When to hire a B2B debt collection agency, and what to ask before you do

Five signs an account belongs with an agency

1. Promises are being broken. A second missed promise date is a pattern; a third means the customer has learned nothing follows.
2. The tone has stopped mattering. Reminders escalate in wording and nothing changes in behaviour.
3. A dispute is a wall. A small issue is holding the whole balance and nobody on either side is resolving it.
4. The customer has gone quiet. Calls ring out, emails bounce, the contact has left.
5. The invoice is ageing toward the limitation period. Documents go missing, staff move on, and the law's clock keeps running.

Appoint before the account is a year old. The cost of delay is not the fee; it is the recoverability.

Seven questions to ask any debt collection agency in India before you appoint it

1. Do you validate the debtor before pursuing? An agency that spends six months pursuing a company that has shut down is charging you to learn something it could have checked in a day.
2. What is your debtor communication standard, in writing? Your name is on every conversation. Kenstone Capital's is public: the debtor communication charter.
3. What do you record? Every call, promise, visit and dispute should be on an account record you can see — because that record becomes the file if the matter escalates.
4. Who owns my accounts? A named collector with a clear focus, not a queue.
5. Can you go to the debtor? Skip tracing for the quiet ones; field collection where presence matters.
6. What happens if recovery fails? A case-by-case legal recommendation with route, cost and likely outcome — never an automatic filing, never a threat you have not approved.
7. What is your fee model, and what does it buy? See below.

What debt collection services cost: the fee models, honestly

Contingency ("no recovery, no fee"). The agency earns a percentage of what it collects. It sounds risk-free and it aligns the agency with the easy accounts — it will work your collectable debtors hard and park the difficult ones, because effort on a hard case is unpaid. Retainer. A fixed fee for a defined scope; aligns effort with your whole book, including the hard cases, and is right for portfolios and programmes. Hybrid. A modest fixed component plus a success element; the most common structure for serious recovery work. Ask what the fee covers when the case escalates to legal — court fees, advocate fees and the agency's own time are three different lines.

Kenstone Capital's model, for the record: a seat-based fee for the DSO Reduction Programme, a success fee for recovery, and case-by-case pricing for enforcement with the advocate's fee and court fees stated separately.

The mistakes that lose recoveries

• Waiting until the invoice is two years old.
• Appointing on price alone, and discovering the agency's methods when a debtor complains.
• Handing over the balance but not the documents — invoices, POs, delivery proof, dispute correspondence.
• Continuing to supply on credit while the agency pursues the balance.
• Threatening legal action in-house that the agency then has to make credible.

Our B2B debt collection agency page sets out the recovery process, fee model and documents needed before you appoint us.

Sources and regulation

Thresholds, limitation periods and procedures change. This guide describes the position as generally understood at the time of writing and is not legal advice; confirm the current rule before acting.