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Birmingham Bar Association Spring 2014

Client Fees Your best opportunity to collect is when your service is fresh in the client’s mind. Billing promptly improves collections and reduces the risk of unknowingly providing additional service to a client who is unwilling or unable to pay. If a project is completed mid-month, send an invoice as soon as possible. Get regular. Establish a billing cycle and hold yourself and others accountable. Our fi rm closes each billing cycle on the last Saturday of the month, with invoices in the mail the following Wednesday or Th ursday. Billing is a top priority and nothing gets in the way. Review your format and design. How does the bill look and feel to the recipient? Does it clearly state when payment is due? Is the service clearly described, or does the explanation ramble? Consider seeking input on your invoice format from a graphic designer or trusted client. Most billing systems support various templates so you may have a choice. Beat the bad news home. Remember when you were a kid and you owned up to that C-minus in social studies before your parents saw your report card? Th e same approach works with legal bills. Reach out to the client if your fee may be perceived as “bad news.” You may be able to bill and collect an amount you would have otherwise discounted or written off . Include a short cover note. Mailing ing an invoice “cold” and hoping for a check without a call is a bad bet. Instead, add a simple handwritten note reminding the client what you did and highlighting a favorable outcome. Billing without collecting isn’t really billing Unlike wine, invoices do not age well. Regular contact and follow-up are essential to successful collections. If payment is due in 30 days, don’t wait 90 days to start the process. Other proven strategies: Develop a process and a champion of that process. Collection steps should be written and documented. Know the sequence of events if payment fails to arrive on time. At one client fi rm, a partner and offi ce manager meet weekly to review and discuss receivables. Consider special measures. Have a Plan B that kicks in when invoices are especially large or when clients are especially slow to pay. Some fi rms call customers to confi rm receipt of the invoice and answer any questions about the charges. Get ahead of potential problems. Limit your exposure – for example by securing a retainer before additional work is done – if you are unsure of a client’s ability to pay. It must be done For many attorneys, setting fees and collecting money are the least enjoyable parts of legal practice. But a strategic, focused approach can make these tasks less onerous and more remunerative. G CPA Mike Baker is Managing Partner of Dent, Baker & Company. He joined the fi rm in 1989. A Certifi ed Financial Planner, Mike is a member of AICPA and the Alabama Society of Certifi ed Public Accountants. Reach him at Mbaker@dentbaker.com. Birmingham Bar Bulletin/ Spring 2014 39


Birmingham Bar Association Spring 2014
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