The real economics of collection agencies
Most collection agencies charge on a contingency basis: 25-35% for accounts under 1 year old, 40-50% for accounts over 1 year. If you have $10,000 in overdue invoices and send them to an agency, you'll recover $5,000-$7,500 and the agency keeps the rest. For invoices that are only 30-60 days old, this is an extremely expensive outcome for something your own systems should be able to handle.
Beyond the fee, agencies have reputational costs. Customers who receive a collection agency call often feel ambushed and disrespected — and they associate that feeling with your business. Future referrals from that customer evaporate. In home services, where word-of-mouth is the primary growth channel, this is a significant hidden cost.
The real economics of automated AR software
Surety charges 12% of what Remi actually collects. If the customer pays on their own without any Surety contact, there's no fee. This creates a fundamentally different dynamic than a collection agency: you only pay when the tool adds value.
At 12%, an invoice that would otherwise be written off is worth 88 cents on the dollar. A collection agency at 35% gives you 65 cents on the dollar — and only after a more adversarial process that may have already damaged the relationship. For invoices under 90 days old, automated AR software is almost always the better economic choice.
The relationship preservation factor
The most undervalued comparison point is relationship preservation. A customer who receives an AI voice call from Remi — professional, brief, solution-focused — is still your customer after they pay. A customer who gets handed to a collection agency often isn't.
In home services, the lifetime value of a retained customer is substantial. A residential HVAC customer who stays with you averages 1-2 service calls per year and will eventually need a replacement system ($4,000-$15,000). If your collections process ends the relationship, you haven't recovered the invoice — you've recovered the invoice while giving up the future revenue.
When a collection agency is actually the right call
The right time to use a collection agency is after you've exhausted systematic professional follow-up — typically for invoices over 120 days old where all contact attempts have failed. At that point, the invoice is already impaired and the customer relationship is likely over regardless.
The mistake is using agencies prematurely — sending 45-day invoices to collections because manual follow-up is too time-consuming. That's the exact use case automated AR tools were built to solve. Use the tool first, the agency as a last resort.