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Cash-flow management

19 June 2008

Debtors' control can be seen as the Achilles heel of a firm, without it a firm might have no money to pay staff salaries. Best practice for debtors' control entails the following:

  • Responsibility - of the lawyer who opens the file, to close it and to collect the payment from the client.
  • How to bill the client - be sure what method clients prefer.
  • Get your age analysis - a weekly updated age analysis is the primary tool for managing debtors.
  • Ageing of debtors - unpaid accounts of more than 90 days = bad debtors control.
  • Trust credits and the transfer to your business account - it is a management sin not to transfer your fee portion to the business account on a daily basis.
  • Bills from sheriffs, advocates or experts - collect the expenses and pay them.
  • Taking deposits and topping up when required - take a deposit from a client who you do not know.
  • Use the correct language - when asking for a deposit put it in writing and be clear.
  • Billing regularly practice - send smaller monthly bills and ensure clients pay them.
  • Communication - billing can be a good form of communication.

De Rebus website
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