What balance is “too small” to send to collections?

We often get asked what the smallest balance we’ll accept for collection, or what’s too small for the work.  The answer is a bit more lengthy than you’d think!

First off, what is a “small balance” for one business is huge to another.  Back in the “old days” when I was a young salesman going around town looking for businesses to hire us, I learned quickly that “small” is all relative.  The video store we worked for (yep – THAT long ago!) thought the $25.00 late fees they were turning over to us were medium to large balances.  On the other hand, the HVAC company I called on thought the $5,000 debt they had might not be worth our time.

Secondly, we are not only in the “balance” business, but also in the information business.  Sure, we get a small percentage of each dollar we collect but rarely do consumers have only one account with our office.  So the $25 co-pay at the doctor, or the $15 NSF check at the corner store might not seem like much money, but the information our client might provide with that small account can help us collect several others, often hundreds or thousands of dollars in debts.

And third, the national credit bureaus do not accept collection accounts for under $50.  So if your goal is to make sure the account gets credit-reported, it has to have a principle balance of at least $50.

We typically do not turn away small medical accounts, since they often have helpful information.  So if it’s worth the effort on your part, and you have information that we may need, we take “small balances” for collection.  Pretty soon, they add up to real money!

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