In one sentence
B2B debt collection in India is usually priced as a success fee: a percentage of the amount actually recovered, set mainly by how old the debt is, then by its size, the documents behind it and where the debtor is. Receivables management is usually a monthly fee, and legal enforcement adds the advocate's fee and court fees as separate costs.
Key takeaways
- The age of the debt sets the percentage more than anything else. An invoice 90 days overdue costs less to recover than one two years old.
- Read what "recovered" means in the contract. A fair agreement charges only on money you actually receive, and says whether direct payments count and for how long.
- Legal costs are almost never inside the collection fee. Expect the agency's fee, the advocate's fee and court fees to be quoted separately.
- Debtors should pay you, not the agency. Any arrangement where your money passes through an agency's account deserves a hard look.
- "No recovery, no fee" describes one fee, not the whole cost. Ask what is payable when nothing is recovered.
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Three ways collection is priced
A success fee is a percentage of what is actually recovered. It is the usual model for recovering overdue accounts, because the agency is paid when the money arrives.
A monthly fee pays for continuous work on receivables that are not yet bad: a specialist who runs follow-ups, disputes and promises to pay across your ledger every month. It suits a business whose days sales outstanding are drifting, not one with a handful of bad accounts.
Legal costs arise only when a case goes to a court, tribunal or arbitrator: the advocate's fee, court or tribunal fees, and an arbitrator's fee where there is one. They are separate from the collection fee in almost every arrangement.
Many agreements combine them, with a success fee on recovery, expenses such as out-of-town field visits at cost, and legal costs case by case. What matters is that each charge is written down before work starts.
What sets the percentage?
- Age of the debt. The biggest factor. As an invoice ages, disputes harden, documents go missing and the debtor's position weakens, so more work is needed for each rupee recovered. Most agencies price by ageing band.
- Size of the claim. A larger claim usually carries a lower percentage, because the work does not grow in proportion to the amount.
- The documents behind it. A signed purchase order, proof of delivery and a written acknowledgement make a claim cheaper to recover than an invoice alone.
- Where the debtor is. A debtor that needs field visits in another state costs more than one that answers the phone.
- Whether it is disputed. A genuine quality or delivery dispute has to be resolved before the money moves, and that takes time.
- The size of the book. A portfolio of accounts is usually priced differently from a single claim.
What "recovered" should mean
The fee is a percentage of "recovered amounts", so the definition decides what you pay. A fair agreement charges on value you actually receive, not on the amount claimed or a settlement that is never paid. Instalments attract the fee as each one arrives.
Two clauses deserve attention. Direct payments: debtors often pay the creditor directly once an agency is involved, and most agreements charge the fee on those too, because the agency's work produced them. The tail period: a fee on amounts received for a stated period after the engagement ends, so a debtor who pays the day after the agency is stood down is still covered. Both are reasonable if they are written down and time-limited.
Why legal costs are separate
Court fees are set by each state and usually rise with the claim's value. The advocate's fee depends on the forum and how long the matter runs, and an arbitrator's fee on the arbitrator. None of these can be known when the collection fee is agreed, which is why they are quoted case by case. In India an agency that is not a law firm cannot share an advocate's fee, so the advocate should bill you directly. Which route a claim needs, and what each involves, is in business debt recovery options in India, compared.
What to ask before you sign
- Is the fee charged on amounts I receive, or on amounts settled or claimed?
- Do direct payments count, and for how long after the engagement ends?
- What is payable if nothing is recovered: expenses, monthly fees, legal costs?
- Are legal costs quoted separately, in writing, before anything is filed?
- Does any money pass through your account? It should not.
- What happens to open accounts if I cancel?
- Is anything guaranteed? A guaranteed recovery or timeline is a warning sign.
The headline promise in this market is "no recovery, no fee". What it leaves out is set out in "No recovery, no fee": what the fee hides.
How Kenstone Capital prices its work
Each of our three stages has its own model. Manage, the DSO Reduction Programme, is a fixed monthly fee for each deployed specialist. Collect is a success fee: a percentage of amounts actually received, set by the ageing band of each claim when it is submitted, including direct payments and an agreed tail period. Enforce is priced case by case in three separate lines: our coordination fee, the independent advocate's fee and court fees at cost, estimated in writing before anything is filed.
We do not publish rates, because they depend on the book. They are set in a Commercial Schedule after we have assessed your claims, and the first conversation is free. Counterparties pay you directly; Kenstone Capital never receives, holds or pools money. The full terms are in our Fees, Cancellation and Refund Policy.
Sources and regulation
| Instrument | What it does | Source |
|---|---|---|
| Kenstone Capital — Fees, Cancellation and Refund Policy | Our three fee models; when a success fee is earned; direct payments; tail period | kenstonecapital.in |
| Bar Council of India Rules — Part VI, Chapter II | Advocates may not share fees with persons who are not advocates | barcouncilofindia.org |
| State court-fees Acts | Court fees set by each state, usually by the value of the claim | State legislation |
| MSMED Act, 2006 — Section 16 | Statutory interest on delayed payments to micro and small suppliers | msme.gov.in |
This guide describes how B2B collection is commonly priced in India; individual agreements differ. It is not legal or financial advice.
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