One of the worst situation I have ever had the unfortunate pleasure of managing in my professional life is terminating a contract in which a collection agency was granted the right to start collecting clients as early as 90 days.  Although 90 days might have been seen as a reasonable delay . However in the industry i was in 90 days was just a little over the norm of 80 days.The collection agency had sold the idea to my predecessor ,which shall remain nameless, that if they start there work earlier they would be much more successful and the company would be only the better for it. Of course they had sold it by reducing their collection's rate by 50%. The problem is when you look at a soft collection cost as a measure of the cash collected the cost is dismal ,anywhere between 0.5% to 2% of cash collected on average for a small to mid size business. So even though you think your are getting a bargain on your more difficult accounts the reality is the proportion of accounts is much greater on the soft collection side.
Lastly i would add very few collection agency have the type of collectors needed to work on these type of accounts. They tend to see customers as a debtor and look at only one short term goal "collect the money at all cost". This has a long term effect on your business and increases customer churn (departure ). There is a difference between Insourcing, Outsouring and Collection agency  don't make the same costly mistake.