When an account is 90-120 days delinquent, after exhausting internal collection efforts.

2. When information suggests serious financial instability on the part of your account. (i.e. market downturns within industry to which you are extending credit, be it furs, toys, or any other.)
3. When the customer continues to demonstrate bad faith by failing to deliver on commitments to clear the outstanding balance.
  As an account grows increasingly delinquent, more pressure is required to obtain the desired payment. However, your personnel's time is often better spent monitoring other borderline accounts, in an effort to ensure that as few of them as possible become delinquent. Placement with a professional collection service, in addition to putting your account on notice that repeated delays in payment will not be tolerated, also serves to free-up your staff for higher priority activity.

Source:  Commercial Collection Agency Section of the Commercial Law League of America