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?
Lisanne Gray, Business Development Executive at CBY Professional Services, has 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. Gray encourages companies never to offer services on a handshake agreement.
“There’s nothing a credible agency can do without paperwork,” she says. “People tend not to read the small print, but if what’s in the small print is clear about what happens when you don’t pay, that’s important.”
Set timelines and stick to them: Encourage your entire team to adhere to your payment policy timelines. Gray recommends sending a letter after 60 days of nonpayment informing a client that you plan to send the bill to collections in 30 days.
“Make sure you’re following up on it and are consistent with all your clients,” Gray says. “Repetition will happen organically if everyone is doing it.”
Be sure not to wait too long before turning a bill over to a collection agency. For most agencies, the older a bill, the higher the commission rate once payment is received. CBY Professional Services typically won’t contract to go after payments that are more than two years overdue.
Collect client info, especially emails: In the past, collection agencies legally couldn’t contact account holders via email. That policy has changed, with email becoming one of the key tools that agencies such as CBY can use to connect with debtors.
CBY and other reputable agencies also can employ an investigator known as a skip tracer and other means to find people who might not want to be found.
“People may run and hide and throw away their old cellphones. The more info you have, the better we can find them,” Gray says.

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 and foremost, make sure a collection agency is legitimate. Also, ensure 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.
“Make sure you’re working with a credible, accredited collections agency. You could lose your whole business if you work with the wrong agency,” Gray says.
Empathy: The way an agency communicates with your clients can make or break relationships and payment outcomes.
“Take time to get to know your collection agency,” Gray says. “What is their strategic outreach style to the masses? Are they trying to dial and harass, dial and harass; or are they trying to have a conversation with the person on the other end to explain the pros and cons of paying versus not paying?”
Payment: Most reputable collection agencies work on a commission basis, meaning they are paid only when they receive payment from a debtor. Gray encourages companies to compare commission rates and keep an eye out for hidden fees.
Results: If you’re not seeing the results you want from your collection agency after a year or two, it might be time to find a new agency. While no agency is able to collect 100 percent of payments owed, a reputable, accredited agency, trained to connect with clients and spell out the benefits of making payment, is going to help you get as much of your hard-earned money as possible.
“Your best bet,” Gray says, “is to partner with a company who is going to have your best interest in hand and who is going to be able to have a conversation with you, look at your client list that owes you money, and see if they can help.”