In-House Collections versus Using a Third Party Collections Agency

Most businesses have debts that need to be collected, but not every business has the best debt collection strategy. One of the key considerations, is whether to collect debts using an in-house team or whether to outsource collections to an external collections agency. If an external agency is to be used when should the debts be handed over to them?

The Difference Between In-house Collections and Collections Agencies

When your business has an in-house collections strategy, it means that the process of managing debt collections is typically performed by your business’s own staff, usually in a dedicated collections department.

When your business makes use of an external, third-party collections agency it involves hiring an external firm to handle debt collection on behalf of the business. The business pays these agencies a fee for their services, depending on the SLA.

The Benefits of Having an In-house Collections Strategy

In-house collections can often be more efficient because:

  • The in-house team will be able to react speedier to debtor behavior, be that queries or failure to make payment.
  • The in-house department’s primary role is collecting the business’s debt, they have greater focus than an external agency who are collecting for multiple businesses.
  • An internal collection team will usually have a closer connection to the services or products offered by the business, which means that it is better equipped to deal with the debtors and collect the money more efficiently. The in-house team is familiar with the customers and their payment history and as a result customer satisfaction is enhanced.
  • A well-run in-house team will typically cost less than using an external company who has a profit motive.

Using software, like DebtcolPro, can revolutionise your in-house collections strategy ensuring that your dedicated collections team operates effectively and efficiency improving the quantum and speed of your collections at a more effective cost compared to using external companies.

DebtcoPro is designed with in-house teams in mind and is quick and easy to implement.

The collection process can follow 6 easy steps as demonstrated in this short video

Ultimately, the decision to use in-house collections or a third-party collections agency will depend on the specific needs and resources of the business. Some businesses may prefer to keep collections in-house to maintain control and save costs, while others may benefit from the expertise of a third-party collections agency.

Interested to find out more? Reach out to one of our experts on +27 11 719 2000, mail us on or simply fill out the form below.