23 Jun Winning the case to encourage clients to pay on time
QuickFee CEO, Bruce Coombes, shares three strategies to get your accounts paid on time.
Unfortunately, lawyers don’t escape the cash flow problems that occur in just about every business. One common cause of this problem is overdue client accounts. Although law firms have the option of asking a client to pay upfront into a trust account, this wont suit all clients. In fact, most clients will likely want to be billed at the end of a matter. If a client then is unable or unwilling to pay on time, months can go by before the firm is paid. Below are three strategies for lawyers to encourage their clients to pay on time.
DONT SHOCK YOUR CLIENT.
Unwillingness to pay on time can often stem from a client feeling that they are paying for something they did not expect to be charged for. Although cost agreements are supposed to clear this up, make sure that your clients understand completely what they will be charged for and what activities will incur extra charges. Take some time in initial meetings together to review and discuss the cost agreement and resolve any queries they might have.
KEEP ON EVOLVING.
A recent survey showed that over one-quarter of fee payments are still made in cash. This number is likely to drop in the future as clients embrace new methods of payment. Make sure that your firm is able to accept payment in all forms. There is a whole suite of payment options now, so it might be worthwhile to look into going beyond cash, bank transfer or credit card. If people are able to pay the way they like, chances are you could get paid on time more frequently.
Sometimes a client will not be able to pay their fee on time – they simply wont have the money. The problem here is that even if they go onto a payment plan, your cash flow is going to be drastically affected. Some options such as fee funding allow your client to make installments on their bill while you get the full amount of the invoice up front. This benefits both you and the client.
Bruce Coombes is the founder and managing director of QuickFee, a fintech provider of Professional Fee Funding to lawyers and accountants across Australia. His 30 years experience spans litigation support, Asian and Australian tax, outsourcing to Malaysia, CA program exam writing, public practice, board appointments, and working on task forces with the Accounting & Professional Ethics Standard Board and the Institute of Chartered Accountants Australia.
With Professional Fee Funding, firms invoices can be paid in full within days, while their clients can have the option of paying in more manageable monthly installments.