The real cost of using a collection agency
Collection agencies charge 25-40% of the amount collected — sometimes more for older debt. On a $5,000 overdue invoice, that's $1,250-$2,000 that you pay for the privilege of getting your own money back. Worse, agencies often damage customer relationships permanently. Their methods are designed for one-time debt collection, not for preserving a customer who might come back for three more jobs.
For home services businesses, sending an invoice to a collection agency should be the absolute last resort — reserved for customers who have explicitly refused to pay after multiple professional attempts, not for invoices that are just 30-60 days old.
What works before you need a collection agency
The vast majority of overdue invoices from home services customers (85-90%) resolve before needing an agency — if you follow up persistently and professionally. The key word is persistently. Most businesses give up after one or two attempts. Three to five professional contacts, spread over 30-45 days, with escalating urgency, resolves almost everything that can be resolved.
Automated tools make this persistence frictionless. With Surety, every invoice automatically gets 2-3 SMS reminders and an AI voice call from Remi. No one on your team has to make uncomfortable calls or track follow-up dates manually. The system handles the cadence; you handle exceptions.
The success-fee model: pay nothing if nothing is collected
One of the major advantages of modern AI collection tools over traditional agencies is the pricing model. Surety charges 12% of what Remi actually collects — if the invoice resolves without any Surety contact (the customer just paid on their own), there's no fee. Traditional agencies charge their percentage regardless of whether you needed them or not.
This aligns incentives in a way that collection agencies never have. The tool has to perform to get paid. And 12% is roughly half what most agencies charge, before factoring in the relationship damage that agencies cause.
When a collection agency actually makes sense
There are cases where a collection agency is the right call: invoices over 180 days old where the customer has stopped responding entirely, customers who have explicitly disputed the charge and won't engage, or situations where you've already decided the relationship is over regardless.
For everything else — invoices under 90 days, customers who are just disorganized, disputes that haven't been formalized — an AI-powered reminder tool will resolve it faster, cheaper, and without burning the bridge. Start there.