When you refer an unpaid invoice to a debt collection agency, the process generally begins with reviewing the account information and supporting documents. The agency then determines the appropriate recovery approach, contacts the debtor where suitable, manages payment discussions and advises on further options if the account remains unresolved. The exact process depends on the debt, available evidence and the debtor’s response.
You have sent payment reminders, made telephone calls and followed up on promises to pay. The invoice is still outstanding, and you are considering using a debt collection agency.
But what happens after you submit the account?
Many business owners delay seeking professional assistance because they are unsure what the agency will do, what information is required or whether they will lose control of the process.
Understanding the steps can help you decide whether professional debt recovery is appropriate for your business.
Step 1: Your Outstanding Account Is Reviewed
The process starts with reviewing the information you provide.
A debt collection agency needs to understand who owes the money, why it is owed, how much remains outstanding and what has already happened.
The initial review may include:
- The original invoice
- Payment terms or contract
- Outstanding balance
- Debtor’s contact details
- Evidence of goods supplied or services completed
- Previous payment reminders
- Records of any payment arrangements
- Information about any dispute
If important information is missing, you may be asked to provide further documents.
Why this matters: A clear account history helps the agency understand the debt and determine an appropriate recovery strategy.
Step 2: A Recovery Approach Is Established
Not every overdue invoice requires the same approach.
A straightforward unpaid commercial invoice may be handled differently from an old account, a disputed invoice or a debt where the debtor cannot be contacted.
The recovery approach may depend on:
- The amount outstanding
- The age of the debt
- The agreed payment terms
- The available documentation
- Previous communication
- Whether the debtor disputes the amount
- The debtor’s response to contact attempts
Before proceeding, make sure you understand the applicable fees, commission arrangements and service terms.
National Collections offers different debt recovery options and promotes a No Collection, No Commission model. Ask the team to explain the specific terms that apply to your account.
Step 3: The Debtor Is Contacted
Once the account has been accepted and the recovery process begins, the agency can contact the debtor using appropriate methods.
Depending on the circumstances, this may involve formal correspondence, telephone communication and follow-up.
The purpose is to communicate the outstanding account, seek a response and establish whether payment can be obtained.
A debtor may pay the amount owing, request clarification, propose a payment arrangement or raise a dispute.
The next step depends on that response.
Step 4: Payment Discussions Are Managed
Some debtors respond to formal collection contact even after ignoring the original creditor’s reminders.
Others may need to clarify the balance or discuss a payment arrangement.
Where appropriate, the agency may manage discussions about payment dates, instalments or settlement proposals.
Any proposed arrangement should be assessed against your instructions and the circumstances of the account.
A payment promise is not the same as money received. It is important to keep records of arrangements and monitor whether agreed payments are made.
Step 5: You Receive Updates About the Account
When you refer an account, you should understand how communication and reporting will work.
Ask your collection agency:
- Who will manage my account?
- How will I receive updates?
- What happens if the debtor contacts me directly?
- How are payments recorded?
- When will the account be reviewed for further action?
- Who approves a proposed settlement or payment arrangement?
National Collections describes providing account management and updates to clients. Its process also advises clients to inform their account manager if a debtor contacts them or pays them directly.
Once an account is referred, follow the agency’s instructions about further communication. This helps avoid duplicated contact or conflicting payment information.
Step 6: What Happens If the Debtor Still Does Not Pay?
Not every account is resolved through initial contact.
If the debtor does not respond or the matter remains unresolved, further options may need to be considered.
Depending on the circumstances, these may include additional contact, appropriate tracing enquiries or a discussion about legal recovery options.
Legal action is not automatic. It involves separate considerations, potential costs and risks. The appropriate course should be discussed with the agency and, where necessary, a qualified legal professional.
The important point is to understand which options are available before committing to further expenditure.
How Long Does the Debt Collection Process Take?
There is no guaranteed timeframe for recovering an unpaid invoice.
Some accounts may be resolved relatively quickly, while others take longer because the debtor is unresponsive, disputes the invoice or cannot pay immediately.
The process can also be affected by the age of the debt, the quality of the documentation and whether further action is required.
When referring an account, ask the agency how it will report progress and when it will review the next steps.
Be cautious of any promise that every debt will be recovered within a fixed number of days.
What Does No Collection, No Commission Mean?
A No Collection, No Commission arrangement generally means the agency’s collection commission is payable when money is successfully recovered, subject to the agreed terms.
It is important to confirm exactly what the agreement covers.
Ask whether any separate charges, legal expenses, tracing costs or other fees could apply. Do not assume that every possible cost is covered simply because the service is advertised as No Collection, No Commission.
National Collections promotes this model for its debt recovery services.
What Should You Do If the Debtor Pays You Directly?
If a debtor makes a payment directly to your business after the account has been referred, notify your account manager promptly.
Provide the payment date and amount, and confirm whether any balance remains outstanding.
This is important because the agency needs accurate account information to avoid pursuing amounts that have already been paid.
Follow the instructions provided under your collection agreement.
How to Prepare Before Referring an Unpaid Invoice
Before contacting a debt collection agency, prepare a simple account file.
| Document or detail | What to include |
| Invoice | Invoice number, date and original amount |
| Balance | Amount currently outstanding |
| Agreement | Contract or agreed terms of trade |
| Supporting evidence | Proof of delivery or completed work |
| Debtor information | Correct business name and known contact details |
| Payment history | Payments, credits or adjustments |
| Correspondence | Reminders and responses |
| Dispute information | Any issue raised by the debtor |
You do not need to write a lengthy report. Clear, accurate records are more useful than a long narrative without supporting documents.
Is a Debt Collection Agency Right for Your Business?
Professional debt recovery may be worth considering if:
- The payment due date has passed
- Your reminders have not worked
- The debtor has stopped responding
- Payment promises have repeatedly failed
- Your staff are spending too much time chasing invoices
- You want to understand your options before taking further action
You can ask for an assessment even if you are unsure whether the account is suitable for collection.
Refer Your Unpaid Invoice to National Collections
National Collections provides debt recovery services for businesses in Perth and throughout Western Australia.
If you have an overdue commercial invoice, the team can discuss the account, explain the available service options and outline the information required to proceed.
Before referring your debt, ask about the commission structure, any additional charges and how progress will be communicated.
Call National Collections on (08) 9202 1000 or complete the online enquiry form to discuss your unpaid invoice.
Frequently Asked Questions
What information does a debt collection agency need?
Usually, the agency needs the unpaid invoice, debtor details, payment terms, supporting evidence and records of previous communication. Additional documents may be needed depending on the account.
Do I still need to contact the debtor after referring the debt?
Follow the instructions in your collection agreement. National Collections advises clients to avoid contacting the debtor directly once an account is assigned and to notify their account manager if the debtor contacts them or pays them directly.
Can I decide whether to take legal action?
Further legal action should be discussed with the collection agency and, where appropriate, a qualified legal professional. Costs, evidence, prospects of recovery and other circumstances should be considered before proceeding.
Does No Collection, No Commission mean there are no costs at all?
Not necessarily. The arrangement’s exact terms matter. Ask about commission, legal costs, tracing expenses and any other charges before signing an agreement.
What if the debtor disputes my invoice?
Provide the relevant contract, invoice, delivery records and correspondence. A genuine dispute should be assessed before deciding which recovery steps are appropriate.
Can I refer an old unpaid invoice?
An older invoice may still have recovery options, but its age, history and applicable legal requirements need to be assessed. Do not assume it is automatically recoverable or automatically too old to pursue.
Ready to Discuss Your Unpaid Account?
You do not have to continue chasing the same overdue invoice without knowing what to do next.
If your business has an unpaid commercial account, National Collections can discuss your situation and explain the available recovery options.
Call (08) 9202 1000 or submit an online enquiry to get started.