Constantly struggling with late invoices and no-pay accounts? Rather than pouring resources into endless debt collection projects, experts say business owners should outsource the job to a debt recovery agency.
Running a business is challenging, especially for startups. A handful of late payments can cause significant setbacks, and that is before considering vendors and consumers who never pay at all. Constantly chasing after unpaid accounts consumes valuable time and effort that could otherwise be directed toward core operations. For this reason, experts suggest that, rather than investing hard-earned money into an uphill battle, businesses may benefit more from hiring a third-party debt collection agency.
Cash flow is essential for organizations of any size, yet many—particularly smaller businesses—struggle with unpaid accounts. A 2025 survey revealed that 56% of small businesses were owed money from unpaid invoices, with the average amount totaling $17,500 per business.
According to experts, business owners can mitigate potential cash flow challenges by employing a third-party collections agency to recover owed funds. Such agencies are familiar with financial regulations and ensure compliance with the law, protecting businesses from legal complications while typically achieving higher collection rates.
“Companies often think they should bring debt collection efforts in-house to lower costs and reduce legal risks. Many times, they discover that the time and money needed to train, equip, and support a project like this doesn’t yield the results they had hoped for, resulting in precious resources being wasted,” explained a spokesperson for Southwest Recovery Services (SWRS), a nationally recognized debt collection agency.
Full-service debt collection agencies such as SWRS provide a comprehensive suite of consumer and commercial collection services designed to help clients avoid or address cash flow issues caused by unpaid accounts. These agencies often offer debt recovery programs that maximize recovery through pre-legal collection strategies, account assessment, asset location and recovery, and legal servicing. When necessary, they also assist clients with pursuing legal action and navigating court processes.
In addition, some agencies allow businesses to outsource portions of their revenue cycle management, helping them optimize revenue generation, minimize claim denials, and accelerate collections.
When a business engages a debt collection agency, the agency begins by verifying contact information using specialized resources accessible only to authorized debt collectors. The agency then sends a demand letter, followed by phone calls and emails. Agents generally prioritize respectful communication over aggressive tactics, seeking to understand the reasons behind late payments—a strategy that often yields more positive results.
Once these preliminary steps are complete, the agency develops a collection strategy tailored to the client’s business, ensuring that funds are redirected where they belong: into the company’s accounts.
Agencies like SWRS focus on the work they do best—collections—so that their clients can concentrate on what they do best: running their businesses. By leaving debt recovery to the professionals, companies can preserve valuable resources and safeguard long-term growth.
