How to Build a High-Performing Collections Team From Scratch — Structure, Roles, and Hiring Order

Late payments are not a minor inconvenience for UK businesses — they are a genuine operational crisis. According to a 2025 survey by Coface, 90% of UK companies experienced late payments in 2025, with smaller firms bearing the heaviest burden. A 2025 QuickBooks report found that 62% of UK small businesses are currently owed an average of £21,400 in unpaid invoices, with over half of those businesses reporting invoices more than 30 days overdue.

The UK government has confirmed that late payments cost the economy £11 billion every year, with an estimated 38 businesses closing every single day as a direct result of not being paid on time. Against this backdrop, knowing how to build a collections team — and build it properly — is no longer optional. It is a commercial survival skill.

This blog walks you through everything you need: the right collections department structure, the key roles to recruit, and the exact hiring order that sets your team up for long-term performance.

Why Getting Your Collections Team Structure Right Matters

Most businesses make the same mistake — they hire reactively. A few invoices go unpaid, cash flow tightens, and somebody is given the job of chasing debtors on top of their existing workload. This approach virtually guarantees poor recovery outcomes, inconsistent compliance, and eventual staff burnout.

Building a debt recovery team from scratch with a clear structure changes everything. Research by the Small Business Commissioner found that business owners are spending an average of 86 hours per year chasing unpaid debt — time that should be directed at growth. A dedicated, properly structured collections function reclaims that time and converts it into recovered revenue.

Effective collections teams are data-driven, customer-centric, and built around clearly defined roles — with professionals trained specifically for the responsibilities they carry. That does not happen by accident. It happens by design.

The Foundation: Understanding What Your Collections Department Needs to Do

Before you recruit a single person, you need to be clear on what your collections function is responsible for. A well-structured collections department typically manages three distinct phases:

Pre-delinquency and credit control

 preventing late payments before they arise through proactive account management, payment term enforcement, and early arrears identification.

contacting customers with overdue accounts, negotiating repayment, and managing payment plans.

managing accounts that have progressed beyond standard collection activity, including litigation preparation, enforcement, and write-off decisions.

Each phase requires different skills, different personalities, and in many cases, different people. Attempting to handle all three with one generalist creates a team that does none of them particularly well.

The Core Collections Team Roles UK Businesses Need

Collections agencies typically follow an escalation method based on the number of days an account has been delinquent and the amount owed — and your team structure should mirror this escalation logic. Here are the core roles that form a high-performing collections department:

Credit Controller

This is the first hire most businesses need. A credit controller manages accounts receivable, monitors payment terms, sends reminders, and ensures your invoicing process is airtight before any debt becomes overdue. Hiring here is entirely preventative — and the most cost-effective investment you can make. Think of the credit controller as the goalkeeper; it is far better to stop the problem at source than to chase it down later.

Once invoices become overdue and automated reminders have failed to produce payment, you need a skilled agent who can make personal contact, build rapport, negotiate repayment, and bring accounts back into order. This role requires a very specific combination of resilience, communication ability, and empathy — particularly given the FCA’s Consumer Duty expectations around vulnerable customer handling.

For accounts that are significantly overdue and require more complex negotiation — structured repayment plans, partial settlement arrangements, or escalated contact strategies — a recovery specialist steps in. This is a more senior collections role that demands regulatory knowledge, commercial judgement, and strong negotiation skills.

As your team grows beyond two or three people, performance management becomes a role in itself. A collections manager sets targets, monitors recovery rates, manages team workflow, coaches agents, and is accountable for overall department performance. This hire is critical to prevent your team from becoming a group of individuals working in parallel rather than a coordinated unit.

Consumer Duty remains one of the key FCA priorities under its 2025–2030 strategy, with the regulator requiring firms to actively put customer outcomes at the heart of operations. Every collections team operating within a regulated environment needs someone who owns compliance responsibility — whether that is a dedicated hire or a senior professional with embedded compliance accountability. The FCA has consistently found that firms must strengthen their systems for identifying and supporting vulnerable customers, ensuring their needs are addressed at every stage of the collections process.

For larger organisations or those with significant debt portfolios, a Head of Recoveries provides strategic oversight. This person is responsible for departmental strategy, regulatory reporting, senior stakeholder management, and long-term performance planning. This is not an early hire — but it is the hire that transforms a functional collections team into a strategic business asset.

The Debt Recovery Hiring Order — Who to Recruit First

This is where many businesses get it wrong. They hire from the top down or fill the most visible gap rather than building from the foundations. Here is the recommended debt recovery hiring order based on business stage:s.

Stage 1 — Early-Stage Business (0–£2m turnover)

Start with a Credit Controller. Prevention is cheaper than cure, and a credit controller who manages your invoicing process rigorously will reduce the volume of debt that requires active chasing. If your bad debt is already accumulating, hire a Debt Collection Agent alongside.

Add a Debt Collection Agent (or expand the team to two) and introduce a part-time or full-time Recoveries Specialist for your most complex accounts. Compliance accountability should be clearly assigned at this stage.

Appoint a Collections Manager to lead the team, introduce a structured compliance function, and begin planning for a Head of Recoveries to take strategic ownership of the department. At this level, your collections function should be reporting into senior leadership and measured against formal KPIs.

The Compliance Layer You Cannot Ignore in 2026

Building a debt recovery team in 2026 means building with compliance baked in from day one. The FCA has confirmed that embedding Consumer Duty across sectors is critical, as the regulator intends to rely on the Duty as its primary conduct tool rather than introduce additional prescriptive rules. 

For collections teams, this means every hire needs to understand the regulatory environment they are operating in. Agents must know how to identify vulnerability, how to handle sensitive financial conversations appropriately, and how to document customer interactions to demonstrate good outcomes. This is not a nice-to-have — it is a hiring requirement.

By 2026, the regulatory conversation around Consumer Duty has moved from implementation to evidence — organisations must now demonstrate that their people are actively delivering good customer outcomes, not merely following documented processes.

Key Performance Metrics for a Newly Built Collections Team

Once your team is in place, performance needs to be measured from the start. The core metrics for any collections department include:

Recovery Rate

the percentage of outstanding debt successfully recovered within a defined period. This is your headline performance indicator.

 the average number of days it takes to collect payment after a sale. A well-structured team should be actively working to reduce this.

 the proportion of contacted customers who commit to payment. This reflects agent skill and contact strategy quality.

how often agents are reaching the correct decision-maker or account holder. Low rates indicate process or data quality issues.

the percentage of payment commitments that are not fulfilled. High rates indicate issues with negotiation quality or debtor assessment.

Building the Team — Practical Next Steps

Knowing how to structure a collections team is one thing. Finding the right people to fill those roles is another challenge entirely. The most common problem businesses face when building a debt recovery team from scratch is that the best professionals in this space are rarely actively job hunting. High-performing collectors, experienced recoveries specialists, and effective collections managers tend to be busy, well-compensated, and loyal to employers who treat them well.

That is why a significant proportion of specialist collections hiring happens through direct approaches, industry networks, and headhunting — not through standard job advertising. Attracting and retaining the best collections professionals requires ongoing monitoring of competence, performance, and compliance — beginning with how you identify and select candidates in the first place.

Getting the first two or three hires right is critical. The wrong people in foundational roles will cost far more in bad debt, compliance risk, and staff turnover than the investment in finding the right ones.

The UK’s late payment environment is not improving on its own. The government’s own data confirms that late payments cost the UK economy £11 billion every year, and that 38 businesses close every single day because they are not paid on time. For businesses serious about protecting their cash flow and their future, a well-structured, professionally hired collections team is one of the most important operational investments available.

Start with prevention. Build for compliance. Hire in the right order. And when you are ready to find the people who will actually make this work, make sure you are working with someone who understands this industry as well as you do.