Keep credit control in-house when the work needs judgement or the customers are relationships you want to protect, and consider outsourcing when you have a high volume of routine invoices and nobody with time to chase them. Before deciding, check how much of the work could go away: invoices collected automatically go overdue far less often, which changes how much there is to hand over.
In this article
The short version
- In-house keeps judgement and relationships; outsourcing buys capacity.
- Outsourcing suits high volumes of routine invoices to customers you don't advise.
- A collection agency is a different decision, for debts that have already gone bad.
- Invoices collected automatically go overdue far less often than ones customers have to pay on request.
- Move recurring customers to direct debit and automate reminders before deciding.
What each option gives you
| Option | What you get | What you give up |
|---|---|---|
| In-house | Judgement, context and control of the relationship | Capacity, and cover when someone's away |
| Outsourced credit control | Trained capacity and a consistent process | Some context, and some control of tone |
| Debt collection agency | Recovery of debts that have already gone bad | A share of what's recovered, and often the customer |
| Software and automation | The repetitive follow-up done for you | Some set-up time, and you still make the decisions |
It's worth separating the middle two. An outsourced credit control team chases current invoices on your behalf, usually in your name, as an extension of your finance function. A collection agency pursues debts that have already failed, usually for a percentage of what it recovers. They get mixed up in conversation, but they're different decisions made at different points.
Outsourced credit control is usually priced per account, per invoice or as a monthly retainer. The price only makes sense once you know how much of your current workload is unavoidable.
When outsourcing makes sense
Outsourcing tends to pay off in a few situations:
- High volume and low sensitivity: lots of small invoices to customers you don't have a close relationship with.
- No finance function at all: if the alternative is you chasing invoices at nine in the evening, a team that does it every day is likely to be better.
- A backlog you need clearing once: a one-off project on old debts is a good use of outside help, though not a reason to sign a long contract.
- Specialist needs, such as debts owed from overseas, where the knowledge is worth paying for.
When to keep it in-house
If your invoices go to customers you advise or work closely with, there's a strong case for keeping credit control close. An accountancy practice that outsources fee collection puts a stranger between itself and its own clients, and the cost of that doesn't show up in a per-invoice price.
Keep it in-house when most decisions need judgement. Deciding whether to press a good customer who's late for the first time is a judgement. Sending a reminder on day 8 isn't, but if every escalation needs your sign-off anyway, outsourcing may add a step instead of removing one.
And look closely at what's driving the work. If one large customer is chronically late, you've got a commercial conversation about terms or pricing, which an outside team can't have for you. Problems with an outsourced team also tend to reach you later, often from the customer.
What to fix before you decide
Most comparisons treat your current workload as fixed. Research for the Department for Business and Trade and the Small Business Commissioner found that businesses which spend staff time chasing late payments average 86 hours a year on it. If much of yours is following up invoices that could have been collected automatically, you'd be paying someone for work you don't need done.
The collection method makes a big difference. In Adfin's payment data, invoices set to collect automatically went overdue far less often than those that relied on the customer paying a request. The automatic group was mostly direct debits under mandates already in place, so it isn't a like-for-like comparison, but the difference in follow-up work is large.
So it usually pays to fix things in this order. Put your recurring customers on direct debit. Automate the follow-up schedule for everything else. Then look at what's left and decide who should do it. Adfin's essential credit control is free, so once your schedule is set, reminders go out by email, SMS or WhatsApp without anyone having to send them, and its Customer Agents adapt the timing and channel for each customer within rules you approve.
What's left tends to be a much smaller set of difficult conversations with customers you know, which is the work many businesses prefer to keep in-house.
Common questions
Should I outsource credit control? It can make sense for a high volume of routine invoices to customers you don't advise. Keep it in-house where decisions need judgement or the relationship matters, and fix how you collect first, because that changes how much work there is.
What's the difference between outsourced credit control and a debt collection agency? Outsourced credit control chases current invoices as an extension of your finance team. A collection agency pursues debts that have already gone bad, usually for a share of what it recovers.
How much does outsourced credit control cost? It's usually priced per account, per invoice or as a monthly retainer. Compare it against your workload after automating what can be automated, not before.
Is outsourcing bad for client relationships? It depends on the client. Transactional customers rarely notice, but for clients you advise, an outside voice chasing your fees is a real risk.
Can software replace a credit controller? It can take over the repetitive follow-up but not the judgement. Someone still has to decide what to do about the customer who can't or won't pay.
What should I fix before deciding? Move recurring customers to direct debit and put the follow-up schedule on a system, then measure what's left. The decision is easier when you're placing real work.
Sources
- Department for Business and Trade and Small Business Commissioner - Late payments research: impact on the UK economy (accurate as of October 2026) https://assets.publishing.service.gov.uk/media/688a089a6478525675738ff9/late_payments_research_impact_on_uk_economy.pdf
- GOV.UK - Late commercial payments: charging interest and debt recovery (accurate as of October 2026) https://www.gov.uk/late-commercial-payments-interest-debt-recovery
- Adfin - Credit control (accurate as of October 2026) https://www.adfin.com/credit-control
- Adfin - Pricing (accurate as of October 2026) https://www.adfin.com/pricing
