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4 advantages of using a debt collection service

Debt collection can be a time-consuming process. The time needed to track down customers with unpaid bills uses up valuable resources that could be better served operating and growing your business.

Rather than going through the exercise of debt collection on your own, an alternative option is to hire a debt collection agency to help you. Using a collection agency provides you and your business four key benefits.


People who specialize in a certain role are able to complete those tasks more efficiently than someone who doesn't. Debt collection isn't likely something you do on a regular basis as part of your business.

On the other hand, debt collection agencies do specialize in collecting unpaid debts. This allows them to collect debts more quickly and efficiently than if you did it on your own.

More legal protection

There are a number of state and federal laws that have been established to protect consumers from debt collectors. Violating these laws can carry steep penalties that could have lasting effects on you and your business. By working with a debt collection agency, you're partnered with someone that knows the intricacies of these laws, thereby better protecting you from a potential lawsuit.

Better results

Some customers with unpaid bills may simply be unwilling to pay you back. They may believe that you may stop pursing the unpaid debt after a certain period of time.

If your customer hears from a debt collection agency, they may be more likely to pay their bills. Debt collection agencies know which techniques are mostly likely to be successful and are able to impose more serious penalties on people who refuse to pay. This lets your customer know that you're serious about recovering those unpaid bills.

Documented communications

If you're having prolonged challenges getting a client to pay back debt, you may need to file a lawsuit. The documentation provided by the debt collection agency can help strengthen your case in court. The agency will be able to show the effort that went into trying to recover the debt. If you instead choose to write off the unpaid debt on your taxes, you'll want to have that documentation in case you're audited by the IRS.

People don't typically get into business expecting to have to collect unpaid bills. Unfortunately, that's the reality some businesses have to deal with. Considering these benefits can help you determine whether using a debt collection service is advantageous for your business.

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