The In-House Collection Approach
In-house collections means managing the entire recovery process with your own staff — from initial reminder calls to final resolution. Many organizations start here because it feels like the natural extension of their billing process.
Advantages of In-House Collections
Direct control over the process. You set the tone, pace, and approach for every interaction. If a key customer needs special handling, you can adjust immediately without going through a third party.
Brand consistency. Your staff knows your brand voice and can represent your organization naturally during collection conversations. For businesses where the customer relationship extends beyond the unpaid balance, this consistency matters.
Immediate information access. Internal collectors have direct access to your billing system, customer history, and account details. They can answer questions, resolve disputes, and make decisions without waiting for data from an external partner.
No contingency fees. You don't pay a percentage of recovered amounts to a third party. All collected revenue stays in your organization (though you do absorb the full cost of the collection operation).
Disadvantages of In-House Collections
High fixed costs. Collection staff require salaries, benefits, workspace, technology, training, and management — regardless of volume. During slow periods, these costs persist even when there are few accounts to work. Write your own figures in the worksheet below. This page does not publish a salary benchmark.
Limited expertise. Most internal billing staff aren't trained debt collectors. They lack specialized skills in negotiation, skip tracing, and compliance. The learning curve is steep, and mistakes can be costly.
Compliance risk. The FDCPA, state collection laws, and industry-specific regulations like HIPAA create complex compliance requirements. Maintaining a current, comprehensive compliance program requires dedicated resources and expertise that many organizations lack.
Relationship strain. When the same person who provides service also makes collection calls, the dual role creates uncomfortable dynamics. Staff may avoid assertive collection conversations to preserve the service relationship.
Older accounts get less attention. Internal staff often deprioritize older accounts in favor of more immediate tasks. This page does not estimate how recovery changes with age.
The Outsourced Collection Approach
Outsourced collections means partnering with a professional debt collection agency to recover delinquent accounts. The agency handles contact, negotiation, payment processing, and compliance on your behalf.
Advantages of Outsourced Collections
A different kind of work. An agency's day is collection work: contact, negotiation, skip tracing, and payment processing. That is not a recovery-rate claim. Recovery is uncertain, and this page does not estimate a difference versus an internal team.
Variable cost structure. Most agencies work on contingency — you pay a percentage only on amounts actually recovered. This eliminates the fixed costs of internal collection and aligns the agency's incentives with yours. No recovery means no cost.
Compliance expertise. Reputable agencies keep a documented compliance program for the FDCPA, HIPAA where health information is involved, and the state rules that apply to the accounts they work. MSB's compliance programs cover those subjects. MSB is licensed where required. Ask our team to confirm service availability for the account type and states involved before placement.
Specialized technology. Collection agencies invest in communication platforms, skip tracing tools, and payment portals. Whether that cost is worth it depends on your own volume. This page does not claim a result from the tools.
Scalability. As your placements rise or fall, the agency absorbs the volume without you hiring or training additional staff. This flexibility is invaluable for organizations with variable account volumes.
Separation of roles. An external collection partner creates healthy distance between your service relationship and the collection process. Your staff focuses on service delivery while professionals handle the difficult financial conversations.
Disadvantages of Outsourced Collections
Contingency fees. You share a portion of recovered revenue with the agency. The rate is in a written proposal. It is not on this page. If nothing is collected, a contingency fee is not owed. That is not a promise of recovery, and it is not a claim that outsourcing costs less than your own operation.
Less direct control. While you set guidelines and expectations, the day-to-day collection activities are managed by the agency. Choose a partner that provides transparency and regular reporting to maintain visibility.
Reputation risk with poor agencies. An agency that uses aggressive or unethical practices reflects poorly on your organization. This risk is mitigated by carefully vetting your collection partner and monitoring their performance.
Side-by-Side Comparison
| Cost to compare | Your current cost | Written proposal |
|---|---|---|
| Staff pay and benefits | ||
| Workspace, software, and skip tracing | ||
| Training and compliance | ||
| Fee or contingency | ||
| Accounts you place in a typical month | ||
| What you expect to recover | Recovery is uncertain |
Leave the middle column blank until you fill in your own figures. The right column is for a written proposal, not a rate printed on this page.
A hybrid approach
Many successful organizations use a hybrid approach: internal follow-up for the first 60-90 days, then outsourced collection for accounts that don't respond to initial efforts. This captures the relationship advantages of internal follow-up while leveraging professional expertise for harder-to-collect accounts.
Early-out collection programs formalize this hybrid approach for healthcare providers, with professional collectors working accounts under your organization's name during the early delinquency period.
Making Your Decision
Use the worksheet. Outsourcing is worth a conversation when staff time on collections pulls people off the work you hired them to do, when compliance questions keep coming up, or when volume swings make a fixed team expensive. Staying in-house is worth a conversation when the work is a small part of someone's job and the accounts need knowledge only your team has. This page does not set an account-count cutoff, a balance cutoff, or a recovery-rate cutoff.
See the MSB Difference
Midwest Service Bureau, founded in 1970, helps organizations move from internal collection to professional recovery. Our outsourced AR approach works on contingency under a documented compliance program.
Request a collection consultation. Tell us about your organization and the accounts you need help with. Our team will review your enquiry and contact you about the next step. Recovery is uncertain. Do not include patient names, account numbers, Social Security numbers, payment-card details, or documents.