What is your success rate?

Commercial Collection Firm of America has an 90% success rate on viable accounts. One of, if not the highest in the industry.

Can you help collect a debt from an individual?

We do not collect from individuals unless the debt was incurred for business purposes.

What customer information is required to start the collection process?

To start the collection process, we need the customer's name, address, phone number, date of the invoice, amount due, and a copy of the most recent statement. Additional documents such as credit applications, contracts, promissory notes, or agreements can be sent after the account is placed. You can place your account by clicking here.

What is your remittance process?

Funds collected between the 1st and 15th will be remitted by 1st of the following month. Funds collected between the 15th and 30th will be remitted by the 15th of the following month.

Will my customer still want to do business with me?

Protecting our client’s brand is a top priority and we stand behind this unapologetically. Our firm represents our clients in a very professional manner. We aim to keep the bridge open between our clients and their customers once they satisfy the balance owed.

HOW TO SEND SOMEONE TO COLLECTIONS

A STEP-BY-STEP GUIDE TO THE COLLECTIONS PROCESS FOR BUSINESS OWNERS

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Introduction

You're owed money. The invoice is weeks or months overdue. Friendly reminders haven't worked. It's time to consider sending the account to collections. But before you do, there are critical decisions to make, and the biggest one is understanding whether you're dealing with a business debt or a consumer debt. This decision determines everything: which agency you use, how they can contact the debtor, and what recovery options are available.

This guide walks you through the entire process: understanding the type of debt you're collecting, gathering the right documentation, choosing the right collection agency, and understanding what happens if the agency can't collect through traditional methods.

When Should You Send an Account to Collections?

Before you involve a collection agency, you need to know when it's actually the right time. Jumping to collections too early can damage relationships. Waiting too long dramatically reduces your chances of recovery. Here's the timing.

Clear Indicators It's Time to Escalate

30+ Days Overdue – The invoice is now significantly past due. If you haven't already, make a formal demand.
Multiple Collection Attempts with No Response – You've called, emailed, and sent reminders—and the debtor is ignoring you.
Debtor Acknowledges the Debt but Won't Pay – They admit they owe it but claim cash flow problems or are making excuses.
You've Offered a Payment Plan and They Broke It – They agreed to terms, made one payment, then disappeared.
Amount Is Material to Your Business – This isn't a $500 invoice; it's significant enough to warrant collection effort.
Debtor Is Avoiding Contact – They're dodging calls, their phone is disconnected, or their staff won't put you through.
You've Tried Direct Negotiation and Failed – You've escalated to their CFO or owner and still got nowhere.

Rule of Thumb: By day 30, if the debtor hasn't paid and isn't responding to your direct efforts, it's time to start thinking about a collection agency. By day 60, you should have one engaged. Every day that passes reduces your recovery probability significantly.

When NOT to Send to Collections

Don't use a collection agency if:

The amount is so small that agency fees would exceed recovery (e.g., a $300 invoice)
You have a strong ongoing relationship you want to preserve
The debtor has a legitimate dispute and you're still negotiating resolution
You haven't made a sincere effort to collect on your own first
The debtor is clearly insolvent and has no assets to levy against

Step 1: Understand the Type of Debt You're Collecting

Commercial Collections vs. Consumer Collections: This Matters

The first and most important decision is identifying whether you're collecting a commercial debt or a consumer debt. This isn't a technical detail, it's the foundation of your entire collection strategy. Different laws apply. Different agencies handle them. Different approaches work. Get this wrong, and you may waste months working with the wrong collection partner.

Bottom Line: If the person or entity that owes you money is operating a business (regardless of how small), you need a commercial collection agency, not a consumer agency.

Watch Out: Sole Proprietors and Personal Guarantees

Here's where it gets tricky. A sole proprietor is technically a person, but they're operating a business. If you extended credit to someone operating as a sole proprietor (maybe for a contracting business, consulting firm, or personal services), you're dealing with a commercial debt. The fact that there's one person behind it doesn't change that.

Similarly, if a business owner personally guaranteed a debt (signed a personal guarantee on a commercial contract), the debt is still fundamentally commercial. Use a commercial collections agency.

Step 2: Gather the Documentation You'll Need

Before you contact a collection agency, get your documents in order. The stronger your documentation, the easier it is for the agency to collect, and the better your recovery options if traditional collection fails.

Essential Documents:

Original Invoice(s) – The invoice showing the amount owed, date issued, due date, and description of what was provided.
Proof of Delivery – Shipping confirmation, signed delivery receipt, delivery tracking, or proof the service was completed.
Contract or Terms – Any written agreement, purchase order, or terms & conditions the debtor agreed to (email confirmation counts).
Written Communication – Emails or messages between you and the debtor acknowledging the debt or discussing payment.
Payment History – Records of any partial payments made, so the agency knows the exact remaining balance.
Credit Application – If the debtor filled out a credit application, this shows they agreed to your payment terms.

The ideal scenario: you have an invoice, proof of delivery, a signed contract, and email acknowledgment from the debtor. But even if you only have an invoice and delivery confirmation, that's usually enough to get started.

What If You Don't Have Perfect Documentation?

Don't panic. Tell the collection agency upfront what you have and don't have. They work with incomplete documentation all the time. Having an invoice and proof of delivery (even partial) is usually sufficient. What you're trying to avoid is having literally nothing—no invoice, no documentation, just a verbal agreement. That's much harder to collect.

Step 3: Choose a Reputable Collection Agency

Not All Collection Agencies Are Created Equal

This is critical: the collection agency you choose can be the difference between recovering your money and writing it off. Many agencies take a volume approach—send letters, make calls, move on. If letters and calls actually solved the problem, you wouldn't need an agency in the first place. You're paying for something different.

How to Evaluate a Collection Agency

1. Verify They Specialize in Commercial Collections

Look for agencies that specifically market themselves as commercial, B2B, or business debt collection agencies. Many agencies do both consumer and commercial, but the best ones specialize. Commercial debt requires understanding business operations, decision-making structures, and negotiation tactics that are different from consumer collections.

2. Check Their Reputation

Start with two resources:

Google Reviews & Their Website – Look for case studies, success rates, and client testimonials. Do they brag about investigations? Do they mention working with attorneys?
Better Business Bureau (BBB) – Check if they're accredited and look at their complaint history. Are complaints resolved? How long have they been in business?

Red flags: New agencies with no track record, multiple unresolved complaints, or no information about their processes.

3. Ask About Their Approach (This Is the Key Question)

When you call a potential agency, ask: 'What's your approach to collecting commercial debt?' Listen carefully to the answer.

Volume-based agencies will tell you: 'We send demand letters, make phone calls, report to credit bureaus.' That approach has a place, but it's not the approach you want if you're serious about recovery.

High-recovery agencies will tell you: 'We investigate the debtor's financial situation, identify their assets, research their customer base, analyze their cash flow, and determine what recovery options exist beyond traditional collection. If negotiation fails, we coordinate with attorneys who can pursue judgment and post-judgment collection.'

The difference: a volume agency charges low fees but recovers on maybe 30-40% of referred accounts. A high-recovery agency charges more but recovers on 60-70% because they do real investigative work.

Step 4: Evaluate Agencies on Returns, Not Just Rates

The Temptation of Low Rates (Don't Fall for It)

When you call a collection agency, they might quote you a 15% contingency fee. Another might quote 25% or 30%. Your instinct might be to go with the lowest rate. Resist that instinct. What matters is not the rate—it's the return.

Example: You have a $50,000 account. Agency A quotes 15% and recovers $30,000. You net $25,500. Agency B quotes 30% and recovers $45,000. You net $31,500. Agency B's higher rate results in $6,000 more in your pocket. That's the math that matters.

Questions to Ask Before Engaging an Agency

What's your recovery rate on accounts similar to mine (amount, age, type of debtor)?
What's your average settlement rate? Do you often recover 100% or is it typically less?
Will you conduct financial investigation on the debtor? Will you research their assets?
Do you have attorneys on staff or relationships with attorneys who can file suit if needed?
Can you report to business credit bureaus (Dun & Bradstreet, Equifax, Experian)?
What's your timeline? When can I expect first collection activity?
How often will you report back to me on collection progress?

An agency's answers to these questions will tell you whether they're the cream of the crop or just another volume player.

Understanding Collection Agency Fees

Collection agencies don't charge upfront fees (legitimate ones don't, anyway). They profit when you profit. But there are different fee models, and understanding them is crucial to making the right choice.

Fee Model 1: Contingency (Most Common)

The agency gets a percentage of what they collect. This is the most common model for commercial collection.

How it works: You pay nothing if they don't collect. If they collect $50,000, and the fee is 25%, they take $12,500 and you get $37,500.

Typical range: 20-50% depending on account age, amount, and complexity. Older accounts (90+ days) have higher percentages.

Advantage: You only pay if you recover money. Their incentive is aligned with yours.

Disadvantage: Higher percentage of recovery goes to the agency. But this is often worth it for improved recovery rates.

Fee Model 2: Flat Fee or Retainer

You pay a set monthly or upfront fee regardless of whether they collect anything.

How it works: You might pay $500-$2,000 per month or $5,000 upfront to send an account into collection.

When it's used: Often for high-volume relationships or agencies with strong recovery track records. You trust them to perform.

Advantage: Predictable cost. Good if you refer lots of accounts and can absorb the fee structure.

Disadvantage: You pay whether they collect or not. Only works if the agency has a strong track record.

Fee Model 3: Hybrid (Flat Fee + Contingency)

You pay a smaller retainer plus a reduced contingency percentage on collections. This balances risk between you and the agency.

Most reputable commercial collection agencies use contingency or hybrid models. Avoid agencies that demand upfront fees with no contingency component—those are often less motivated to actually collect.

The Fee Question You Must Ask

Don't just ask, 'What's your fee?' Ask: 'What's your typical recovery rate at that fee level, and what's my net after you take your cut?'

Example: Agency A: 'We charge 20%. We typically recover 50% of the account value.' You have a $100,000 account: 50% recovery = $50,000. Your net after 20% fee = $40,000. Agency B: 'We charge 35%. We typically recover 85% of the account value.' Same $100,000: 85% recovery = $85,000. Your net after 35% fee = $55,250. Agency B's higher fee results in $15,250 more in your pocket.

Step 5: Understand Your Options If Traditional Collection Fails

What Happens When Demand Letters and Phone Calls Don't Work

Let's say the collection agency works your account for 90-120 days and gets nowhere. The debtor either can't pay or won't pay. Now what? This is where you need to know what options are available—and the collection agency's answer to this question should have influenced your choice in the first place.

Option 1: Litigation and Judgment

The collection agency can refer your account to an attorney to file suit. The attorney will file a complaint in civil court, and the debtor will have a chance to respond. If the court rules in your favor (likely if your documentation is strong), you get a judgment—a court order stating the debtor owes you the money.

Getting a judgment is half the battle. The next step is executing on that judgment.

Option 2: Post-Judgment Collection

Once you have a judgment, there are several ways to collect:

Bank Garnishment – The court orders the debtor's bank to freeze funds and send them to you.
Wage Garnishment – If the debtor or owner has a salary from another source, wages can be garnished.
Lien on Business Assets – A lien can be placed on equipment, inventory, real estate, or other assets.
Levy on Accounts Receivable – If the debtor's customers owe them money, you can levy those customer payments.

Post-judgment collection is powerful. Many debtors who ignored your agency will suddenly take collection seriously once they realize you're willing to garnish their bank account or freeze their business assets.

This Is Why Agency Choice Matters

The difference between a good commercial collection agency and a mediocre one becomes crystal clear at this stage. A mediocre agency will have no attorney relationships and can't help you with litigation. A good agency has pre-existing relationships with experienced collection attorneys and can move quickly to file suit if that's the direction you choose.

Before you hire an agency, ask: 'If litigation becomes necessary, how will you handle it? Do you have attorneys? What are the typical costs? What should I expect in terms of timeline and outcomes?' Their answer matters.

The Complete Process: From Decision to Collection

Timeline and What to Expect

Red Flags to Avoid

Don't work with a collection agency if:

They can't explain their process or seem evasive about their approach
They only quote fees but won't discuss recovery rates
They have no attorney relationships and can't discuss litigation options
They're not accredited in your state
They have a pattern of unresolved complaints on the BBB
They guarantee results (no reputable agency can guarantee collection)

Common Mistakes to Avoid

Mistake 1: Choosing an Agency Based on Fee Alone

This is the biggest mistake. A 15% fee sounds great until you realize the agency only recovers 30% of accounts. A 35% fee at 80% recovery rate will put significantly more money in your pocket. Always ask about recovery rates before asking about fees.

Mistake 2: Not Documenting Your Pre-Collection Efforts

When you hand the account to an agency, they need to know what you've already tried. Document every contact attempt, every phone call, every email you've sent. This tells the agency what's already been done and prevents duplication of effort.

Mistake 3: Using a Consumer Collection Agency for Commercial Debt

This is a killer mistake. Consumer agencies operate under different rules, have different strategies, and often lack business credit reporting capabilities. Make absolutely sure you're using a commercial/B2B agency.

Mistake 4: Contacting the Debtor After Placing the Account with an Agency

Once you've placed the account with a collection agency, step back. Let them work. If you keep calling the debtor, you undermine the agency's leverage and send mixed signals about how serious you are. The agency should be the only point of contact.

Mistake 5: Accepting Payment Directly from the Debtor Without Telling the Agency

If the debtor suddenly calls you wanting to pay after the agency has taken the account, don't accept the payment directly. Contact the agency first. They may have negotiated a settlement or a payment arrangement. Taking payment outside of that can cause problems.

Mistake 6: Waiting Too Long Before Escalating

This is the silent killer of collection efforts. Many businesses wait 90-120 days before sending an account to collections, thinking they'll resolve it on their own. By that point, recovery odds have dropped dramatically. The sweet spot is 30-60 days. After that, your chances decline significantly with each passing week.

Mistake 7: Not Having Clear Credit Policies Upfront

This isn't a mistake about collections—it's a mistake that leads to collections. If you're not clear about payment terms, due dates, and consequences upfront, you create ambiguity. Be clear in your contracts and invoices about what's expected and what happens if payment is late.

Mistake 8: Failing to Investigate the Debtor's Ability to Pay

Before you send an account to collections, ask yourself: does this company appear to have any ability to pay? Are they still operating? Do they have assets? A good collection agency will investigate this, but you should too. If the debtor is clearly insolvent, collection efforts may be futile.

Key Takeaways

Know WHEN to send to collections: typically between 30-60 days overdue with failed internal collection efforts.
Identify whether you're dealing with a commercial or consumer debt. This determines everything.
Gather documentation before contacting an agency. The stronger your file, the better your recovery.
Understand collection agency fees: contingency (most common), flat fee, or hybrid models. Compare by recovery rate, not fee percentage.
Choose an agency based on recovery rates and investigative approach, not just low fees.
Verify reputation through Google reviews and the Better Business Bureau.
Understand what litigation and post-judgment options are available if traditional collection fails.
Ask potential agencies about their attorney relationships and litigation coordination.
Avoid common mistakes: don't focus only on fees, maintain clear documentation, use the right agency type, and step back once you've engaged them.
Remember: a good commercial collection agency does more than send letters and make calls—they investigate, negotiate, and create a path to recovery.

Final Thoughts

Sending someone to collections is never fun. But it's sometimes necessary. The difference between a successful collection and a lost debt often comes down to one decision: choosing the right agency partner. Take the time to interview multiple agencies, ask the right questions, and focus on recovery rates rather than low fees. Your bottom line will thank you.

See If Your Account Qualifies

FREQUENTLY ASKED QUESTION'S

Upon receiving your claim, your account will be assigned to a certified commercial collector and a credit-trained private investigator. The debtor will be notified of the ongoing asset and liability investigation and given the opportunity to pay. If the debtor refuses, the investigation will proceed, including face-to-face meetings and contacting vendors, suppliers, and financial institutions to determine suit worthiness. If the debtor still refuses to pay, we may seek your authorization to begin litigation. For more information on the asset and liability investigation, click here.

The answer largely depends on how long you wait to place your customer for collections. Debt is not like wine; it does not get better over time. We collect some debts in as little as the first couple of hours or days of placement, while others may take several years. We do not quit until the company pays their balance, goes out of business, files chapter 7 bankruptcy or a judgment is obtained and executed. The average time usually takes between 30 and 45 days.

Collection activity typically begins within one hour of receiving your placement. You can expect that your debtor will reach out to you to try to stop collections efforts. If this happens, you must refer them back to our office. Your dedicated account manager will be reach out to you within 24 hours and keep you updated on your accounts from the beginning of the collection process to the end. Place an account by clicking here.