Published Friday, February 10, 2023 by Alan Holdren

I am always in internal and external battle as to what the correct fee structure to charge and client is and what is fair both for Atlas and for our client. We have all heard the Win Win mantra repeatedly, but it could actually apply for once.

I will contend that statistically there is a 1:1.3 ratio in play when collection fees need to be strategized. For every (1%) recovery percentage point an agency collects beyond aclient’s current recovery rate they could charge an additional (1.3%) recovery fee and still provide the same Net Collections back to the client, but increase the gross dollars/accounts back to the client over time.

Why is this important to a client? Several possibilities may emerge. Since collections is never a 100% proposition for any for the parties involved this can serve as an incentive to the agency to increase their fees as recovery percentages increase. It is all about larger numbers. This will cost nobody any additional dollars, but might provide a stimulus for agencies and clients to review their receivables and form a new battle plan to bring more dollars into each party’s pocket books.