A traditional collection agency relies on calls and reminders and hands disputes to a lawyer separately. FundRaksha puts a dedicated advocate on every case from day one, sends a legal notice within 24 hours, negotiates and files where needed, and charges 30% only on recovery. It also adds prevention (Trust) and automated reminders (Collect, 1%).
The traditional model and where it stalls
The traditional model works well when the debtor has simply forgotten or is disorganised. A call or two and the money arrives. Where it stalls is the case every supplier actually worries about: a commercial buyer who has decided to delay. Calls do not change that buyer's calculation, and when the agency finally refers the file to a lawyer, weeks have passed, a new fee is due, and the lawyer starts from scratch.
Under a cheque bounce, those weeks can be fatal: NI Act Section 138 requires the notice within 30 days of the return memo.
Point by point
| Traditional collection agency | FundRaksha | |
|---|---|---|
| Who handles your file | Callers; lawyer only on referral | Dedicated enrolled advocate from day one |
| First formal step | Reminder calls and letters | Legal notice within 24 hours |
| Legal grounds cited | Rarely | MSMED Act interest, Section 138, GST ITC reversal, Section 43B(h) as they apply |
| Filing | Separate lawyer, separate fee | Same advocate; Samadhaan, Section 138, summary suit, arbitration |
| Fee | Often retainer or upfront plus commission | 30% on recovery only |
| Prevention and reminders | Not offered | Trust credit checks; Collect reminders and mandates |
| Your visibility | Periodic calls | Shared record of every notice, delivery proof and filing |
The pressure points FundRaksha uses
A traditional agency has persistence. FundRaksha has persistence plus the law. In a notice, the advocate sets out what the buyer stands to lose by not paying:
- MSMED Act: for a registered micro or small supplier, payment is due within 45 days at most, after which compound interest at three times the RBI bank rate, with monthly rests, runs. See the MSME interest calculator.
- Income-tax Section 43B(h): a buyer cannot deduct amounts owed to micro and small suppliers until paid within the MSMED time limit.
- GST: input tax credit must be reversed if the supplier is not paid within 180 days.
- Appeal deposit: a buyer challenging a Facilitation Council award must first deposit 75% of it.
Where a traditional agency may still fit
If your receivables are high-volume, low-value and mostly just late, you need consistent reminders more than legal action. FundRaksha Collect covers that at 1% of collections, and passes only the stubborn files to Legal. If you already use a calling agency for that layer and are happy with it, there is no reason to change it. Bring us the files it cannot close.
See the difference on one file
Pick the invoice that has been unpaid longest and bring it to a free consultation. You will get an honest view of recoverability, route and timeline. If you proceed, the notice goes out within 24 hours and you pay 30% only on what comes in. For a structured comparison of any provider, use how to choose a debt collection agency. Service detail: B2B debt collection.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.