Collection agencies can be a costly and time-consuming endeavor for businesses. Collection agency cost generally ranges from $35 to $65 per hour, with some companies charging up to $100 an hour. These agencies are not cheap, but the benefits of their services may outweigh the costs in certain situations. This article will explore three things that you need to know about collection agency costs before hiring one.
They Can Be Expensive
These agencies have experience dealing with people who owe money, which allows them to get your accounts receivable settled faster. Collection agencies can also negotiate lower settlement amounts than you would be able to do alone because they know the industry and how much companies are willing to settle for. For this reason, they can be costly.
It Can Take Time
Debt collection takes time. This is because the agency has to negotiate with the debtor, make phone calls and send letters. This can take weeks or months. Collection agencies are impatient by nature because they have a job to do that is measured in dollars. When you work with them, be patient too, because it will not happen overnight.
Considerations Before Hiring One
Before hiring a collection agency, you need to decide if this is a good fit for your company. Think of what your end goal is; are you looking for a short-term fix or long-term solution? These agencies can be expensive in terms of fees and interest rates. They also have no qualms about adding their charges onto the debt that may not even exist or are valid because they know what companies will pay out to get rid of bad debts
Collection agencies are a great investment if you can afford to spend money on them. They will get results, but the end game is always about how much longer you want that debt hanging over your company’s head and what kind of effort (in terms of time, energy, and resources) you want to put into it.
