Based on over 20 years of experience of accounts receivable management for the legal profession, we know that it is critical that law firms institute regular, steady, professional follow-up of unpaid bills to secure dates of when payment can be expected. This will help guide future follow-up to increase timely payments and decrease ageing, uncollectable receivables.
By showing clients that your firm is regularly contacting them and monitoring their payment status, they will learn that you are well-aware of their bills and that you expect payment.
At the beginning of the year, frequent questions we hear include:
How do we make our collection efforts a priority throughout the year (instead of waiting until the last couple of months)?
Stop tolerating "good clients" who don't pay their bills. Although waiting until year-end may work for some institutional clients, many clients require effort throughout the year. Be realistic about whether the firm is underachieving in its collections goals and has developed bad collection habits.
How should we evaluate our firm's accounts receivable management needs and strategy to ensure we are making progress?
Ask yourselves and the leadership around you – are we doing the right job, or do our processes, policies and procedures exist only on paper? All firms should take the time and effort to evaluate if they have A/R management best practices in place. The key questions to ask are:
- Do we know how the attorneys are managing their A/R and if they are spending enough time on their collection efforts? And, realistically, are they willing to make changes?
- Do we have the right administrative staff in place and are they doing the work that can be measured of how many dollars they are actually collecting, including the older, difficult account, versus time spent on administrative duties?
- Do we have meaningful reports and information to help the leadership of the firm understand how well the firm is managing its A/R and decide on what changes need to be made?
- Is the firm regularly collecting and reducing older A/R well over120 days past due?
Help your firm get off to the right start in 2017!
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