What is Netback?
Netback is the dollar amount of recoveries minus the fee for service – and IC System offers a higher level of netback.
Provides a true look at collection agency recoveries
Helps determine which fees and services will return more net cash to your business
Can be used to evaluate effectiveness when comparing two agencies
Low Fees Don’t Mean High Value
The value of an agency can’t be measured solely based on its fees.
- Low fees could be a warning sign that important features will NOT be applied
- The penetration rate on accounts could be low
- They may have high collector-to-account ratios
- Many agencies charge extra for services like credit reporting, but not IC System
How to Use Netback
Keeping those potential warning signs in mind, it’s important to make a decision by making a comparison.
For example:
| Agency 1 | Agency 2 | |
|---|---|---|
| Amount Submitted | $20,000 | $20,000 |
| Amount Collected | $1,200 (6%) | $3,200 (16%) |
| Agency Fees | $336 (at 28%) | $1,120 (at 35%) |
| Netback | $864 | $2,080 |
Not Sure Where to Start for Your Business?
Our experts can help develop the right approach to debt collection for your business. We’ll talk about your goals and accounts receivable inventory to create a solution that will increase your revenue. Together, let’s find the debt collection service that’s right for your business.
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