Client Connection

Client Connection
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Tuesday, February 13, 2018

Start Taking a Strong Position NOW in Managing Accounts Receivable in 2018

All law firms should take a strong position on accounts receivables management and be able to communicate their expectations on collections to the attorneys, knowing that complicated transactions and relationships do not lend themselves to black-and-white procedures. A/R management procedures need to be practical and workable, but there needs to be room for exceptions. Yet these exceptions should be monitored closely and not seen as a way to avoid firm collection policies and rules. Giving too much individual autonomy to the attorneys is often the root of a firm’s A/R problems.

Remember, managing accounts receivable for a law firm is a step-by-step process, which must be monitored closely, whether the economy is up or down.  Beware of certain attitudes that can prevent procedures and rules from working, such as:
  1. Thinking that having an infrastructure in place alone will result in relieving the firm from ensuring that it works.  A strong A/R management infrastructure must be supported by a strong commitment to action and a change in mind-set necessary to address all the issues preventing clients from paying. Whatever the issues are -- attorneys or collection staff not doing their jobs, not working closely with clients to monitor when and if they will pay, or not using the right collection strategy – changes must be made if you want to see results.
  2. Giving the attorneys too much leeway in managing their receivables. Firms have long been inclined to give their attorneys “professional courtesy” to manage their receivables as they see fit.  The traditional culture of forgiveness needs to be replaced with high expectations. We use the term “manage” very loosely because, in far too many instances, the attorneys are not being managed at all.
  3. Not focusing on collection efforts on receivables starting at 60 days past due. Thinking that older receivables dictate when collection problems begin is not true. The reality is that collection problems begin early in the ageing process, but firms often do little to address issues sooner rather than later. Due to the nature of the transaction or the client arrangement, there may be a need for alternative payment arrangements. But do not let these payment exceptions become the rule.

Having a plan is one thing. Putting it into action, monitoring it, and making sure it works is quite another. Learn more on our web-site at http://www.clientci.com.

Monday, January 1, 2018

Accounts Receivable: It's Not Just a Fourth Quarter Thing

Well-managed law firms need to recognize that accounts receivable management is a year-round effort.

Too many law firms continue to think that collections is an easy process; all you have to do is remind clients to pay and they will.  Having recently come through year-end, you KNOW that's not true.

Throughout the year, firms must stop tolerating "good clients" who just don't pay their bills.  Although 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 effort 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.

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 steps that ensure a full commitment to managing your receivables.

Please feel free to contact us to let us know if we can help you. Visit us at: http://www.clientci.com/

Tuesday, December 5, 2017

Steady The Ship Going into Year-End - A Few Last Words Regarding A/R

Happy Holidays! As we all prepare to begin the somewhat frantic job of getting things done by the end of December, we all have our to-do list and only have a certain number of days to accomplish what's on that list. Fortunately, one thing that many of us have learned over the years is how to prioritize. At the top of the to-do list for many law firms is collecting accounts receivable to meet or exceed budget by December 31. With limited time to complete this task, it's important that we focus on certain items over which we have control.

Here are a few tips to help your firm achieve its year-end collection goals:


  • Take the time to meet with those attorneys who may need assistance to determine what help they need getting their accounts collected (I'm sure you know who they are). Don't just drop in -- schedule a meeting in advance (not to last longer than 30 minutes) to go over their A/R and find out how you can give them some hands-on help.
  • Put together a list of clients that are expected to pay by year-end and the exact date of when payments are anticipated. Ensure each attorney receives a regular progress report and alert them if the commitment date has passed without receiving payment so they can make appropriate follow-up contact as December 31 approaches.
  • Provide the attorneys a checklist of items that will help ensure payments are made, such as: verifying clients have copies of all outstanding invoices, determining if client offices will be closed the last week of December (to ensure payments have been processed before closing), providing the attorneys routing instructions if payment is to be sent by wire, or an overnight express mail account number for quick delivery, etc.
  • Just as important, regularly take the time to walk the halls and check in with the attorneys on their progress during the last few weeks. Your visits will remind them of what they have to do.
Best wishes to you and your firm from everyone at Client Connection for an enjoyable holiday season and a prosperous 2018. For more information about us, please visit our web-site; http://www.clientci.com


Thursday, October 5, 2017

Autumn Is Upon Us. Do You Feel That Chill in the Air?

Are you ready for the fourth quarter accounts receivable collection effort?  See for yourself by answering these questions:


  1. What are the ways to make sure your firm gets paid for the work it does?
    (a) Identify attorneys who have difficulty collecting their receivables throughout the year and give them the help they need.
    (b) Generate a list of clients that have historically paid their bills during the last 30 days of the year.
    (c) Don't depend too much on historical patterns of bill collection.
    (d) All of the above.
  2. How do we get a jump in making A/R management and collection efforts a priority throughout the year instead of waiting until the last quarter?
    (a) Give your attorneys the individual autonomy to collect their A/R.  They will eventually make it a priority.
    (b) Be realistic about whether the firm is underachieving in its collection efforts and goals and if the firm has developed bad A/R management habits.
    (c) Focus on clients that pay timely and avoid older accounts because they take too much time
    (d) Keep sending clients reminder statements and letters.
  3. There are a number of reasons why clients do not pay their bills on time.  Which is NOT one of them?
    (a) The attorneys don't send the bills in a timely fashion. The clients figure that, if the attorneys can't send the bills in a timely way, they don't need to pay in a timely way.
    (b) The client experiences "sticker shock" and is surprised by the size of the bill.
    (c) They can't find a stamp.
    (d) The client is experiencing cash flow problems.

Answers: 
1.   D
2.   B
3.   C

Would you like to learn more? Please visit our web-site at http://www.clientci.com/

Friday, September 1, 2017

Do You Know How to Improve A/R Management in Your Firm?

Take this quiz.  It will give you some insight on how well your firm is dealing with its accounts receivables.
(1) ______ and ______ follow-up efforts are the key to making progress with A/R over 90 days.
(2) Informative A/R reports need to provide firm leadership accurate information that shows collection activity is ______ on each account.
(3) If administrative stafff are assigned or hired to help with collection efforts, determine how many actual ______ they are collecting, especially the ______ accounts.
(4) Law firms lose clients by doing ______ work or ______ client service -- not by asking clients to pay their bills.


Answers:
(1) Dedicated and consistent efforts are needed on accounts over 90 days. Mistakenly firms tend to focus their efforts on those clients that pay timely and avoid working with older accounts because they take time and are often not pleasant to deal with.
(2) Reports that help a firm understand collection activity is making progress should include information on whether accounts are being actively pursued, what the payment status is, who is pursuing collections and what success they are having, why clients are not paying, and what steps need to be taken to get them to pay.
(3) Staff should be evaluated on actual dollars they are collecting and the number of older accounts they are handling, along with their knowledge of how best to pursue collection efforts. Staff should not be evaluated on such things as how well they:  send copies of bills to paying clients, multi-task other accounting duties, or provide attorneys with A/R reports.
(4) Poor work and failing to deliver client service are factors that directly contribute to clients not paying. However, managing receivables by directly contacting clients about unpaid bills will not hurt relationships -- as long as the communication is handled professionally.

Learn more on our web-site at http://www.clientci.com

Friday, August 11, 2017

Check Your Accounts Receivable Management IQ

Answer the following questions "true" or "false."

(1) If you have a bill that goes past 90 days unpaid, you are seeing the first sign of potential payment problems.

(2) Attorneys are the only people in your law firm who should have responsibility for collecting receivables.

(3) Many attorneys fear that their clients consider it unprofessional to ask to be paid for their services.

(4) Clients will pay once you remind them.

ANSWERS:

(1) False. Actually, the first sign occurs after just 30 days when clients have not paid.

(2) False. It's true that attorneys know about their client relationships, but a growing number of firms are looking to professionals who have the appropriate expertise, experience, communication skills and professionalism to maintain and enhance strong client relationships while getting bills paid.

(3) True. It's true that some attorneys feel that way, but in today's world, clients tend to be very receptive to appropriate contact. The business environment has evolved and law firms must make adjustments accordingly to routinely communicate with clients to ensure timely payment or resolve problem issues.

(4) False. Frequently, they do not. Make no mistake: collections is a process and must be done timely, diligently and promptly in order to achieve the desired results.

Learn more on our web-site at: http://www.clientci.com/

Tuesday, July 18, 2017

It Doesn't Pay to Keep Quiet About Your Accounts Receivable

Renowned business management consultant Peter Drucker once said, "The most important thing about communication is hearing what isn't said." So if ageing receivables are not being paid -- why not?!?!?  Law firms should be hearing this silence loud and clear.

In fact, you can expect this quiet to become louder as law firms get closer to year-end.  Compoundng this problem is clever clients who use the silence to their advantage -- by paying slowly or not at all.

Attorneys hold paramount their clients' interests, but they often don't give them the same attention by talking with them about expecting payment at a certain time. Yes, there are legitimate reasons that prevent timely payment, including complicated transactions, equally complex business relationships and disputed resolutions, but these should be the exception, not the rule. Personal, one-to-one communication efforts are essential to getting paid:

  • Clients reason that if the firm has waited months to try to collect unpaid bills, they can wait to pay the firm. The longer a firm waits to talk with their clients about unpaid bills, savvy clients realize, the more likely the bills will end up being discounted or forgotten altogether.
  • Don't underestimate the need to learn why clients have yet to pay their bills. For example: cash flow problems, "sticker shock" on the size of the bill, and uncertainty about what services were provided are prime reasons why open communication is essential to getting paid.
  • Attorneys may lose clients by doing poor work or by failing to deliver client service -- NOT by asking clients to pay their bills.
  • Most clients will not call if they have a problem with a bill.  Many are uncomfortable talking about money. It is the attorney's responsibility to initiate the call.
Would you like to learn more. Please visit our web-site at: http://www.clientci.com