. CBY Professional Services typically will not contract to pursue payments that are more than two years overdue.
Collect client info, especially emails: In the past, collection agencies legally could not contact account holders via email. That policy has changed, and email is now one of the key tools agencies such as CBY can use to connect with debtors.
CBY and other reputable agencies can also employ a skip tracer and other lawful methods to find people who may not want to be found. People may run and hide and discard old cellphones. The more accurate contact information you have, the easier it is to locate them.

Four things to look for in a collection agency
Choosing the right collection agency is essential to recovering unpaid debts while protecting your business’s reputation. Here are four key factors to consider when making your decision.
Accreditation: First, make sure the agency is legitimate and accredited. Confirm that it is licensed to work in the state where your clients reside. Some cities and states require additional licensure to make collection calls in their areas. CBY recommends partnering only with credible, accredited firms to avoid unnecessary risk to your business.
Empathy: How an agency communicates with your clients can make or break relationships and payment outcomes. Take time to understand the agency’s outreach style. Are they focused on harassing phone-banks, or on respectful conversations that explain the pros and cons of paying versus not paying?
Payment: Most reputable agencies work on a commission basis and are paid only when they receive payment from a debtor. CBY recommends comparing commission rates and watching for hidden fees.
Results: If you are not seeing satisfactory results after a year or two, it may be time to find a new agency. No firm can collect 100 percent of payments owed, but a reputable, accredited agency that is trained to connect with clients and explain the benefits of paying should help you recover as much of your hard-earned money as possible.
Your best bet is to partner with a company that has your best interest in mind, can have a clear conversation with you, and is willing to review your client list to see how they can help. CBY recommends starting with a straightforward assessment and action plan.