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In-house or outsourcedPut your own recovery rate, team cost and agency quote side by side. The answer is often a split: keep the accounts you cure well and place the ones your team can't reach.
Outsource the accounts where an agency's recovery, after its fee, beats what your team nets after its full cost. Compare net dollars per dollar placed on both sides. As of October 2026, a split is common: in-house or first-party work on early accounts, an agency on the accounts your team can't reach or has stopped working.
TSI (Transworld Systems Inc.) publishes it. TSI provides Accounts Receivable Management (ARM), Healthcare Revenue Cycle Management (RCM), CXBPO and Loan Servicing (via UAS). DebtNext, a TSI company, makes recovery management software for creditors. Some options this page describes compete with services TSI sells. Each figure names its publisher and date so you can check it yourself.
Fill in every box to see the comparison.
In-house net = dollars recovered minus your team's cost. Agency net = dollars recovered minus the fee. The example values are illustrations, not benchmarks. Nothing you type leaves this page.
The calculator asks for 7 numbers. Four describe your team: dollars you could place each year, your in-house recovery rate on those dollars, the collectors working them and their loaded cost, and other yearly costs. Two describe the agency: the recovery rate you expect and its contingency fee.
The tool returns 3 things.
What you net each way. In-house net is dollars recovered minus the team's cost. Agency net is dollars recovered minus the fee. Both are also shown as a share of dollars placed, so you can compare a $2 million book with a $20 million one.
The difference per year. That's the headline, and it's only as good as the inputs.
The break-even fee. At your expected agency recovery rate, any fee below this number beats your in-house net. If an agency quotes 30% and your break-even is 28%, the decision is close and the pilot below matters more than the quote.
Here's the calculator's example filled in, then changed once to show how sensitive it is.
| Item | Example A | Example B |
|---|---|---|
| Dollars placed each year | $5,000,000 | $5,000,000 |
| In-house recovery rate | 15% | 16% |
| In-house cost (collectors plus other costs) | $332,000 (4 at $68,000, plus $60,000) | $300,000 |
| In-house net | $418,000 | $500,000 |
| Agency recovery rate and fee | 14% at 25% | 14% at 25% |
| Agency net | $525,000 | $525,000 |
| Break-even fee | about 40.3% | about 28.6% |
In Example A, the agency nets about $107,000 more, and any fee under about 40% would still beat the in-house team. In Example B, a leaner team that recovers more lands within $25,000 of the agency, and the break-even fee is close to the quote (TSI calculations on the inputs shown). Treat the figures as illustrations.
Results vary by portfolio, including account age, balance and type, and by client program.
The most common error is entering the full cost of a team you'll keep anyway. If your collectors move to billing questions or early reminders after you place the late accounts, their salaries don't go away. Enter only the costs that stop: the seats you won't backfill, the dialer licenses, letters, skip-tracing data, and the compliance and quality work tied to those accounts.
For a sanity check on loaded cost, the U.S. Bureau of Labor Statistics put the median wage for bill and account collectors at $47,030 in May 2025. Benefits, payroll taxes, space, supervision and turnover come on top.
Some trade-offs don't fit in a cell.
Control. Your own team follows your tone exactly. An agency follows your rules only as well as you write and audit them.
Compliance load. A third-party program brings validation notices, Regulation F call limits counted per debt (12 CFR 1006.14), state licensing and complaint handling. A good agency carries that work; you still own the oversight.
Recovery time. Accounts your team works part-time between other tasks age fast. An agency that starts contact within days can change your curve more than its fee changes your margin.
Customer value. If the customer is worth keeping, first-party work in your name is often the better middle path. First-party vs third-party collections sets out that split.
Don't move a whole portfolio on a spreadsheet. Take a random slice of similar accounts, place it with the agency, keep the rest in-house, and compare net-back on the same placement months. Three to six months of curves usually tells you enough to decide.
What collection agencies charge explains net-back and fee models. If you're weighing a sale instead, see whether to sell charged-off accounts or keep placing them.
Sometimes. It's cheaper when your team recovers well and costs little per dollar recovered, often on early, high-contact accounts. It's usually dearer on old or hard-to-reach accounts, where skip tracing and licensing cost more than they return for a small team.
Salary, benefits, payroll taxes, space and equipment, plus a share of supervision and turnover. Put dialer, letters, data, compliance and audit costs in the "other yearly costs" box so you can see them separately.
Yes, and many creditors do. Common splits are by stage (first-party in-house, charged-off accounts to an agency), by balance band or by account type. A split also gives you a live comparison.
Use a pilot or your current agency's reports for similar accounts. Avoid quoted industry averages; collection agency recovery rates explains why they rarely transfer.
General information, current as of Nov 5, 2026. It isn't legal advice. Rules change and differ by state, so check the sources linked here and talk to your own counsel before you act on it.
The Recovery Performance Diagnostic takes one portfolio or segment, sets your in-house baseline and designs a measured carve-out, so the pilot answers the question the calculator raises.
