When most people’s thoughts turn to holiday gatherings, gift giving and New Year’s Eve revelry, the folks in the Finance Department hunker down for some last minute effort to maximize collections for the year.
Here are some tips to help make your holiday season bright (or green).
1. Start Your Shopping Early.
We begin our year end collection efforts in September. At the end of the month we survey our attorneys on all clients and ask for a projection of cash to be received by year end. These projections are compiled and tracked against actual collections. Accounts not coming through on their commitments are followed up on by the collections manager. This survey is also used to clean up bad inventory. A bankrupt client can’t stay on the books just because the attorney doesn’t want to take the ‘hit’ in the current year.
2 Are Your Attorneys Naughty or Nice?
Attorneys want to be their client’s friend. If a client is slow paying, the attorney doesn’t want to reprimand or beg. That’s where a bad cop finance person can come in handy. This removes the attorney from the mix and maintains their friendly relationship. We often have attorneys use the finance staff as bad guys in their communication when bringing up past due balances. I had one attorney ask me to advise when an account is past 60 days. Next thing I knew I was copied on an email painting the attorney as a victim because the accounting staff was all over them for the past due balance. We got paid shortly thereafter.
3. Pay Attention to the Wish Lists
Client billing requirements not met or matters set up incorrectly usually become apparent when past due balances are examined. Even though we keep a close watch on e-billed clients and past due amounts throughout the year, we find ourselves redoing invoices at the client’s request – often times for requirements that were never communicated to us..
4 The Good Kid Doesn’t Get a Lump of Coal.
Prioritize billing for those clients who will pay within the current cycle. It doesn’t make much sense to rush bill in December when the client is on a 60 day cycle. Prioritize the bills for those who pay in under 30 days or those that have promised to pay timely if they get a bill by a certain date.
5. Do You Hear What I Hear?.
Use distributed information to your advantage. An associate who has only working attorney time on a matter may become alarmed if it has not been collected and won’t show in their year end statistics. Their concern will prompt them to follow up with the partner they worked for. That prompt may motivate the partner to take action on the collection. Information is power. The more attorneys are aware of their statistics and portfolio, the more they’ll can be used to the firm’s advantage. This is a good time to direct associates to the tools that are available to them.
Oh wait, was that just a dream? Some of it actually came through this year. Hoping to find some nice presents waiting for us before New Year’s Eve.
Here’s wishing all finance professionals a safe and relaxing January.