Time is not on your side when you have unpaid receivables ageing and you don’t have a strategy for how to begin. However, you know it needs to be done. Henry Ford once said, “Don’t find a fault, find a remedy.” While the year is still relatively young, we recommend you take these three steps to get started:
1. Take the lead to determine how well your firm is doing with its A/R management – At most law firms, everyone shares the responsibility for accounts receivable management – which of course, means that no one really takes full responsibility. Take the time to assess how things have been done at your firm and ask these questions.
- How are we doing with managing our A/R?
- What do we need to be doing differently?
- Do we have the right resources to make improvements?
2. Next, understand what is going on in your firm – Have you allowed your clients too much leeway to pay at their own discretion? Does the culture of your firm permit attorneys to go it alone in deciding how they manage their receivables (or, in too many cases, NOT manage their receivables)? Do you have processes and administrative A/R management functions, but neglect to measure if they are succeeding in accomplishing payment?
3. As a result of your observations, educate the leadership of the firm where improvements can be made – Leadership can sometimes be at a disadvantage when trying to determine how to improve A/R management and collections since they are flying at 40,000 feet, overseeing the direction and vision of the firm and don’t have their ear to the ground assessing why the firm is under-achieving in this area. Provide them with insight on receivables the firm is not collecting and best practice solutions to improve collection results, especially with ageing, difficult-to-collect A/R.
Law firms that address and actively work at getting results from their collection efforts early in the year will see a real payoff at the end. For those that do not – it will be a long year.
If you are attending the ALA 2019 Annual Conference & Expo in Grapevine, Texas this month, please stop by Booth #910 to say hello. We would be happy to answer any questions you may have about your firm’s accounts receivable management. And please feel free to visit our web-site at https://clientci.com.