Linda Artesini outlines a four-step workflow for law firms to collect overdue accounts receivable: courteous email reminders, detailed follow-up emails with aging information, professional phone calls, then turn to a collections service like Coalbox rather than writing off the debt.
Chapters
Hi there, Linda Artesani from Artesani Accounting and The Proper Trust. As an attorney, understanding effective accounts receivable management is essential to the success of your practice. In this video, we will explore the key steps and strategies for managing accounts receivable, specifically tailored to the legal industry. When I first began my journey of working exclusively with attorneys and law firms, I was so surprised when I discovered a surprising reality. Attorneys often have a significant amount of open accounts receivables. It was actually kind of shocking to me because I always thought, well, an attorney would be able to get that money easily, more easily than other industry types. But I noticed that a lot of the attorneys had a large AR balance specifically in that over 90-day column, which that was really surprising too. So there's reasons why we will see attorneys having accounts receivable situations. Some live in a world where it's all they have. They don't do trust accounting, and sometimes they just expire trust and they keep working and they end up having to bill later. And then that's usually the bill that doesn't go— that goes unpaid. So the opportunity is here to pull up that report and dive in. So let's delve into the process of assisting collecting in your firm. On any aged accounts receivable. Step number 1, I want you to craft a courteous email to the clients that you see in that column and remind them that they have an outstanding invoice. Use a tone that's professional, avoiding any hint of accusation. Just a friendly reminder can often result in a prompt payment. Let's face it, sometimes emails get lost, and you might even want to put that language in that email when you reach out. For step 2, if they don't answer that one, you want to send a second Reminder of an email and with an email and just mention that there's an open invoice. Include a statement so they can see how aged it is and set a specific date that you will follow up within a reasonable timeline of about a week. Give them a week. Step 3, if there's no response to either email, consider making that professional phone call. Now, face it, these, these conversations can be uncomfortable, but they often prove to be very effective in securing a payment. If your phone call goes unanswered, attempt one more time to make that last-ditch effort to communicate with your client. Pick up the phone, call again, see if you can get them. If that fails and all the above fail, then you probably will not get a guarantee of payment unless you send it over to collections. So you're at the last, last hope, right? Don't write it off. Proper accounts receivable management is crucial for a prosperous law firm, and ignoring it could lead to problems with, you know, cash flow. So optimizing an accounts receivable workflow is critical and really setting that up in the firm. A lot of people don't like to even have this conversation, or they don't like to give this job. Usually the staff attorneys are making the phone call. But I have a solution for you, and it's called Coalbox. So Coalbox is a collection firm that will do all of those steps for you, and they charge you a monthly fee, and it's a pretty inexpensive fee. And you're going to get a person who is a professional accounts receivable specialist that knows how to do this. And setting this up for your firm is very easy and straightforward, and you can customize the communication that you want to be had between the accounts receivable specialist and your client. So it's not a boilerplate. They'll actually work with you to make it very customized for your firm. And believe me, this is a way to get money in the door, money you worked hard for. This is why I say don't write it off. Coalbox can significantly enhance your firm's financial performance by collecting on that old debt that's just sitting there. So if you want to learn more about this really critical topic, contact me. I'm here to provide you with my knowledge and tools. And this is definitely a tool. This falls in the tool category to to have you have an effective management of your accounts receivable in your legal practice. I hope this video is helpful. There's more detail in the article attached. And as always, subscribe to our channel to stay in touch and reach out if you need help. And on that note, I hope you all have a wonderful, wonderful week. Bye now. Bye.
