Managing A/R: So Much More Productive When You Have More Time to Do It

Last week, we issued our new newsletter, "Take Decisive Action Before Summer Breezes Take on Autumn's Chill". In the newsletter, we talk about the need to take advantage of the mid-year mark to set the tone of how your firm will pursue collection efforts before the hectic last quarter begins.

However, many of us have dozens of things on our plate each week that often continually prevent us from tackling projects like improving year-end collection efforts, until the end of the year stares us in the face. Planning can be tough when time is limited and you are confronted with the day-to-day crunch of putting out fires. But it is vital to recognize that collecting A/R can be tougher if we don't take the time to take action before our backs are against the wall.

In addition to tips in the newsletter for the next six months, here are a few more suggestions you should consider:

• Let your attorneys know that consistent communications to clients requesting payment remains solution #1 for getting paid. Clients of law firms have come to expect that nothing will occur if they don't pay timely -- or not at all. For many, paying legal bills does not carry the same urgency as payment to others. Don't give your clients leverage not to pay; it will be as much your fault as theirs for not having tried.
• Urge firm leadership to be decisive and step in to take action. Leadership must stop tolerating attorney responses like -- "I'm working on it" or "I'll look into it". For firms that are mid-size or larger, give serious thought to forming and empowering a committee to help attack problems. For smaller firms, this problem rests squarely on the shoulders of the firm's leaders.
• When managing the backlog of receivables, look first at your oldest receivables and work your way back to those that are newer. It may seem harder (I'm not saying that it's not!), but it will be productive to spend time now with the oldest receivables, moving forward to determine their collectability.

Years ago, there was a telephone commercial with the tagline: "you can pay me now or pay me later". I'm sure many firms would be satisfied with getting paid later if they would actually get paid. That will depend, to a great extent, what actions you choose to take now. Learn more on our web-site at: http://www.clientci.com/

 

Talk to you next month!