Debt Collection Agency or Software – Which One should be Your Pick?

When it comes to a debt collection agency, many entrepreneurs opt for debt collection software as they think that it would help them save in the long run. Whereas others simply rely on debt collection agencies as they believe that nothing can beat the expertise of trained and experienced professionals. However, to make your pick easier before installing debt collection software, I have jotted down a few points below.


The first thing that you should know is that software is just a tool, and it is only useful when it is used by a debt collector. Giving a layman a tool that he does not know how to use is a huge mistake. A debt collection agency would appoint collectors who would approach all your debtors individually, follow up with them, and take all the necessary measures needed to get back the dues. Also, your faulty customers would take the collectors much more seriously and even studies have shown that they tend to pay earlier when approached by such debt collection agencies or collectors.


Secondly, documentation is an important factor. A commercial collection agency would keep track of all the collection efforts that have been taken including the smallest of details. You might find this to be a very meagre point but trust me, it plays a huge role especially when the case gets serious, and you have to provide proof in the court. A collection agency would typically record all the emails, telephone calls, in-person collection attempts, comments made by the debtor during any kind of communication, etc. Well needless to say that software won’t be able to do it. Without the efforts of an experienced collector, it would be difficult for you to solidify your case in court.


We all know how precious time is. It is true that a collection software would assist you in the collection process by helping you with the tracking of debts, but will it help you save your time and devote it to some other important work? Unfortunately, the answer to this is a no! With a collection software, you need to monitor the activities and devote a lot of time in order to learn it properly as well. You need to input the information manually as well. However, with a company providing collection agency services, things are different. They would take the entire responsibility on their shoulders and even not accept the payments until and unless the accounts are recovered.

Apart from the above mentioned points , these are some few things you can take under consideration: 

  • The type and size of your business and industry
  • The number and value of your accounts receivable
  • The age and status of your debts
  • The preferences and behavior of your customers
  • The budget and resources you have available

Before installing any debt collection software, to compare,  you need to do some research and analysis. You can start by asking yourself some questions, such as:

•  How much money do you need to recover and how soon?

•  How many customers do you need to contact and how often?

•  Through software, how do you want to communicate with your customers and what tone do you want to use?

•  How much control do you want to have over the debt collection process and the outcome?

•  How much are you agreeing to spend on your debt collection software and what is your expected return on investment?

So, now that you have went through this article, which one do you think should be your choice? Check out the pros and cons below:

Some benefits of using debt collection software which you use at your commercial collection agency:

  • In general Debt Collection Software can be cost-effective and scalable for large volumes of debt accounts.
  • Debt Collection Software can be fast and efficient by sending automated and personalized messages to your debtors.


  • This software can be ineffective and impersonal for some customers who prefer human contact or have special circumstances.
  • Sometimes this software struggles with technical glitches and security issues of the systems.
  • Sometimes, Debt collection software can be complicated and time-consuming to set up and maintain on a day to day basis.

The Both options have their pros and cons. And you need to weigh them carefully based on your specific needs and goals before installing debt collection software. If you follow this, majorly you can improve your cash flow, profitability, and business reputation, increase debt collection process and can eventually grow your business.

Well, if you ask me, then I would of course ask you to opt for a debt collection agency. It is always smarter to rely on humans rather than a software. However, the call is yours. Decide which one will be the right fit for your business and act accordingly.

In my opinion, debt collection agencies are the best option for any debt or credit collection business. Humans can handle complex situations better than financial software. At the end of the day, you need to choose what works for you and what not. By comparing the pros and cons you can only come to a final decision to go for debt collection software or not.

To know more about collection procedures or professional debt collection agencies, kindly wait for my next article.

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