Netback

Netback is the amount of money returned to a client after the agency is paid their contingency fee.

As in most things the lowest cost provider is not always the best solution; especially when selecting an agency to represent your company. Lower fees often mean less attention to your accounts and less dollars spent on tools to increase collection rates. Lower fees can cause agencies to lower expenses and collection efforts to make a profit. Most often the agency that has a slightly higher contingency fee will generate more money from your collection portfolio. We recommend "netback" as a way to fairly compare agencies.

For example, let's say you place a total of $100,000 with 2 different agencies. You are fair and the average balances and the average age of the accounts are similar. Agency X has a 15% contingency rate and Agency Y is 20%. As you can see below, a small increase in recovery rate for Agency Y puts more money to your bottom line, even with the higher contingency rate.

                  

To win, look beyond the fees charged and ask what will be done to collect your dollars.