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How to Shorten the Time of your Aging Account Receivables
May 31, 2013 Billing

Get Paid Promptly

Three Invoices All With Paid StampHere are eleven things you can do to get paid promptly and reduce or shorten the time it takes for your aging account receivables get paid.  Most lawyers agree that one measure of law practice success includes getting paid promptly.

The following pointers should help you take control of your aging accounts receivable, and get paid in less than 90 days.

1.       Talk about money with your clients from the beginning.

 In my coaching practice, I’ve found that asking or talking about money with clients is a common fear for lawyers.  Make it one of your law practice habits to bring up the issue of payment during your initial phone call or meeting, as well as during your representation.  Find ways to get over your reluctance or fears of asking for money

2.       Charge reasonable fees.

Advise your potential client up front how much the representation is likely to cost so they can make a decision whether they want to go ahead.  Help the client appreciate why your fees are reasonable based on that has to be done for the client.

3.       Be willing to turn new clients away. 

Don’t take a client who can’t afford you or when your gut tells you, “No.”  Your gut is usually a good judge of clients who aren’t going to pay.

4.       Obtain an advance fee deposit.

 This is simple – if you have money in trust you get paid quickly. This is the ideal way to take control of your accounts receivable and get paid promptly.

5.       Maintain “ever-green” trust accounts. 

Have your clients replenish their trust accounts making sure the amount in trust doesn’t dip below a threshold amount while you are acting for them.

6.       Have good relationships with your clients. 

An often-overlooked tip for getting your accounts paid is to make sure your clients like you.  If they like you, you are more likely to be paid.

7.       Be good at what you do and give your clients great value. 

If you are good at what you do, that will reduce client complaints or rationale for not paying your account.

8.       Render detail invoices that clients don’t question. 

Provide enough detail and explanation such that your client has a clear and appreciative understanding of the work you performed.

9.       Invoice promptly and frequently. 

Clients pay bills sooner if they receive your invoice closer to when you performed the work.  Send your final invoice as soon as the matter is completed when the client still appreciates what you did for them.  Don’t wait until the end of the next billing cycle.

10.   Be proactive when monitoring your receivables. 

Have systems in place that keep you informed of who, how long, and how much is outstanding so that you can follow up with delinquent clients.

11.   Ask your client why you haven’t being paid.

Early in the process find out why a client isn’t paying you. Don’t wait until the account is over 60 or even 40 days old.  When you leave it too long it becomes more difficult to collect.

Regardless of what state your accounts receivable currently are, you can take steps to improve your collections for future matters.  The feeling of satisfaction and success will be worth any uncomfortable feelings you might have to overcome in order to develop the habits that will reduce your aging account receivable problems.

If you would like coaching on how to reduce the age of your account receivables, please contact me , Irene Leonard, Business Lawyer Coach to see how I can assist you.

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