When do you hire a collection agency?

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When do you hire a collection agency?

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You delivered. You've invoiced. The payment period has expired. And your customer isn't responding.

It's a situation that feels familiar to most entrepreneurs. According to research by Exact, 90% of Dutch SMEs regularly have problems due to late payments — and almost a quarter misses out on at least €20,000 annually in irrecoverable invoices.

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The question that follows is always the same: am I using a collection agency now?

The honest answer: sometimes yes, sometimes no. And the moment you make that decision matters more than you know.

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What does a debt collection agency actually do?

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A collection agency collects unpaid claims from debtors on your behalf. They send reminders, carry out contact moments and — if there really is no other option — they take legal action.

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Sounds easy. But here's a fundamental problem with the traditional debt collection industry: most agencies earn more the longer a case runs and escalates higher. More debt collection cases mean more turnover. That's a perverse incentive — and it's at odds with your interest as an entrepreneur.

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At NIKKI, it works the other way around. We earn more when there are fewer debt collection cases. You can read more about this approach on our page about social debtor management.

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When do you hire a collection agency?

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You use a collection agency when a customer fails to pay after at least two written reminders, personal contact has failed, and the payment period has expired by more than 14 days.

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In practice, the timeline looks like this:

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Day 0 Invoice sent with a clear payment period (14 or 30 days)
Day -3 (optional) Proactive friendly reminder before due date
Day +7 First payment reminder — friendly tone
Day +14 Second reminder — formal summons, WIK costs announcement
Day +30 Transfer to collection partner in case of no response

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The sooner you intervene, the greater the chance of success. Claims older than 90 days become significantly more difficult to collect — the chance of full payment decreases sharply as time passes.

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When is the best time to wait a minute?

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Not every late payment requires a collection agency. Sometimes there is a simpler explanation.

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Wait a minute if:

• One dispute is about the invoice itself — wrong amount, undelivered product, incomplete service
• Your customer has payment issues reported and wants to make an arrangement
• The customer relationship is strategically valuable — a tough approach may cost you more than the invoice itself is worth
• The invoice net has expired and you haven't tried contact

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The difference between someone who does not want pay and someone who can't payment is crucial. These two situations require a completely different approach.

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What does it cost you to wait?

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Out of the Intrum European Payment Report 2024 it appears that Dutch companies average 11.43% of their annual turnover received as late payments. Moreover, companies spend on average 73 working days per year chasing arrears.

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Every day that an invoice is outstanding is missed liquidity. Not a hypothetical problem — 82% of companies that go bankrupt still have orders in their portfolios at the time of bankruptcy. The problem is not turnover. It's cash flow.

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Social debt collection: a better approach

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Traditional debt collection equals pressure, threats and damaged relationships. But that is not the only way.

Social debt collection assumes understanding of the debtor's situation. A respectful, empathetic approach leads to higher willingness to pay — and that has now been scientifically substantiated. Research by SchuldenlabNL (2024) shows that every year, social debt collection has a social added value of €260 to €390 million generates by preventing escalation into problematic debts.

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Since March 25, 2025 is social debt collection officially the legal norm for creditors in the Netherlands, established by the NVVK.

NIKKI Business works entirely according to this principle. Want to read more? See our page about Social Debt Collection Agreement Framework.

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FAQs

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Can I collect my own money without an agency?
Yes. You can send reminders yourself and charge statutory collection costs (WIK) after a formal request with a 14-day payment period. For legal action, you need a bailiff or collection agency.

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How many reminders do I need to send before I can charge collection costs?
At least one written reminder with a payment period of at least 14 days — that is the legal requirement in accordance with the Extrajudicial Collection Costs Standards Act (WIK).

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Can I use a collection agency for small amounts?
That's possible, but weigh the costs. The legal minimum of collection costs is €40. For claims under €267, adjusted rules apply as of 2024 (max. €140 per six months).

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Does a debt collection agency harm my customer relationship?
A traditional agency works with pressure — that hurts relationships. An agency that works according to the Social Debt Collection Agreement Framework keeps the tone respectful and the relationship intact where possible.

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About the author: This article was written by the NIKKI Business team. NIKKI assists more than 400 organizations in social debt management and is affiliated with the Social Debt Collection Agreement Framework.

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Do you want to know how NIKKI Business takes over your debtor management without damaging customer relationships? Schedule a free demo.

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Sources: Exact SME Barometer 2025 · Intrum European Payment Report 2024 · SchuldenlabNL — Social Debt Collection 2024 · NVVK — Social debt collection is the norm · National government - High collection costs