How to Choose the Best Debt Collector in South Africa for Your Business — The Proven Guide

Table of ContentsThe Short Answer: What to Look For FirstWhy Choosing the Wrong Debt Collector Costs You More Than Just MoneyAre They Registered? The Non-Negotiable Starting PointThe Checklist: 7 Proven Criteria to Evaluate Any Debt Collector in South AfricaFee Structures Explained — And the Red Flags to Watch ForThe “Relationship Test”: What Separates Good Collectors from Great OnesSoft vs. Hard Collections — And Why It Matters for Your BusinessIndustry-Specific Experience: Does It Actually Matter?What Our Team Found After 26+ Years in Commercial Debt RecoveryQuick-Reference Comparison ChecklistFAQ: Your Most Common Questions Answered1. The Short Answer: What to Look For FirstIf you want to know how to choose the best debt collector in South Africa for your business, here it is in plain language: look for a registered, contingency-based collector who specialises in commercial (B2B) debt, assigns you a dedicated relationship manager, and operates with full transparency — no hidden fees, no contractual lock-ins, and no call-centre runaround.

That’s the foundation. Everything else in this guide helps you verify whether a collector actually delivers on those promises — or just talks a good game.

2. Why Choosing the Wrong Debt Collector Costs You More Than Just MoneyLet’s be direct about this. A bad debt collector doesn’t just fail to recover your money — they can actively damage your reputation with clients, expose you to legal risk, and waste weeks of your credit team’s time in back-and-forth. We’ve spoken to CFOs and credit managers who’ve gone through exactly this. The frustration is real.

In South Africa’s business environment, where slow payments are epidemic — research consistently shows that late payment is one of the biggest cash flow killers for SMEs — the stakes of getting this decision wrong are high. When your debtor days climb and your overdue book grows, you need a collector who acts as an extension of your business, not a blunt instrument that alienates your customers.

“The best debt recovery firm doesn’t just collect money — they protect your business relationships while they do it.”That’s what separates a professional commercial debt collector from the rest. And it’s the lens through which you should evaluate every option.

3. Are They Registered? The Non-Negotiable Starting PointBefore anything else — registration. In South Africa, debt collectors are required by law to be registered with the Council for Debt Collectors (CFDC), as governed by the Debt Collectors Act 114 of 1998. Any collector operating without this registration is doing so illegally — and using them exposes your business to significant legal and reputational risk.

Ask for:

Their CFDC registration number (and verify it at www.cfdc.org.za)Proof that their trust account is independently audited, since collected funds should be held and disbursed correctlyKredcor, for example, holds CFDC registration number 0016365/06 — with a 100% clean record over more than 26 years. That kind of track record speaks for itself. But whoever you’re evaluating, these are your first questions to ask — before you discuss anything else.

4. The Checklist: 7 Proven Criteria to Evaluate Any Debt Collector in South AfricaWhen our team reviewed what makes a commercial debt collector genuinely effective for South African businesses, we found the same seven factors coming up again and again. Use this as your working checklist.

1. Registration and compliance As covered above — CFDC registration is non-negotiable.

2. Specialisation in B2B (commercial) debt Consumer debt collection and commercial debt collection are very different disciplines. Commercial debt involves larger amounts, more complex disputes, longer relationships, and different legal frameworks. Make sure your collector has demonstrated expertise in B2B recovery — not just consumer collections. Our full breakdown of what this looks like in practice is covered in our guide to professional B2B debt collection services in South Africa.

3. No-success, no-fee structure A contingency model means the collector only earns when they recover. This aligns their incentives perfectly with yours — they have every reason to work hard and none to drag things out unnecessarily. Be very cautious of collectors who charge upfront retainers, monthly admin fees, or handover fees regardless of outcome.

4. Dedicated account management You should never have to explain your case to a different person each time you call. Insist on a named, dedicated relationship manager who knows your accounts, your debtors, and your business preferences. The call-centre model is a red flag in commercial collections.

5. Transparent, regular reporting You should receive written progress reports at least monthly. If a collector can’t tell you — in writing — what’s happening with each of your accounts, that’s a problem. You are entitled to full visibility at all times.

6. Pre-legal capability The best collectors take pre-legal action from day one. This means formal demand letters, structured communication, and targeted pressure — all before costly legal proceedings become necessary. This saves you time and significantly reduces your attorney bills. Ask any prospective collector exactly what their pre-legal process looks like and how quickly they move.

7. A proven track record with businesses like yours Ask for references. Ask for case studies. Ask which industries they’ve worked in. A collector with deep experience in your sector — whether that’s transport and logistics, manufacturing, agriculture, or professional services — will understand your client relationships and the nuances of your debtor base far better than a generalist.

5. Fee Structures Explained — And the Red Flags to Watch ForThis is where a lot of businesses get caught out. Fee structures in debt collection vary widely, and some are designed to benefit the collector far more than the client.

Here’s what you need to know:

Contingency (no-win, no-fee): The collector takes a percentage of what they recover. If they collect nothing, you pay nothing. This is the gold standard for commercial collections and the model you should insist on.Fixed fee: A flat rate per account or per service. Can work for specific, defined tasks, but watch out for fees that apply regardless of success.Retainer + commission: Monthly fee plus a percentage of recoveries. This almost always benefits the collector, not you.Red flag — hidden fees: Always ask explicitly about handover fees, administrative charges, tracing fees, default listing costs, and any external action charges. Reputable collectors will pre-approve all external costs with you before incurring them.Our advice: get the full fee schedule in writing before signing anything. A transparent collector will have no problem providing this.

6. The “Relationship Test”: What Separates Good Collectors from Great OnesHere’s something that doesn’t always make it onto standard checklists, but we consider it essential: how does the collector treat your debtors?

This matters because your debtor today may still be your client tomorrow. In commercial collections, aggressive, heavy-handed tactics can permanently destroy valuable business relationships. The best debt collectors understand this. They approach debtor communication with professionalism, empathy, and strategic intent — working to resolve the root cause of non-payment, not just to extract a cheque.

“We determine the root cause of the non-paying problem, understand your client, communicate with them, and implement best practices for dealing with the situation — without causing harm to any of the parties involved.”This is the approach that protects your brand, preserves customer goodwill, and still gets you paid. It’s also deeply connected to the ethical framework all registered collectors are required to operate within. For a closer look at why this matters so much — especially from a compliance and reputational risk perspective — read our article on the importance of ethical debt collection in South Africa.

7. Soft vs. Hard Collections — And Why It Matters for Your BusinessPart of knowing how to choose the best debt collector in South Africa is understanding the difference between soft collections (early-stage, relationship-preserving outreach) and hard collections (firm, pre-legal, and legal action for non-responsive debtors). You want a collector who’s skilled at both — and who knows precisely when to shift from one to the other.

A collector who jumps straight to hard tactics on a debtor who simply needs a payment arrangement will cost you a client. A collector who stays soft on a debtor who’s clearly avoiding payment will cost you the money. Strategic judgement here is everything.

The right collector will map out this process for you from the start — showing you exactly at which point they escalate, and how they’ll communicate with you throughout.

8. Industry-Specific Experience: Does It Actually Matter?Yes — significantly. A debt collector who’s worked extensively with transport and logistics businesses understands the common dispute types, the documentation trail, the relationships between debtors, and the pressure points that move accounts. The same principle applies across industries — from estate and homeowners’ associations to equipment rental businesses, agricultural suppliers, and professional services firms.

When evaluating a collector, ask specifically: Which industries do you have the most experience in? Can you give me examples of recoveries in my sector? The quality of their answer will tell you a great deal about the depth of their experience.

9. What Our Team Found After 26+ Years in Commercial Debt RecoveryI want to be direct here, because experience has taught us some things that aren’t obvious from the outside.

We found that the businesses with the best debt recovery outcomes are almost always those who involve a professional collector early — before accounts become deeply overdue. The longer you wait, the harder and more expensive recovery becomes. If an account is 60 days overdue, act. Don’t wait for 120.

We found that clients who give their collector full, accurate documentation — signed agreements, delivery notes, purchase orders, correspondence — consistently achieve better recovery rates. The paper trail is your best asset.

We found that businesses that treat debt collection as a proactive, strategic function — rather than a reactive, last-resort option — carry significantly lower bad debt levels over time. This connects directly to the broader discipline of credit management, which you can explore further in our guide to 7 essential credit management practices to minimise B2B bad debt in South Africa.

We also found that the collector-client relationship works best when there’s genuine two-way communication. You should be able to contact your account manager whenever you need to — and they should be reaching out to you proactively with updates.

10. Quick-Reference Comparison ChecklistUse this when evaluating any debt collector in South Africa:

CriterionWhat to Ask / VerifyCFDC RegistrationRequest registration number; verify at cfdc.org.zaFee ModelContingency only? Any admin/monthly/handover fees?Dedicated ManagerNamed individual, not a call centreReportingWritten monthly reports as standard?Pre-legal ProcessWhat does it look like? How fast do they act?B2B SpecialisationCommercial debt only, or mixed consumer/commercial?Trust AccountIndependently audited? Where are funds held?Industry ExperienceDirect experience in your sector?Client ReferencesCan they provide references from similar businesses?External Cost ApprovalDo they get your sign-off before incurring external costs?Contract TermsOpen-ended agreement, or contractual lock-in?If a collector can’t answer every one of these questions clearly and confidently, that tells you something important.

❓ FAQ: How to Choose the Best Debt Collector in South AfricaQ: What is the most important thing to check when choosing a debt collector in South Africa?

A: Registration with the Council for Debt Collectors (CFDC) under the Debt Collectors Act 114 of 1998 is the single most important starting point. An unregistered collector is operating illegally. After that, verify their fee structure (insist on no-success, no-fee), their specialisation in commercial debt, and whether they assign you a dedicated relationship manager.

Q: How much do debt collectors in South Africa typically charge?

A: Reputable commercial debt collectors operate on a contingency basis — meaning they charge a percentage of the amount successfully recovered, and nothing if they don’t collect. The percentage varies depending on the age and complexity of the debt, the amount involved, and whether legal action is required. Be wary of any collector who charges upfront fees, monthly retainers, or administrative charges that apply regardless of outcome. Always request a full, written fee schedule before proceeding.

Q: Can a debt collector in South Africa contact my clients directly?

A: Yes — that’s precisely what they’re appointed to do. However, all contact must comply with the Debt Collectors Act 114 of 1998, the National Credit Act (where applicable), and POPI Act (Protection of Personal Information Act) requirements. A professional, registered collector will conduct all communications within this legal framework, professionally and ethically — protecting your business relationship with the debtor in the process.

Q: How long does the debt collection process take in South Africa?

A: This depends on several factors, including how long the debt has been outstanding, the complexity of the dispute, the debtor’s responsiveness, and whether legal action is required. Pre-legal collection action — formal demands, negotiation, and payment arrangements — can sometimes resolve accounts within weeks. Where legal action becomes necessary, the timeline extends significantly. This is why early intervention is so strongly advised: the fresher the debt, the faster and cheaper the recovery.

Ready to Get Your Money Where It Belongs?Knowing how to choose the best debt collector in South Africa for your business is the first step. The next one is making the right call.

Kredcor is a registered, CFDC-accredited commercial debt recovery firm with a 100% clean compliance record spanning over 26 years. We work on a strict no-success, no-fee basis — with no hidden costs, no contractual lock-ins, and a dedicated Senior Pre-Legal and Credit Risk Manager assigned to your account from day one. We operate across South Africa and into Africa, serving SMEs, corporates, and multinationals across a wide range of industries.

Kredcor is registered with the Council for Debt Collectors of South Africa (Reg Nr 0016365/06) .

This article is for informational purposes only and does not constitute legal advice.