We are now halfway between the relief of getting through last year's end-of-year collections frenzy and the start of this year's! It does not have to be that way.
Evaluating your firm's accounts receivable management collection efforts six months into the year gives you the opportunity to see what is and is not working, so you can make improvements. Developing strong, effective techniques to deal with ageing accounts can be a major factor in helping your firm meet its 2014 financial goals. Don't make the mistake of assuming receivables will be paid without having the right components in place and ensuring those components are getting the job done.
As a start, make sure you are addressing the real issues. Take a step back to assess your A/R objectives and policies, procedures and personnel you are using to achieve your objectives. Be realistic about whether the job is getting done and look to make changes as needed. Accounts receivable age rapidly unless you keep your eye on the ball and put in processes that get the job done in collecting your receivables timely.
As we head into true summer, we hope you do allow yourself a little time to stop and smell the roses -- or whatever you like to do to enjoy the warm months. Get to know us better on our web-site at http://www.clientci.com/
Client Connection
www.clientci.com
Tuesday, June 24, 2014
Saturday, May 17, 2014
How Do You Respond When Someone Pops the Big Question?
Five months into 2014, you may be getting asked -- "How are we doing with collections?" When faced with this question, you may feel compelled to provide a detailed, numbers-driven answer, with benchmarks, percentages, etc. This kind of financial response may be useful, but there may be more important indicators that require you to look behind the numbers to give you and your leadership a clearer picture of how well the firm's A/R management processes and procedures are working.
Most firms have gotten used to looking at an abundance of financial information and ageing reports to evaluate their progress in managing receivables. Although some of this information is valuable, many reports do not show when payment can be expected. Law firms tends to lose sight of the numerous reasons clients have not paid. This is often coupled with a failure to create the right reports, ones that measure the progress and evaluate the efforts of the lawyers and staff. At minimum, you need to know if an account is actively being pursued, what the payment status is, who is pursuing the collection efforts and whether they are getting results, why clients are not paying, and what needs to be done to get them to pay. Categorize the receivables to determine who is handling the collection efforts, when you can expect payment, whether they are problematic and how good the chances are that you will get paid (and whether particular receivables are simply not collectible).
The person asking the question about collections is most likely the managing partner or another senior attorney who oversees the firm's progress. It is important you direct their attention to situations where efforts are falling short, so they can help get collections back on track. We invite you to learn more on our web-site http://www.clientci.com
If you are going to the ALA conference in Toronto, May 17-May 21, stop by to see us at Booth #713. I would enjoy saying hello.
Best Regards,
Jake
Most firms have gotten used to looking at an abundance of financial information and ageing reports to evaluate their progress in managing receivables. Although some of this information is valuable, many reports do not show when payment can be expected. Law firms tends to lose sight of the numerous reasons clients have not paid. This is often coupled with a failure to create the right reports, ones that measure the progress and evaluate the efforts of the lawyers and staff. At minimum, you need to know if an account is actively being pursued, what the payment status is, who is pursuing the collection efforts and whether they are getting results, why clients are not paying, and what needs to be done to get them to pay. Categorize the receivables to determine who is handling the collection efforts, when you can expect payment, whether they are problematic and how good the chances are that you will get paid (and whether particular receivables are simply not collectible).
The person asking the question about collections is most likely the managing partner or another senior attorney who oversees the firm's progress. It is important you direct their attention to situations where efforts are falling short, so they can help get collections back on track. We invite you to learn more on our web-site http://www.clientci.com
If you are going to the ALA conference in Toronto, May 17-May 21, stop by to see us at Booth #713. I would enjoy saying hello.
Best Regards,
Jake
Wednesday, April 23, 2014
Get Back on Course: Manage Your Firm's Receivables and Stop Running in Different Directions
We do know why we have A/R management system and collection efforts -- to get results. Why would we think otherwise? We manage A/R to get paid.
Winston Churchill once said, "However beautiful the strategy, you should occasionally look at the results." Yet while many law firms, in theory, want and try to have a results-oriented A/R management structure, they are often working with a system that is moving in all different directions. It is like trying to herd a bunch of cats. Between attorneys doing what they want to do, clients paying at their leisure (if at all) and collection staff not being proactive with their efforts, many law firms are left with a growing backlog of receivables and no idea how to deal with them. More troubling, though, is that they have a false sense of security; they believe that their collection efforts are working just fine.
To help get your A/R management efforts back on track, here are a few tips to remember:
1. Start by understanding why your receivables have aged -- Yes, you do have a collections problem with your older A/R, but you had it very early -- perhaps as soon as you sent out the first bill. The firm was just not proactive with its collection efforts early in the ageing process.
2. Stop making the exception the norm -- Many A/R systems for law firms break down because policies and procedures are created for attorneys to follow. But policies exist only on paper. Too many exceptions are given, so rules are broken and there is little enforcement.
3. Make your collection efforts proactive instead of reactive -- Many firms will wait for clients to contact them about questions regarding a bill before they inquire about the payment status. If clients don't contact the firm, the firm believes -- mistakenly -- that there is no problem and the client will pay. Firms give way too much professional courtesy.
Learn more by visiting our web-site at http://www.clientci.com.
Winston Churchill once said, "However beautiful the strategy, you should occasionally look at the results." Yet while many law firms, in theory, want and try to have a results-oriented A/R management structure, they are often working with a system that is moving in all different directions. It is like trying to herd a bunch of cats. Between attorneys doing what they want to do, clients paying at their leisure (if at all) and collection staff not being proactive with their efforts, many law firms are left with a growing backlog of receivables and no idea how to deal with them. More troubling, though, is that they have a false sense of security; they believe that their collection efforts are working just fine.
To help get your A/R management efforts back on track, here are a few tips to remember:
1. Start by understanding why your receivables have aged -- Yes, you do have a collections problem with your older A/R, but you had it very early -- perhaps as soon as you sent out the first bill. The firm was just not proactive with its collection efforts early in the ageing process.
2. Stop making the exception the norm -- Many A/R systems for law firms break down because policies and procedures are created for attorneys to follow. But policies exist only on paper. Too many exceptions are given, so rules are broken and there is little enforcement.
3. Make your collection efforts proactive instead of reactive -- Many firms will wait for clients to contact them about questions regarding a bill before they inquire about the payment status. If clients don't contact the firm, the firm believes -- mistakenly -- that there is no problem and the client will pay. Firms give way too much professional courtesy.
Learn more by visiting our web-site at http://www.clientci.com.
Wednesday, April 2, 2014
Come On In. The Water's Fine!
When it comes to managing accounts receivables, if your firm is like many that we know, it has one foot in and one foot out of the water. It has not wholly committed to jumping in. You may be cutting corners, without fully embracing all the accounts receivable management efforts that you need to.
Too often, firms get to December 31 and breathe a sigh of relief that they made it to year-end safely. Yes, firms may have met budget, but too often they left too many unpaid receivables, which will continue to age and become increasingly difficult to collect. They choose to ignore the amount that they have failed to collect by turning a blind eye during the year to how they could perform better.
The first part of the year is critical for evaluating how your firm can do better to diligently manage and collect its receivables.
While the year is still relatively young, take five steps that ensure a full commitment to managing your receivables – and will start showing results quickly on your bottom line.
1. Limit the autonomy you give individual attorneys
2. Build an accounts receivable management program, from the time WIP is billed through when invoices are paid in full
3. Recognize that the effort is year-round
4. Make sure your clients know that it is you who are in control
5. Don't count on the past to predict the future – While past performance should not be ignored, it may be less useful for purposes of ensuring firms will have a successful year unless the right changes are made with A/R management.
Client Connection assists law firms of all sizes throughout the United States by furnishing accounts receivable management services, developing practical receivable programs, training law firm staff in effective collection methods and executive placement of professional collections managers. Learn more by visiting our web-site at http://www.clientci.com.
Too often, firms get to December 31 and breathe a sigh of relief that they made it to year-end safely. Yes, firms may have met budget, but too often they left too many unpaid receivables, which will continue to age and become increasingly difficult to collect. They choose to ignore the amount that they have failed to collect by turning a blind eye during the year to how they could perform better.
The first part of the year is critical for evaluating how your firm can do better to diligently manage and collect its receivables.
While the year is still relatively young, take five steps that ensure a full commitment to managing your receivables – and will start showing results quickly on your bottom line.
1. Limit the autonomy you give individual attorneys
2. Build an accounts receivable management program, from the time WIP is billed through when invoices are paid in full
3. Recognize that the effort is year-round
4. Make sure your clients know that it is you who are in control
5. Don't count on the past to predict the future – While past performance should not be ignored, it may be less useful for purposes of ensuring firms will have a successful year unless the right changes are made with A/R management.
Client Connection assists law firms of all sizes throughout the United States by furnishing accounts receivable management services, developing practical receivable programs, training law firm staff in effective collection methods and executive placement of professional collections managers. Learn more by visiting our web-site at http://www.clientci.com.
Thursday, February 27, 2014
One Foot In and One Foot Out: Why Your Law Firm Needs to Jump Into the Water With Its A/R Management Strategy
When it comes to managing accounts receivables, if your firm is like many that we know, it has one foot in and one foot out of the water. It has not wholly committed to jumping in. You may be cutting corners, without fully embracing all the accounts receivable management efforts that you need to. Too often, firms get to December 31 and rationalize that they made it to year-end safely. Yes, firms may have met budget, but too often they left too many unpaid receivables, which will continue to age and become increasingly difficult to collect. They choose to ignore the amount that they have failed to collect by turning a blind eye during the year to how they could perform better. The first part of the year is critical for evaluating how your firm can do better to diligently manage and collect its receivables. While the year is still relatively young, we recommend that you take the five steps that ensure a full commitment to managing your receivables – and will start showing results quickly on your bottom line.
1. Understand and Limit the Complete Autonomy You Give Individual Attorneys
For all sorts of reasons – good and bad – firms continue to give their attorneys too much control of collecting receivables from their clients. This is often done without ensuring the attorneys are making progress and spending the necessary time to collect their A/R. Identify your problem attorneys, your problem practice groups and your problem clients – and take action. Take the time to meet with these attorneys on a regular basis and ask them to tell you specifically when bills can be expected to be paid. If they do not meet those dates or don’t have a good explanation, make sure others in the firm are available to help. Attorneys are given too much leeway in dealing with their clients during the first 11 months of the year, only to have their feet held to the fire during the year-end sprint. The traditional culture of forgiveness needs to be replaced with a culture of high expectations to increase revenue through better collection efforts throughout the year. If attorneys cannot make the time to monitor payment status, the firm must have collections professionals to help monitor it for them. The attorneys are vital to assess the clients’ ability and inclination to pay. They do not necessarily have to be the ones getting them to do so.
2. Connect the Dots, Manage Each Step and Believe in The Process
Stop throwing spaghetti against the wall to see what sticks. Take appropriate steps to build an accounts receivable management program, from the time WIP is billed through when invoices are paid in full. Manage it throughout the course of the year, and don’t wait until the last quarter – or, even worse, the last month – of the year to pay attention. Too often, firms want the results of a strong accounts receivable management program, without putting in the time and effort needed to make it happen. There is no doubt that firms want to collect their receivables timely and want to prevent their receivables from aging out. But they need to recognize that the collection process is long and, sometimes, tedious – and requires daily attention. There needs to be a clear plan of attack, clear assignment of responsibilities and clear expectations and ramifications if those involved in the process do not take ownership of their responsibilities.
3. Recognize That the Effort is Year-Round
Too many law firms continue to think collections is an easy process; all you have to do is remind clients to pay and they will. Throughout the year, firms must stop tolerating “good clients” who just don’t pay their bills. Although waiting until year-end may work for some institutional clients, many institutional and non-institutional clients require much more effort year-round. Be realistic about whether the firm is underachieving in its collections goals and efforts and if the firm has developed bad collection habits. Taking a hard look at how the firm and lawyers are underachieving with A/R management can often put the firm on the right path to improving cash flow with the right collection efforts.
4. Take Control Away from Your Clients
Do not give your clients the opportunity to dictate the terms of payment. From the start of the relationship, make clear your clients know what to expect from you – and what you expect in return. Let them know that you are open to hearing any questions or concerns they may have, but that if they expect prompt service from you, you expect prompt payment from them.
5. Don’t Count on the Past to Predict the Future
While past performance should not be ignored, it may be less useful for purposes of ensuring firms will have a successful year unless the right changes are made with A/R management. If a firm has not addressed its collection issues and is unhappy with the results it is getting, it is time to try something different. Remember the definition of insanity: making the same mistake over and over, hoping for a better result.
If your firm has created an accounts receivable management program, take the time to set attainable goals, and evaluate your success in achieving them. Do not allow your collections infrastructure to balloon into an inefficient bureaucracy with lots of committees and attorneys who are focused on issues that do not lead to collections.
Law firms can no longer accept that ageing receivables are simply a part of doing business. Those firms that address and actively work at getting results from their collection efforts will see a real payoff in the end. For those that do not – it will be a long year.
Client Connection assists law firms of all sizes throughout the United States by furnishing accounts receivable management services, developing practical receivable programs, training law firm staff in effective collection methods and executive placement of professional collections managers. Learn more by visiting our web-site at http://www.clientci.com/.
1. Understand and Limit the Complete Autonomy You Give Individual Attorneys
For all sorts of reasons – good and bad – firms continue to give their attorneys too much control of collecting receivables from their clients. This is often done without ensuring the attorneys are making progress and spending the necessary time to collect their A/R. Identify your problem attorneys, your problem practice groups and your problem clients – and take action. Take the time to meet with these attorneys on a regular basis and ask them to tell you specifically when bills can be expected to be paid. If they do not meet those dates or don’t have a good explanation, make sure others in the firm are available to help. Attorneys are given too much leeway in dealing with their clients during the first 11 months of the year, only to have their feet held to the fire during the year-end sprint. The traditional culture of forgiveness needs to be replaced with a culture of high expectations to increase revenue through better collection efforts throughout the year. If attorneys cannot make the time to monitor payment status, the firm must have collections professionals to help monitor it for them. The attorneys are vital to assess the clients’ ability and inclination to pay. They do not necessarily have to be the ones getting them to do so.
2. Connect the Dots, Manage Each Step and Believe in The Process
Stop throwing spaghetti against the wall to see what sticks. Take appropriate steps to build an accounts receivable management program, from the time WIP is billed through when invoices are paid in full. Manage it throughout the course of the year, and don’t wait until the last quarter – or, even worse, the last month – of the year to pay attention. Too often, firms want the results of a strong accounts receivable management program, without putting in the time and effort needed to make it happen. There is no doubt that firms want to collect their receivables timely and want to prevent their receivables from aging out. But they need to recognize that the collection process is long and, sometimes, tedious – and requires daily attention. There needs to be a clear plan of attack, clear assignment of responsibilities and clear expectations and ramifications if those involved in the process do not take ownership of their responsibilities.
3. Recognize That the Effort is Year-Round
Too many law firms continue to think collections is an easy process; all you have to do is remind clients to pay and they will. Throughout the year, firms must stop tolerating “good clients” who just don’t pay their bills. Although waiting until year-end may work for some institutional clients, many institutional and non-institutional clients require much more effort year-round. Be realistic about whether the firm is underachieving in its collections goals and efforts and if the firm has developed bad collection habits. Taking a hard look at how the firm and lawyers are underachieving with A/R management can often put the firm on the right path to improving cash flow with the right collection efforts.
4. Take Control Away from Your Clients
Do not give your clients the opportunity to dictate the terms of payment. From the start of the relationship, make clear your clients know what to expect from you – and what you expect in return. Let them know that you are open to hearing any questions or concerns they may have, but that if they expect prompt service from you, you expect prompt payment from them.
5. Don’t Count on the Past to Predict the Future
While past performance should not be ignored, it may be less useful for purposes of ensuring firms will have a successful year unless the right changes are made with A/R management. If a firm has not addressed its collection issues and is unhappy with the results it is getting, it is time to try something different. Remember the definition of insanity: making the same mistake over and over, hoping for a better result.
If your firm has created an accounts receivable management program, take the time to set attainable goals, and evaluate your success in achieving them. Do not allow your collections infrastructure to balloon into an inefficient bureaucracy with lots of committees and attorneys who are focused on issues that do not lead to collections.
Law firms can no longer accept that ageing receivables are simply a part of doing business. Those firms that address and actively work at getting results from their collection efforts will see a real payoff in the end. For those that do not – it will be a long year.
Client Connection assists law firms of all sizes throughout the United States by furnishing accounts receivable management services, developing practical receivable programs, training law firm staff in effective collection methods and executive placement of professional collections managers. Learn more by visiting our web-site at http://www.clientci.com/.
Wednesday, January 1, 2014
Start Making Plans for A/R Solutions in the First Quarter of 2014
The success of efforts to improve accounts receivable management depends on the ability to change law firms’ attitudes regarding payments and teach them why it is necessary to keep bills from aging too long. This requires overcoming common misconceptions during the first few months of the new year:
Happy New Year from everyone at Client Connection!
Visit our web-site at http://www.clientci.com/
- A/R problems begin when receivables start aging past 90 days – If bills have not been paid within 90 days or without a reasonable explanation from clients, your payment problems have already begun. The longer a law firm waits to collect unpaid bills, the more likely the firm will end up getting paid less – or not at all.
- Lawyers damage their relationships by asking clients to pay their bills – You lose clients by doing poor work or by failing to deliver excellent client service, NOT by asking clients to pay their bills. Contacting clients early in the aging process can actually strengthen relationships.
- Clients will call if they have a problem with a bill – They can, but they won’t, for various reasons: discomfort talking about money, confusion about the bill or reluctance to admit they don’t have the means to pay.
- Sophisticated collection software is the answer to all our collection problems – Software is a terrific tool and can provide meaningful information if a firm has a strong understanding of what reports are needed, but it is only as good as the people using it.
- We have the right reports to help analyze our receivables – Many firms still use reports that offer insufficient or inappropriate information to pursue offenders, whether those offenders are the clients or the attorneys.
Happy New Year from everyone at Client Connection!
Visit our web-site at http://www.clientci.com/
Wednesday, December 4, 2013
You're Almost There!... Just a Few More Reminders to Help Ensure Year-End Payments
With only a few weeks left in 2013, now is the time to ensure all year-end client payment commitments are being firmed up – and everyone at the firm is ready to make those final detailed arrangements to confirm payments by December 31. However, it’s also the time not to assume clients have all the information they need to process, mail and deliver their payments.
Listed below are a few last-minute tips that you should communicate to attorneys and staff:
• Calling clients is the best way to determine payment status. E-mails and letters can be misplaced. They do not have the same sense of urgency as a call.
• Make sure that clients have all outstanding invoices. If the client does not have the invoices, verify who should receive copies and then confirm that they have been received.
• Ask clients what day or week they expect to send payment. This gives the attorney or staff member a date to put on their calendar for follow-up. This is probably the most important step for year-end payment.
• Determine if client offices are closed the last week of the year. This will help you ensure payment is sent before the client stops writing or processing payments.
• Give everyone access to routing instructions if payment is to be sent by wire. Be ready to provide your firm’s overnight account number to clients. Let them send payments by express delivery without having to incur costs. Offer to send a messenger to local clients to pick up a check.
We hope everyone has a successful and rewarding 2013. We look forward to sharing our monthly tips again starting in February, 2014.
Happy Holidays from everyone at Client Connection!
Visit our web-site at http://www.clientci.com/
Listed below are a few last-minute tips that you should communicate to attorneys and staff:
• Calling clients is the best way to determine payment status. E-mails and letters can be misplaced. They do not have the same sense of urgency as a call.
• Make sure that clients have all outstanding invoices. If the client does not have the invoices, verify who should receive copies and then confirm that they have been received.
• Ask clients what day or week they expect to send payment. This gives the attorney or staff member a date to put on their calendar for follow-up. This is probably the most important step for year-end payment.
• Determine if client offices are closed the last week of the year. This will help you ensure payment is sent before the client stops writing or processing payments.
• Give everyone access to routing instructions if payment is to be sent by wire. Be ready to provide your firm’s overnight account number to clients. Let them send payments by express delivery without having to incur costs. Offer to send a messenger to local clients to pick up a check.
We hope everyone has a successful and rewarding 2013. We look forward to sharing our monthly tips again starting in February, 2014.
Happy Holidays from everyone at Client Connection!
Visit our web-site at http://www.clientci.com/
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