Unpaid invoices drain your business. When friendly reminders fail and clients ignore your emails, hiring a collection agency seems like the logical next step. The good news: most agencies in the Netherlands work on a "no cure, no pay" basis, meaning you pay nothing upfront. But free doesn't mean costless — and there are smarter ways to recover what you're owed.
This guide breaks down how free debt collection agencies actually work, what they cost when they succeed, when it makes sense to hire one, and why many businesses are switching to automated alternatives that recover more money at a fraction of the cost.
How Free Debt Collection Agencies Work
The term "free debt collection agency" refers to agencies that operate under the no cure, no pay model. You don't pay anything to submit a case, and if the agency fails to collect, you owe nothing. It sounds like a no-brainer, but the economics are more nuanced than they appear.
When you submit an unpaid invoice to a no cure, no pay agency, they take over the collection process. They send demand letters, make phone calls, and apply increasing pressure on the debtor. If the debtor pays, the agency deducts their commission — typically 15-25% of the recovered amount — before transferring the rest to you.
The debtor also pays the statutory collection fees (incassokosten) on top of the original debt. In the Netherlands, these fees follow the WIK schedule: 15% on the first €2,500, with decreasing percentages for higher amounts. The minimum is €40, regardless of the debt size.
So while you don't pay anything out of pocket, you do lose a significant slice of the recovered amount to commission. On a €5,000 invoice, that's €750-€1,250 you'll never see.
The collection process typically follows a predictable pattern. The agency sends a formal demand letter (sommatie) to the debtor, giving them 14 days to pay. This letter includes the original debt, any accrued interest, and the statutory collection fees.
If the debtor doesn't respond, the agency escalates with phone calls, additional letters, and sometimes a physical visit. Most reputable agencies exhaust all extrajudicial options before recommending legal action, because court proceedings add costs and complexity.
The entire process usually takes 30-90 days for extrajudicial collection. If the agency recommends going to court, expect an additional 3-6 months and significant legal costs that may or may not be recoverable.
What "Free" Actually Costs You
Understanding the true cost of using a collection agency requires looking beyond the absence of upfront fees. There are several hidden costs that eat into your recovery.
The most obvious cost is the agency's commission. At 20% (a common rate), here's what you actually receive:
For a €1,000 invoice, you get back €800. For €5,000, you receive €4,000. A €10,000 debt returns €8,000. That €2,000 gap on a €10,000 invoice could fund your billing software for eight years.
These percentages typically increase for older debts, smaller amounts, or international collections. Some agencies charge 30% or more for debts older than 180 days.
Collection agencies are not known for diplomacy. Their job is to apply pressure, and that pressure often burns bridges permanently. If the debtor is a client you'd like to retain, an aggressive collection approach can destroy that relationship beyond repair.
This matters especially for B2B businesses where client relationships span years and represent significant lifetime value. Losing a client over a single overdue invoice — when the real issue might have been a temporary cash flow problem — is a costly mistake.
Submitting a case isn't instant. You need to prepare documentation, provide proof of the debt, share correspondence history, and often fill out detailed intake forms. After submission, agencies require ongoing communication about the case status, debtor responses, and any partial payments.
For businesses dealing with multiple overdue invoices, this administrative overhead compounds quickly.
When Hiring a Collection Agency Makes Sense
Despite the costs, there are situations where an external agency is the right choice.
For invoices over €5,000 that have been overdue for more than 90 days, the commission cost may be worth it. At this point, the probability of collecting without professional help drops significantly. An experienced agency with legal capabilities can recover debts that would otherwise be written off entirely.
If you've sent multiple reminders, made phone calls, and offered payment plans — all without result — it's time to escalate. An agency brings legal weight and professional collection experience that a business owner sending emails simply can't match.
When a debtor actively disputes the debt or refuses to pay despite clear obligations, legal action may be necessary. Collection agencies with affiliated lawyers can handle court proceedings, debt enforcement, and asset seizure in ways that general businesses cannot.
The Smarter Alternative: Automated Debt Collection
Here's what most business owners don't realize: 85% of overdue invoices can be collected through automated escalation before an external agency is ever needed. The key is catching overdue payments early and applying consistent, professional pressure.
Automated billing software handles the collection process from day one of a missed payment. Instead of waiting 60-90 days before submitting to an agency — letting the debt age and the probability of recovery drop — automation starts working immediately.
The results speak for themselves. Invoices addressed within the first week have a 95% collection rate. By day 30, that drops to 85%. By day 90, when agencies typically get involved, it's down to 70%. The longer you wait, the harder it gets.
Modern billing platforms like PayRequest replace the entire collection pipeline that agencies provide:
Stage 1 (1-14 days overdue): Friendly reminder via email and SMS with a direct payment link. Most overdue invoices get resolved here — the client simply forgot or the payment bounced.
Stage 2 (14-28 days overdue): Formal payment notice with a firm deadline. Sent through multiple channels (email, SMS, postal mail) to ensure the debtor sees it.
Stage 3 (28-42 days overdue): Collection fees (incassokosten) are automatically calculated and added to the balance. The debtor receives a WIK-compliant demand including the exact fee amount.
Stage 4 (42+ days overdue): Final warning before external escalation. At this point, only the most problematic debtors remain — and those are the ones where an agency might actually be worthwhile.
The math is straightforward. PayRequest's complete billing and collection platform costs €20/month — regardless of how many invoices you collect. There's no commission, no per-case fee, and no percentage deducted from recovered amounts.
Compare that to an agency at 20% commission: collecting ten €1,000 overdue invoices through an agency costs you €2,000 in commission. Collecting the same invoices through automated software costs €20. That's a 99% reduction in collection costs.
Even if automation only handles 85% of cases and you still need an agency for the remaining 15%, you've dramatically reduced your total collection costs. Instead of paying commission on all ten invoices, you pay commission on only one or two.
The New Rules: Dutch Debt Collection Regulation (Wki)
Starting April 2024, all debt collection agencies in the Netherlands must hold a license under the Wet kwaliteit incassodienstverlening (Wki). And from October 2026, debtors only need to respond to collection actions from registered agencies.
The Wki regulation is designed to protect both debtors and creditors from unscrupulous collection practices. For businesses, it means you should verify that any agency you hire is registered in the official register (register incassodienstverlening).
Using an unregistered agency after October 2026 is not just risky — it's potentially ineffective, since debtors can legally ignore demands from unregistered collectors.
The Wki requirements don't apply to businesses collecting their own debts. When you use billing software to manage your own collection process, you're acting as a creditor — not an incassodienstverlener. This means no registration requirements, no additional compliance burden, and full control over how you communicate with your clients.
Setting Up Your Own Collection Process
You don't need to be a debt collection expert to recover overdue payments effectively. With the right tools and a structured approach, any business can handle most collection scenarios in-house.
The best collection strategy is prevention. Send invoices promptly, offer multiple payment methods, set clear payment terms, and send automatic reminders before the due date. PayRequest's invoicing handles all of this out of the box.
Configure a multi-stage escalation that runs without manual intervention. Each stage should increase in urgency and use additional channels. The combination of email, SMS, and postal mail ensures your message gets through.
After sending a proper 14-day aanmaning (required for B2C debts, recommended for B2B), add the statutory collection fees to the debtor's balance. This creates a financial incentive to pay quickly and covers your collection costs.
Some debtors want to pay but can't afford the full amount at once. A customer portal where they can view their balance and set up a payment plan converts many otherwise "uncollectable" debts into regular payments.
Reserve external agencies for the small percentage of cases that genuinely need professional intervention — typically old debts with unresponsive debtors where legal action may be required.
Making the Right Choice for Your Business
The question isn't whether to collect overdue payments — it's how. A "free" collection agency sounds attractive, but the 15-25% commission on every recovered euro adds up fast. For most businesses, automated collection software pays for itself within the first recovered invoice.
Start with automation. Handle 85% of overdue invoices through structured escalation, professional communication, and self-service payment options. For the remaining cases, use an agency strategically — knowing that you've already recovered the easy wins at near-zero cost.
Ready to stop losing money to collection agency fees? Start collecting with PayRequest at €20/month — with automated escalation, collection fee calculation, and a customer portal included.