Misconceptions and Myths About Collection Costs

For many business owners, debt collection is a necessary evil: receivables remain outstanding, invoices go unpaid, and valuable liquidity is lost. But as soon as the word "debt collection" comes up, many questions arise: Isn’t it expensive? Who actually pays for it? And how transparent is the cost structure in practice? This article provides clear and comprehensive answers to exactly these questions. Modern collection services like KLEVERBILL deliver transparency and fairness—for creditors and debtors alike.

Legal Framework: What Does the Legislator Say About Collection Costs?

Collection costs are not arbitrary. They are based on legal provisions, in particular the German Lawyers’ Remuneration Act (RVG) and Section 288 of the German Civil Code (BGB) (damages caused by default). If a debtor falls into default, the creditor may claim compensation for so-called default damages. This also includes the costs of engaging a debt collection agency or a lawyer.

Collection fees are based on the amount of the claim. As a rule, they are typically aligned with a 0.5 to 1.3 fee multiplier under the RVG. For a claim of EUR 500, this may amount to around EUR 70, for example. Important: In the event of default, the creditor may pass these fees on to the debtor.

Out-of-Court vs. Judicial Collection: Which Costs Arise and When?

Collection proceedings are divided into two main phases:

• Out-of-court collection: The objective is to induce the debtor to pay without court action. Costs here mainly include collection fees and, where applicable, costs for credit checks, phone-based collection, or written correspondence.

  
  

• Judicial collection: If out-of-court reminders are unsuccessful, an order for payment can be requested or legal action filed. This results in additional court fees, service costs, and legal fees.

A modern collection system like KLEVERBILL aims to avoid court proceedings to save both costs and time.

Who Actually Pays for Collection—Debtor or Creditor?

This is one of the most common questions. As a general rule, the debtor is obligated to reimburse the creditor for all costs caused by payment default. This means:

• Collection costs are generally payable by the debtor — provided the debtor is in default and the costs are reasonable.

  
  

• If the debtor is unwilling or unable to pay, the creditor may, in some cases, bear part of the costs—unless they work with a provider like KLEVERBILL that offers performance-based models.

Practical Cost Examples

A practical example helps illustrate this:

• Claim amount: EUR 1,000

• Collection fee under RVG (1.3 fee rate): approx. EUR 130

• Postage & administrative writing costs: approx. EUR 10

• Credit check (optional): approx. EUR 5–20

• Total costs: approx. EUR 145–160

If the debtor pays, these costs are included. If not, the creditor must decide whether to initiate legal action or waive part of the amount.

Our Tip: Reduce Collection Costs Through Smart Processes

Debt collection should always be the final step. Companies that set up modern, digital receivables management can prevent many collection cases. This includes:

• Automated reminder workflows with fixed payment terms

• Transparent communication with customers

• Early payment reminders via email, SMS, or post

• Real-time monitoring of outstanding receivables

This is exactly where KLEVERBILL comes in, helping companies make their dunning processes more efficient—before a collection case even arises.

How KLEVERBILL Supports You—Including a Transparent Cost Model

KLEVERBILL is more than just a collection system. It is a complete order-to-cash platform that automates processes and keeps costs under control. Key advantages:

• Performance-based billing: You only pay when we deliver results.

• No hidden costs: Full transparency on every fee.

• Digital processing: No paperwork battles, no lengthy procedures.

• Seamless integration into your existing software landscape (ERP, accounting, CRM)

Companies working with KLEVERBILL report significantly higher recovery rates on outstanding receivables—with substantially less effort.

Debt Collection Doesn’t Have to Be Expensive—Especially Not with KLEVERBILL

If you have outstanding receivables, acting quickly and professionally is essential. The fear of high collection costs is unfounded—especially when you have a transparent, modern partner like KLEVERBILL at your side. Whether out of court or in court, whether a sole proprietorship or a corporate group: with a clear cost model, digital processing, and fair terms, you retain control—over both your process and your liquidity.

Get informed now and accelerate your results with KLEVERBILL!