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Should I use a debt collection agency for an unpaid invoice?

Short answer

A collection agency can make sense when reminders, calls and a final notice have failed and the amount is worth the cost. business.gov.au notes commissions commonly range from about 5% to 30% of the debt. Check the agency is properly licensed in your state where required, ask how they contact debtors, and remember you can be responsible for their conduct.

General information only, not legal or financial advice. Every business and every debt is different. For advice on your situation, talk to a lawyer, your accountant or your state small business commissioner.

Step by step

  1. 1

    Exhaust the cheap steps first

    Reminders, calls, final notice and mediation.

  2. 2

    Tell your customer you will refer it

    This alone often prompts payment.

  3. 3

    Compare fees and approach

    Commission, upfront fees and legal costs.

  4. 4

    Check licensing and conduct

    Ask how they follow the ACCC and ASIC guideline.

  5. 5

    Hand over a tidy file

    Invoices, terms, reminders and call notes.

What else to know

The ACCC and ASIC guideline says a creditor using an agent will generally be responsible for that agent's conduct. Choose carefully.

Final notice template

Common questions

How much do debt collectors charge?

business.gov.au says most commission rates fall between 5% and 30% of the debt.

Will using an agency end the customer relationship?

It might. For valuable customers, try negotiation and a payment plan first.

Official sources

Sources checked 14 October 2026. Rules and limits change, so check the official site before acting.

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