Client Connection

Client Connection

Monday, September 8, 2014

Talking the Talk, Walking the Walk

If you can "talk the talk" about accounts receivable, that will help you "walk the walk" to ensure payment.

The famous management consultant, Peter Drucker, once said: “The most important thing in communication is hearing what isn’t said.”  In A/R management for law firms, many collection problems are a result of not knowing why receivables have not been paid, only to try too late to resolve payment problems that could have been avoided. Firm leadership has ultimate responsibility for collections, but to do their job, they need to know all pertinent and meaningful information; armed with that information, they can take the necessary action to ensure the firm is enhancing its revenue as much as possible.

As we all know, “managing” accounts receivable is critical to cash flow management. However, just as important to the success of a firm's A/R program is devising appropriate methods to understand why clients have not paid, determining if and when payment will be made and discussing the right protocol to stay on top of collection efforts to ensure progress is being made. 

Consistently discussing collection efforts and A/R issues may not lead to all accounts being collected timely. After all, law firm receivables are filled with complicated transactions, relationships and client engagements that do not lend themselves to a black-and-white collection time frame. But information is a valuable commodity when it prompts questions about what has to be done to move the ball forward. The lack of information can be a detriment when firms want to know why payments have not been made. Too often, firms wait too long to follow up with accounts and discover either that there is nothing they can do to collect those accounts or that they must make a drastic discount just to salvage something.

Even if you think your firm is doing a good job communicating about collections efforts, select some older accounts to learn what progress is being made. It may make you speak up!

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