The state rule, the city rule, and the one that follows your debtor

Sometimes - it depends on your contract and state law. Where your terms and conditions provide for collection costs and interest, and the applicable state permits it, those amounts may be added to the claim. That clause is worth having in your standard terms before you need it; ask your counsel to review it.

Normalize three things: the commission ladder by account age, what happens to the rate after attorney forwarding, and remittance timing. Then verify licensing in your debtors' states and place a test batch rather than the whole ledger. Recovery against the quoted ladder tells you more in one cycle than any sales conversation.

Sooner than most businesses do. Commercial accounts are commonly reported as around 68.9% collectable at three months past due and around 51.3% at six months, with recovery falling sharply after a year - and the commission rises over the same period. Waiting costs twice. A written escalation ladder with a fixed placement date recovers more than case-by-case judgement.

Commercial collection is normally contingency-based - a share of what is actually recovered, commonly 10-40%. Account age drives the rate more than balance size: fresh accounts under 90 days commonly run 10-25%, 90-180 days 15-30%, 180 days to a year 20-35%, and over a year 25-40%. Some agencies also offer fixed-fee early-stage demands at roughly 15-20 dollars per account.

Commercial legal placement commonly starts around a $2,500 balance - below that the cost stack usually consumes the recovery. Litigation also changes the economics: an attorney suit fee sits on top of the agency's contingency, and court costs are separate. Ask for the all-in cost at your typical balance before agreeing to litigation as an escalation.