The increasing demands of the legal profession require law firms to develop forward-looking management strategies to solve customer problems. need. While lawyers’ first priority is – and must – – provide quality services, law firms must also establish their own organizations to support their customers' evolving needs, such as opening up international offices, adopting new technologies and developing new ones. Practice areas and other steps.
As a result of this growth, law firms will face high management fees and increasing professional salary requirements. At the same time, those customers with higher expectations will squeeze the company from the other end while reviewing their bills.
During the course of the year, many companies found it difficult to determine how their collection work progressed and how this would affect their financial photographs. Lawyers are allowed to take a relaxed attitude in their collection activities. This is mainly due to the doubts that these lawyers have in their minds, and customers believe that payment is not a priority. Lawyers also do not realize that customers will use their professional relationships. This started a vicious cycle. Lawyers are not wary of allowing customers to make payments, so customers cannot pay quickly. Then, the lawyer is the assistant to the client. and many more.
The business of buying legal services does not apply to such strict purchase and payment rules.
It often involves complex transactions, equally complex business relationships, and controversial solutions that require many hours of work at high billing rates, resulting in high bills to customers. Due to ethical obligations, customers cannot make stoppages sometimes without paying.
The reality is that the problem of internal collection in the legal community is not a problem of financial management
. This is all about effective practice management, which requires lawyers and law firms to proactively manage their accounts receivable
. However, the company's financial staff may be very good, but the lawyers are extremely responsible for the success or failure of the collection work because they are responsible for the relationship with the customer.
When it comes to receivables, law firms are the victims of 10 common mistakes:
1. Counsel believes that accounts receivable do not represent the issue of collection. In fact, if the bill is not paid within 90 days, you will receive the first indication that you may have a problem with the collection – and if the problem is not resolved, they may be further aged and can hardly be recovered. Recovering only 50% of accounts receivable within 120 days, then the probability will drop sharply.
The client believes that if the company has given up a few months to collect unpaid bills, they can wait to pay these bills. They assume and have good reason to believe that they are in a more favorable bargaining position. Smart customers realize that the longer a law firm waits to receive unpaid bills, the more likely it is that the bills will eventually be deducted or cancelled altogether.
2. Law firms are concerned that they will damage customer relationships by requiring customers to pay bills. In fact, law firms lose customers because they are doing bad work or failing to provide customer service, rather than requiring customers to pay bills. As long as specialization, efforts to manage accounts receivable will not harm the relationship. In fact, most customers are very willing to pay bills, although many customers are dealing with cash flow problems. In addition, customers will also become victims of “sticker shocks.” This happens when customers want to receive a certain amount of bills and get rude awakenings when large invoices arrive.
3. Lawyers avoid problems by relying on emails to communicate with defaulting clients.
Postal mail is slower and less efficient than using telephones to resolve overdue issues. The conversation allows you to talk about the bill. In addition, letters and reminder statements are easily misplaced and avoided. If the customer continues to receive the reminder statement after 60 days but has not yet paid, it may result in the payment failing. Even short-term, non-confrontational phone conversations should convey to the customer the urgency of your payment and allow you to quickly learn if there are any questions or concerns – and how to pay the bills.
4. The company believes that accounting and collecting software can cure all these problems. Software can be a great tool for managing receivables, but it is as good as the people who use it. Many laws
companies have policies and procedures in place to better manage their accounts receivable, but many laws do not properly use their software to help implement the new system. Spend time and expertise to fully understand how software can help companies collect work. Law firm staff are often responsible for many daily tasks, which leaves them little time to explore and make full use of the functionality provided by the software.
5. The company soon accepted other payment arrangements. Complex transactions may not apply to normal payment schedules, and if the transaction is not implemented, they may result in confusion of appropriate payments. In addition, risky transactions sometimes fail, leaving unpaid receivables.
6. Lawyers did not realize that they should stop work rather than continue
accumulating unpaid bills. Sometimes the lawyers become so obsessed with their work that they don’t pay
enough attention to unpaid bills. When they realized that customers did not pay, they had invested a lot of extra time. Someone – sometimes the lawyer is not the right person – should supervise the payment, so the work is not far from paying.
7. Receivables management reports do not provide correct information to measure progress. The accounting department is producing a large number of reports on receipts. However, do these reports answer key questions and allow the company to collect data as much as possible? Why customers violate regulations? For this customer, is arrears a habitual behavior? What can companies do to promote short-term and long-term payments?
8. The law firm did not analyze the correct report to manage accounts receivable. Most companies still use
generic financial reports with too much external information to target offenders. Instead, companies need to generate more useful information. For example, companies need to know if they are actively tracking accounts and payment status. They need to know who is pursuing the collection work (lawyer or payee) and whether they have obtained the result. They need to categorize their accounts to understand why customers have not paid, such as cash flow issues, controversial fees, and
services or third party responsibilities. They need to know where the problem is located to determine the action plan for paying the bill.
9. Law firms did not spend enough time focusing on old receivables. Due to the increasing number of legal professionals, most companies continue to introduce new businesses while maintaining strong implementation and focusing on more popular accounts receivable. The management of the company may be busy building the company for the future, so as to ignore the fact that a large number of accounts receivable slipped in their hands. They are not fully aware that increasing receivables by collecting accounts receivable is a quick and effective way to invest more money for partners. pocket.
10. The law firm will not allow the recipient or department to be responsible for producing the results. Many law firms have failed to assess the performance of their employees' aging receivables. Therefore, the collectors have little guidance on what their collection responsibilities should be – and this does not necessarily include dealing with and pursuing older, more difficult accounts. The payee will usually only be responsible for monitoring the ongoing payment of the customer, sending a reminder statement or providing the account receivable report to the respondent. Although these obligations are important, they do not address the more basic issues related to complex transactions and customer relationships that require more personal attention.
Take time to honestly assess your collection and management of receivables. By understanding and overcoming some basic mistakes, lawyers can become more effective in managing their receivables.Business Credit: No Personal Credit And No Personal Guarantee Our Business Credit Membership Provides Weekly Training,resources,vendor Credit Lines, Cash Credit Sources And Banking Contacts. Brand New High Converting Self Help/wealth Generation Success Package. How To Buy Commercial Real Estate With No Cash And No Credit! Birddogbot - Real Estate Deal-finding Solution For Investors (view mobile)! Fan Victor - The Ultimate Fantasy Sports Plug-in (view mobile)! Get Lifetime Commission Per Customer! Our $1 Trial + Live Support Is Converting Like Crazy! Learn To Speak The Hebrew That Really Matters Using Sound, Video And Text. Recurring Charge! Legit Writing Jobs (view mobile)! Modern Love - Dating And Relationship / Get Your Ex Back (view mobile)! Next Generation Backlink Indexer. 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