Hiring a Debt Collection agency: 7 crucial benefits for Your business

Running a business requires a constant focus on growth and quality. Unpaid invoices form a frustrating barrier to that progress. When your reminders and demands go unanswered, the question inevitably arises: is it time to hire a debt collection agency?

In this article, you will discover why a professional partner makes a difference for your cash flow, how you can preserve customer relationships, and the specific benefits of our approach.

What is a debt collection agency?

A debt collection agency is a specialized organization that collects outstanding claims from debtors on behalf of a client. While you focus on your core activities, the agency focuses on the amicable phase: collecting payments without the intervention of a court. Should this prove insufficient, the agency can also facilitate legal proceedings to enforce payment.

Why choose a debt collection agency?

Many entrepreneurs wait too long to hire an agency out of fear of high costs or damaged relationships. However, by engaging an external expert, you professionalize your accounts receivable management and significantly increase the likelihood of rapid payment.

Benefit 1: Professional approach to collections

The moment a collection agency takes over communication, the dynamic shifts. Experience shows that debtors are quicker to pay when confronted by an external party. Hiring an agency demonstrates that you take your invoicing and credit management seriously.

Benefit 2: Time savings

Chasing defaulters is a time-consuming process. By outsourcing your collection process, you free up your hands to do what you do best: running your business.

Benefit 3: Legal support

Debt collection legislation in the Netherlands is complex. At Ultimoo, we focus primarily on the amicable phase but can also manage legal proceedings if necessary. This ensures you are guaranteed the correct legal steps from start to finish.

Benefit 4: Improved cash flow

Unpaid invoices represent trapped capital. An effective collection process ensures this money flows back into your business, which is crucial for your liquidity and growth ambitions.

Benefit 5: Better debtor monitoring

By consistently engaging a collection agency when payment deadlines are missed, you create a streamlined process. This prevents customers from viewing your payment terms as 'optional'.

Benefit 6: No fees if no payment is collected (No Cure, No Pay)

Ultimoo usually operates on a No Cure, No Pay basis. This means that if we are unable to collect the claim from your customer, you pay no collection fees to us. This minimizes your financial risk.

Benefit 7: Strengthening your corporate image

Depending on your product or service, we offer a social debt collection method. We can fully adjust the strictness and tone of the process to your needs. This allows the debt to be collected while preserving the customer relationship whenever possible.

When should you hire a debt collection agency?

The ideal moment to hire an agency is immediately after your own payment term and the statutory term of the final demand (the so-called '14-day letter' for consumers) have expired.

Specific scenarios for businesses to hire an agency:

• B2B Collections: For business clients whose payment morale is declining.
• B2C Collections: For consumers where an empathetic yet clear approach (social debt collection) is required.
• Persistent defaulters: In cases of structural avoidance of contact.

Hiring a debt collection agency as a private individual

As a private individual, you may also find yourself in a situation where someone owes you money. Whether you want to hire a collection agency for a private loan or another claim, we are happy to investigate if your claim is suitable for handling. Hiring an agency for private individuals follows the same professional standards as business assignments.

Costs of hiring a debt collection agency

Transparency regarding costs is essential in any collection procedure. At Ultimoo, you always know exactly where you stand.

What are the average costs?

In most cases, collection costs are passed on to the debtor (under the Dutch Debt Collection Costs Act, WIK). Thanks to our No Cure, No Pay model, the risk to clients is kept to a minimum.

What influences the costs?

• Amount of the claim: Statutory collection costs are a percentage of the invoice amount.
• Chosen trajectory: An amicable process is more cost-efficient than legal proceedings. Only if a customer disputes the invoice can costs in the amicable phase be higher.
• Success: Upon success, costs are recovered from the opposing party, resulting in no costs for the client.

Conclusion: Is a debt collection agency the right choice for your business?

Hiring a debt collection agency is a strategic choice that brings peace of mind and financial stability. Whether you are dealing with a one-time defaulter or want to optimize your entire accounts receivable management: a professional approach pays off.

Are you curious about the best option for your specific situation? We would be happy to advise you on the right strategy for your claim, from social debt collection to legal proceedings.