Complaining about SLOW or NO payments? Let me ask this ARRESTING question…

Do you have a policy for being paid?

…And if so, is it communicated to your clients as they move through the perfect client life cycle?

If you answered NO to this, well, we have work to do. Get out your task list, because it is likely you will have a few items to work on by the time you get to the end of this blog post.

 

Let’s talk about this question.

If you don’t have a policy for being paid or if you have a policy for being paid but do not have a system for communicating it, this COULD be the reason you are struggling to collect from your clients.

The collections process starts at the point of sale. After your firm has completed its consultation with the prospect and he says YOU ARE HIRED, your collections process is off and running.

What happens next is you present the prospect with an agreement to service his or her needs and you ask him to sign it. The moment the prospect becomes a client, an invoice is generated and your collections process begins.

As the client is reading the agreement, this is where you or your consultant informs the client of your firm’s policy. If you have a policy to get paid in full prior to delivering service, you will not have a collection issue because they must pay in full prior to services being rendered. If you offer a contingency plan, your client understands that no payment is needed until the case settles.

However, if you are a company that uses a flat fee or an hourly fee to be billed and collected on a payment plan of any kind, this is what should happen.

  1. You should receive a commitment to a specified plan.
  2. You must spell out the retainer fee.
  3. If you accept a deposit, what is the required percentage or amount?
  4. How and when will you be paid is clearly written.

The payment plan should be immediately entered into the order entry and billing system to avoid error. I have determined through managing a practice that most people (99%) will set up payment on a credit or debit card. It’s vital this information is entered correctly to have a closed loop system.

If a client has a balance and will be paying by check or cash, you can identify when the payment is due and set a reminder to contact that person a few days prior to the due date. This conversation will not only discuss the money owed but any other concerns they may have. It is crucial to maintain and build client relationships.

If you are managing your collections with an automated system, you must have a system identified to manage declined credit or debit cards.

The only way to manage clients who do not pay on time or their credit/ debit cards are declined is to pick up the phone and have a conversation with them. During the conversation, you must resell them. Train your staff—ideally one specific hourly staff person—to reiterate why they hired the firm from the beginning and why they need to get back on track with payments so that we can keep moving forward with the services that are being provided.

When this policy procedure is followed, your firm could experience a bump in collections from 50 to 60% to rates in the 90+% range. These funds can be the difference between a firm that is managing and a firm that is growing.

We have provided you with some scripts for your collections person to use when calling clients. Remember these people are paid approximately $15-$20 per hour and will be worth their weight in gold if you can go from a 50% or 60% collection to a rate of 92% or higher. This is money in the bank for your practice to prosper.

Collecting your fees is a critical part of your firm’s business. It is the one area that seems to need the most help in practices when considering cash flow.

Are you worried about your firm's cash flow and getting paid? Schedule YOUR free strategy session here to learn more strategies about adding systems to your firm.

Richard James

As a result of his track record for achieving what most describe as “phenomenal” growth rates for his clients, Richard James, CEO of Automated Business Results, LLC, is quickly gaining a national reputation as “the Legal Systems Expert.” His secret to success is simple. Richard has devised a seven step system for designing and implementing automated marketing systems that grow your business FAST. If you’re looking to develop a practice that supports your lifestyle rather than completely undermining it, call Richard James today.

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