Categorize for Better Action Plans
When faced with a heap, or worse yet, items stuck in various hidden or separated places, professional organizers will tell you to bring it all together, create the heap, then sort, sort, sort.
The Mound of Money Owed to You
I have talked before about bringing together all of the information related to who owes your law firm money and putting all of it into one spreadsheet. You may need to do this because you have changed accounting systems, or moved from a manual system e.g. spreadsheets, to a system that is accounting-based. If your accounting system will allow you to put the information in with the correct dating, that is even better.
Sort, sort, sort
With your stakeholders (see Jan. 14th Blog post), you are going to create categories and sort all of the clients and money owed to the firm. The categories are of your own design, based on your knowledge and the knowledge of your stakeholders. It must work for you. One traditional method is to sort by date, which is called an ageing. How old is the debt? I love an ageing and think it is a primary sort level. But it is just the beginning.
Categories to Consider
We have no clue where this client is
Aggressive, argumentative client
Has been on a payment plan, but stopped
Has been a good payor, then stopped
Attorney hopping clients
Current (meaning, they are paying according to what we ask)
They have moved out of state
Create an Action Plan Per Category
Getting into the details, create an action plan that moves the firm forward for each category. This is not an elaborate process. It should be clear, with simple, assignable tasks. Using some of the examples above it could look like this:
Missing Clients
Betty (Office Manager) will search for the client by:
Calling all numbers
Internet search
Contacting relatives
Has Been on a Payment Plan but Stopped
Attorney with a good relationship calls and does a check-in (see Jan. 14th Blog post).
They Have Moved
Betty confirms the move using steps i., ii., iii., above.
Confirming Information
You might notice that many steps are confirming what you already ‘know.’ Why do this? It helps us make better decisions when we have made sure, as much as we can. It improves clarity. Getting into the details, having present discussions about the current details, also helps us with clarity and decision-making. Sometimes, when you are confirming or finding out new information, you may decide to write-off the amount owed or part of it. That is part of the process too. But let us do that with the best basis of strategy, action, and information.
What About the Difficult Clients?
You must decide if that needs to be confirmed as well. If you do not believe there is a change, then decide what legal actions you will take based on the timing allowed. Consult with your counsel about this. Follow their legal guidance and take the steps necessary to pursue payment. You were hired, they signed a contract, and you provided the service. If all of that is true, you should pursue the money owed to you.
If you would like to get laser-focused help on your unique outstanding accounts receivable, I would love to work with you. Contact me directly at melanie@strategicreceivables.com.