This big question is – will those ageing receivables that are on your A/R reports now continue to be there in 2020?
As Client Connection has noted before, the business environment has evolved: mindsets have changed, and so have business practices. Because law firms are doing business in a different world, they also need to ensure timely payment and/or address payment issues. Past collections experiences may be worth considering, but in these changing times, they may not be wholly useful as a guide.
Ask these four questions about what you did in the past -- and what you may need to change this year:
- What role should firm leadership play at year-end? Firm leaders need to not only tell the attorneys to address collections, they must be diligent in ensuring attorneys are actually making progress. They need to establish clear expectations about what has to be accomplished with collection efforts now and through year-end. Leadership must also provide the right resources to help the attorneys and assess whether the firm has in place the right people, with the right skills, to do the right job.
- What information should we be paying particular attention to during the last two months of the year? Detailed reports should answer key questions: whether accounts are actively being pursued, what the payment status is, who is pursuing collections and what success they are having, why clients are not paying, and what steps are being taken to get them to pay.
- How do we proactively pursue receivables at year-end while respecting the attorneys' concerns about hurting client relationships? Educate your attorneys that many other businesses are contacting their clients for this reason, so it's entirely reasonable for your firm to do the same. Law firms lose clients by doing poor work or failing to deliver client service, not by asking clients to pay their bills.
- How can firms overcome the backlog of older, difficult A/R to be collected by the end of December? Because older receivables require more time and skill, you had better start now. No firm should delude itself into thinking that it is going to be paid unless it proactively pursues older accounts.
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