Practice Management Member Conversations

Good afternoon William,

You don’t specify any details on what you are doing now, so I’m not sure of the accounting processes you currently have in place in your office.

First off, billing should get out to the client at the earliest possible moment. Don’t wait until the end of the fiscal month to bill clients.  By holding all invoicing until the end of the month, your firm is not using its administrative resources effectively. One of the easiest steps a firm can take to maximize cash flow is to change from a monthly billing schedule to a continuous one.

It’s also a good idea to start a personable relationship with the accounting manager or project accountant when the project first opens. Make a friendly phone call to introduce yourself and discuss the payment terms and conditions.

We send invoices out via email and ask the accounting manager or project accountant to confirm they received the invoice and to address any questions or issues the client may have at that time. If they don’t confirm receipt within a few days after the invoice is sent out, I make a ‘courtesy’ phone call or send a follow-up email. If they say they didn’t receive it, I send another one. This also applies to those clients who prefer invoices be sent by US mail. Call or email them a week after you’ve mailed it to make sure they received it.

NOTE: It’s important and will save a lot of time and stress if you make sure the Client has received the invoice before 30-days goes by and then they say they never received it.

If invoice payments are due 30 days after receipt, then a reasonable collection period is probably in the 45 to 60 day range, at which time I email them an ‘overdue notice’ and ask for payment status. If I don’t get a response from the email, I start making phone calls. If I still don’t hear back, I push the correspondence to include the Client's PM/Principal/Owner.

Sometimes, not often, it gets to the point where I ask our PM to make a phone call for me.

I hope this helps you in your future collections.

Kind regards,