How Much Does it Cost to Send Someone to Collections: Agency Fees Explained
How Much Does it Cost to Send Someone to Collections: Agency Fees Explained
Key Takeaways
- Sending a commercial account to a contingency agency costs nothing upfront. At Southwest Recovery Services the contingency fee can range between 10% and 50%, depending on the age of the receivable and the amount of the receivable. If nothing is recovered, there is no fee.
- Two things set the rate: how old the receivable is and how large it is. Industry data puts the probability of collection at 88.7% one month past due and 8.9% at 24 months.
- On a $10,000 recovery, a 10% fee is $1,000 and a 50% fee is $5,000. Compare agencies on what you keep, not on the percentage alone.
- On contingency the fee applies only to recovered money. Other agencies charge flat, setup or monthly fees, and litigation is a separate decision with separate costs.
- Southwest Recovery Services brings 22+ years of B2B commercial collection experience, contingency-only pricing and no upfront fees. Request a quote for your receivables.
In this guide
- How much it costs to send someone to collections
- What percentage collection agencies take
- Agency percentage vs. debt buyer
- What sets your rate: age and amount
- How much a collection agency charges, in dollars
- Who pays collection agency fees
- Contingency vs. flat-fee pricing
- Why the lowest rate is not always the best deal
- What else debt collection agencies charge
- The average collection rate for a collection agency
- Is paying a collection agency worth it?
- How to get a quote
- Frequently asked questions
How Much Does It Cost to Send Someone to Collections?
How much does it cost to send someone to collections? For a business collecting unpaid B2B invoices, a contingency agency charges nothing upfront and takes a percentage of what it recovers. At Southwest Recovery Services, the contingency fee can range between 10% and 50%, depending on the age of the receivable and the amount of the receivable. If nothing is recovered, there is no fee.
So what do collection agencies charge? A percentage of what they recover. Collection agency rates, the collection agency fee and the overall collection agency cost all come down to the same two inputs: the age and the amount of the receivable.
Other agencies price differently: some charge flat, setup or monthly fees whether or not the account pays, so ask about every charge and get the answer in writing before you place an account.
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What Percentage Do Collection Agencies Take on Commercial Accounts?
Most commercial agencies work on contingency. You pay a percentage of the money collected, and if the agency collects nothing, you owe no fee. That keeps the agency’s incentive aligned with yours: it is paid only when you are.
So what percentage do collection agencies take at SWRS? It can range between 10% and 50%. Two things decide where an account falls in that range: the age of the receivable and the amount of the receivable. A $40,000 invoice that is 45 days past due and a $600 invoice that is 14 months past due are different jobs, and the pricing reflects that.
- Pricing model: contingency. No recovery, no fee.
- Range at SWRS: 10% to 50% of the amount recovered.
- What sets the rate: the age of the receivable and the amount of the receivable.
The short answer to “what percentage do collection agencies take”: contingency fees at SWRS can range between 10% and 50% of what is recovered, depending on the age of the receivable and the amount of the receivable. No recovery, no fee.
Agency Percentage vs. Debt Buyer: Which Are You Asking About?
Searches for “what percentage do collection agencies take” mix two different businesses. A third-party collection agency works your accounts on contingency and keeps a percentage of what it collects.
A debt buyer purchases accounts at a discount and keeps everything it collects, so there is no fee to you because you have already been paid.
This page is about the first model: what a business pays an agency to recover its own unpaid invoices.
What Sets Your Rate: Age and Amount
The Age of the Receivable
The older a receivable is, the less likely it is to be collected. Commercial Collection Agencies of America data, republished by the Credit Research Foundation, puts the probability of collection like this:
| Age past due | Probability of collection |
|---|---|
| 1 month | 88.7% |
| 3 months | 68.9% |
| 6 months | 51.3% |
| 9 months | 37.5% |
| 12 months | 21.4% |
| 18 months | 15.2% |
| 24 months | 8.9% |
That curve is why age moves the fee. At 30 days the debtor is usually still reachable and the records are fresh. At 18 months the debtor may have moved, closed or stopped answering, and the agency carries more risk and effort for fewer recovered dollars. These are industry benchmarks, not a promise for any single account.
The Amount of the Receivable
The amount of the receivable is the second thing we weigh in a quote, and it is a standard input in collectability scoring alongside how long the account has been delinquent. Collection portfolios are commonly segmented by balance like this:
- Micro: under $200
- Small: $200 to $1,000
- Medium: $1,000 to $5,000
- Large: over $5,000
How Much Does a Collection Agency Charge? What the Percentage Looks Like in Dollars
How much does a collection agency cost, and what percentage do collection agencies take, in dollars? The fee is a percentage of the amount recovered, so the math is simple. This table shows what you keep at three points in the 10% to 50% range on a $10,000 recovery. It is arithmetic on the percentage, not a quote.
| Fee percentage | Fee on $10,000 recovered | You keep |
|---|---|---|
| 10% | $1,000 | $9,000 |
| 25% | $2,500 | $7,500 |
| 50% | $5,000 | $5,000 |
Who Pays Collection Agency Fees?
On a contingency arrangement, you do not pay the agency anything upfront. The agency’s fee is a percentage of what it recovers, and if nothing is recovered there is no fee. How the fee is collected, and what reporting you receive, is set out in the agreement (see the checklist below).
Some agencies instead charge flat, setup or monthly fees that you pay whether or not the account pays. Separately, whether you can pass collection costs on to your customer depends on your contract and on state law, so check your agreement and ask your attorney before you add them to a balance.
Contingency vs. Flat-Fee Pricing
Agencies price collections three ways. Contingency charges a percentage of recovered dollars. Flat-fee pricing charges a set amount per account whether or not it pays. A hybrid pairs an upfront charge with a smaller contingency. SWRS commercial collection is contingency: no recovery, no fee.
Flat fees can make sense for a high volume of very small balances, but they move the risk to you, because you pay whether or not the account pays. Contingency keeps the agency working for the same outcome you want. For the full comparison, read contingency vs. flat fee in debt collection.
Why the Lowest Rate Is Not Always the Best Deal
Compare collection agency fees on what you keep, not on the percentage alone. Here is a hypothetical $10,000 receivable placed with two agencies.
| Comparison | Agency A | Agency B |
|---|---|---|
| Fee percentage | 15% | 25% |
| Share of the balance recovered | 40% ($4,000) | 70% ($7,000) |
| Fee on the recovery | $600 | $1,750 |
| You keep | $3,400 | $5,250 |
So when you ask what percentage do collection agencies take, look at what you keep, not just the rate. The agency with the lower rate leaves you $1,850 less. The numbers are hypothetical and only show the math. Ask any agency for its recovery results on accounts like yours, sorted by age and balance, and for how those results are measured.
What Else Do Debt Collection Agencies Charge? What to Check Before You Sign
A pure contingency agreement has no setup, monthly or per-account fees. Other debt collection agencies may add them, and litigation is a separate decision from the collection fee, so go through the checks below before you sign. Knowing the full debt collection costs up front is how you compare collection agency charges and collections agency fees fairly.
How the Fees Are Set
Collection agency fees should be tied to the age and amount of your receivables and written into the agreement. If the rate can change after placement, ask what triggers the change.
Upfront or Ongoing Charges
Ask about setup, monthly or per-account fees. A pure contingency agreement has none: the agency is paid only from what it recovers.
Litigation
Get in writing who approves a lawsuit and who pays court costs and attorney fees. Litigation is a separate decision from the collection fee.
Remittance and Reporting
Ask how and when collected funds are paid to you and what reporting you receive, so you can see what was collected and what was kept as the fee.
Licensing
Collection licensing varies by state, so confirm the agency can work accounts where your debtors are.
Recall Terms
Know how you can pull accounts back if you need to, and what happens to the fee on accounts that are recalled.
What Is the Average Collection Rate for a Collection Agency?
There is no single average collection rate, because the likelihood of collecting depends mostly on how old the account is. Commercial Collection Agencies of America data, republished by the Credit Research Foundation, puts the probability of collection at 88.7% one month past due and 8.9% at 24 months. The full table is under “The Age of the Receivable” above.
These are industry benchmarks, not a promise for any single account. Ask any agency for its recovery results on accounts like yours, sorted by age and balance, and for how those results are measured. For more benchmarks, see our guide to collection agency average collection rates and industry benchmarks.
Is Paying a Collection Agency Worth It?
An invoice you cannot collect is worth nothing on your books until it is paid. On contingency, the fee applies only to money the agency recovers, so there is no fee on an account that stays unpaid.
To decide, compare what you keep, not the percentage alone (see the example above), and count the staff time spent chasing invoices in-house. A professional third party can also keep the conversation firm and respectful, which helps protect customer relationships you want to keep.
Southwest Recovery Services: Contingency-Only B2B Collections
Based in Addison, Texas and founded in 2004, Southwest Recovery Services collects unpaid B2B invoices on contingency, with 12 offices in eight states and nationwide capabilities. We collect a fee only when we recover money on your account: no recovery, no fee.
To see what your receivables would cost, send us the invoices, the signed agreement or purchase order, the debtor’s legal name and contact details, and the date the balance went past due.
Request a quote or call 866-551-4684. You can also read how we handle commercial collections, see our accounts receivable management services, or use our guide on how to choose a commercial collection agency.
Learn More About Southwest Recovery Services →
Frequently Asked Questions (FAQs)
How much does it cost to send someone to collections?
With a contingency agency there is no upfront cost: the agency is paid a percentage of what it recovers. At Southwest Recovery Services the fee can range between 10% and 50%, depending on the age of the receivable and the amount of the receivable. If nothing is recovered, there is no fee.
What percentage do collection agencies take?
Commercial collection agencies usually charge a contingency percentage of what they recover. At Southwest Recovery Services the fee can range between 10% and 50%, depending on the age of the receivable and the amount of the receivable. If nothing is recovered, there is no fee.
How much does a collection agency charge?
It is a percentage of the money recovered, not a fixed bill. At SWRS that percentage can range between 10% and 50%. On a $10,000 recovery, a 10% fee is $1,000 and a 50% fee is $5,000. If nothing is recovered, the fee is zero.
Who pays collection agency fees?
On contingency, the fee is a percentage of what the agency recovers, and if nothing is recovered there is no fee. Some agencies charge flat, setup or monthly fees that you pay whether or not the account pays. Whether you can pass collection costs on to your customer depends on your contract and state law, so check your agreement and ask your attorney.
What decides a collection agency’s rate?
At SWRS, two things: the age of the receivable and the amount of the receivable. Older receivables have lower odds of collection and take more work per dollar recovered, and the amount of the receivable is the second input to a quote. We quote the rate from the age and amount of your receivables.
Do collection agencies charge upfront fees?
SWRS collects a fee only when it recovers money on your account. Other agencies charge flat, setup or monthly fees, so ask about every charge and get the answer in writing before you sign.
Is a lower percentage always cheaper?
No. What you keep depends on both the fee percentage and how much the agency recovers. On a $10,000 receivable, an agency charging 15% that recovers 40% leaves you $3,400. An agency charging 25% that recovers 70% leaves you $5,250. These figures are hypothetical and show the math only.
What is the average collection rate for a collection agency?
There is no single average, because the odds depend mostly on age. Industry data shows the probability of collection dropping from 88.7% at one month past due to 8.9% at 24 months. Ask any agency for its recovery results on accounts like yours, sorted by age and balance.
Related Reading on Collection Costs
- Contingency vs. flat fee debt collection
- How debt collection agencies work: process and fees explained
- Best collection agency for businesses: how to choose
Methodology and sources: The probability-of-collection table is Commercial Collection Agencies of America data republished by the Credit Research Foundation in “Benchmarking the Collectability of Your Accounts Receivable.” The fee range is the contingency range for SWRS commercial placements.
Dollar examples and the two-agency comparison are arithmetic illustrations, not quotes or results. This guide covers commercial (B2B) accounts; SWRS does not collect consumer debt in Washington or Oregon. General information, not legal or financial advice. Reviewed November 2026.
*Note: Recovery rates mentioned are for general reference only and not guaranteed. Actual results vary by account and industry. Contact Southwest Recovery Services for a customized quote.
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