Accounts receivable and Pipeline: Case study
At a recent presentation on our Road to Revenue National Tour, a young lawyer was concerned. She said that she has a new practice and has been successful in keeping her accounts receivable to a minimum. In other words, she has been able to work, bill and get paid quickly, the three elements of my 3Dimensional Lawyer® . Her concern, though, is that her pipeline for new business seems to be empty. She is concerned that prompt payment has an impact on additional work to be lined up for her to do.
In order of priority, one needs to get the work … marketing. Then, one must do the work. Production. Next, one needs to get paid. Finance. These are the three legs of the stool. The successful lawyer/law firm must focus on collections. Less than a 90% realization/collection rate is a symbol of future trouble.
In this lawyer’s situation, she is successful in the collection phase. In fact, it’s difficult to imagine a higher success rate when you have little to no accounts receivable.
The focus, then, needs to be on marketing, getting more work to fill the pipeline. These are separate and distinct issues. Relish in your success collecting your billings and address the marketing to attract more clients.Tags: Cash, Finance, Management, Marketing