It’s August, and the dog days of summer are upon us. No matter how we look at the weather – it’s hot! With this in mind, it’s often a time of the year when you are trying to take those last few days of vacation, while knowing that there are those ongoing projects on your desk waiting for your attention. One of those is addressing the question: how do we improve our collections efforts going into the last few months of the year?
Although it may be too soon to gear up for the year-end “push,” it is a good time to start thinking about how you can help your firm achieve its 2014 collections goals. Because of the changing economic landscape within the legal profession over the past few years and the enhanced billing and payment requirements by clients, it would be beneficial to ensure your firm is up to the year-end task now instead of waiting for December surprises. Here are a few things to think about:
1. Start reviewing now those older, difficult receivables over 120 days and determine how much will be paid by year-end – These receivables will require more time and a much more concerted effort to work through, process and set payment expectations by December 31. Determine who -- if anyone -- is working these accounts, and ensure they are giving them the priority necessary so that they are paid by year end. Help your firm “find money” from these older accounts.
2. Talk with the firm’s leadership to help plan and clarify how the firm wants to approach collections going into the last quarter and the last month. Assess how the firm has done things and consider whether changes need to be made this year to address the backlog of A/R. As you know, planning is so much easier and productive when your firm is not holding everyone's feet to the fire at the eleventh hour. Help the firm stay on course with its collection efforts by having someone who is forward-thinking keep his “eye on the ball” -- with the "ball" being the firm's financial goals -- in the last quarter. And….
3. As a part of these discussions with the firm leadership, highlight where receivable problems stand now and what must be achieved to correct these issues and stay on course over the next few months.
At many law firms, everyone shares the responsibility for accounts receivable management. Which, of course means that no one ultimately has complete responsibility. Help your firm take ownership now to ease the burden over the next few months.
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