Here 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.
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
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.
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.
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.
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.
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.
If you are good at what you do, that will reduce client complaints or rationale for not paying your account.
Provide enough detail and explanation such that your client has a clear and appreciative understanding of the work you performed.
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.
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.
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.