How to Get Accounts for a Collection Agency

If you own a collection agency and you are just starting out, you will need a strategy for getting accounts. A lot of companies and organizations may already have a relationship with a collection agency, so you will need a plan designed to take a portion of the market share. You must be a good salesperson and when you finally get accounts you must deliver. You may have to initially offer to collect accounts at a different price structure than the market.

Make a list of companies that need the service of a collection agency. Your list might include banks, credit unions, companies, dentist offices, doctor offices and credit card companies. Prioritize your list based on expectancy. The idea is to start with a company you think is most likely going to consider your services first. If you already know someone working for one of these companies you may want to start there. Perhaps they can recommend you.

Offer to do second placements. When a company turns its bad debt over to a collection agency there are several possible outcomes. The first possible outcome is the debt will be paid in full or a portion of the balance could be settled in full. Another possible outcome is the debtor will now start making payments. Even though there are many more outcomes, eventually the collection agency will work the account to a conclusion. If they were not able to contact the debtor and extract payments they will probably close the account. This means they have exhausted their resources and there is no chance of collecting the balance. These are the accounts you want to take on; these are called second placements. They are much more difficult to collect because they have already been worked but if you can collect anything on these accounts a bank or other client may be inclined to turn over their first placements to you.

Speak to the vice president of a major company or bank. If you speak to someone who is in charge and establish a rapport with them, you may be able to convince them to let you collect on their accounts for one branch or store or unit as a pilot program. If you are highly successful, they may let you take on the collection activity for all of their branches.

Demonstrate to prospective clients why your company is the best at handling collections. You must have and do everything better than your competitor. If you have state-of-the-art equipment, a trained and knowledgeable staff, and a staff of collection attorneys on hand, these are some things a client looks for. If you are a startup company, you may not have all of these advantages. In a situation such as this you have to convince the client that you are passionate about what you do and you can get the job done. The bottom line is the client wants results. If you can get results, they don’t really care if you operate out of a shoebox.

Adjust your fees. You may have to offer to perform collection activities for less than the standard. This will get you in the door at least. Most collection agencies charge clients 25 percent of what they collect. The fee can also move to 33 percent to 50 percent based on the level of collections. If you can offer your services at a fee less than 25 percent you could land an account with a client looking to save money. Later on you can always boost your fee based on market conditions and competition.


  • Second placement accounts may not always be available. Some companies sell their bad debt to collection agencies, which means the original company no longer has control over the account.