Collection Cost Calculator

How Debt Collection Costs Actually Work

If you've never worked with a collection agency before, the pricing model might be unfamiliar. Here's the short version: most reputable agencies, including MSB, work on contingency. That means we only get paid when we collect. There's no monthly retainer, no setup fee, and no minimum commitment. If we don't recover anything, you pay nothing.

Contingency rates in the industry typically range from 15% to 50% of the collected amount, depending on the age of the accounts, the balance size, the volume you're placing, and your industry. Fresher accounts with larger balances cost less to collect because the success rate is higher. Old, small-balance accounts are harder to work and carry higher rates. At MSB, we'll quote you a specific rate based on your portfolio — no surprises.

What Recovery Rates to Expect

Recovery rates vary widely based on how old the accounts are when you place them. Here's what we typically see across our client base:

• 0-90 days past due: 35-50% recovery rate. This is where early-out programs shine — patients and customers still remember the service, their contact info is current, and they're more willing to work out a payment plan.
• 90-180 days past due: 20-35% recovery rate. Accounts start getting harder here. Some contact info goes stale, and the debtor has had time to deprioritize the balance.
• 180-365 days past due: 10-20% recovery rate. These are tougher accounts, but there's still real money to recover — especially on larger balances.
• Over 365 days past due: 5-12% recovery rate. Older accounts are the hardest to collect, but on a large enough portfolio, even a 7% recovery can represent significant revenue.

The takeaway: the sooner you place accounts, the more you'll recover. Every month an account sits on your AR aging report is money walking out the door.

The ROI of Outsourcing Collections

The real question isn't "what does a collection agency cost?" — it's "what does it cost to not use one?" When your staff spends time chasing old accounts, they're not working on current patients, customers, or revenue-generating activities. Internal collection efforts on aged accounts typically recover 5-15%, while a professional agency with skip-tracing tools, multi-channel outreach, and trained collectors will recover 2-3x that amount. On a contingency basis, the math almost always works in your favor.

Use the calculator above to see what the numbers look like for your specific situation, then reach out for a free custom analysis based on your actual portfolio data.