As a former Project Manager of a nationally recognized Forensic Animation and Reconstruction firm, I experienced firsthand the difficulties involved in getting payment for services rendered in this complex field. Always eager for bigger challenges, I requested taking over the AR duties as I recognized the importance of relieving the testifying experts from negotiating payments with the clients they were hired to help. I developed a successful AR management system that increased cash–flow by 80% year after year which in turn allowed the firm to open new offices and hire the very best engineers and animators.
Now as the President and CEO of Accounts Receivables Specialists (ARS), I use my system full time to assist forensic expert witnesses achieve the same success while allowing the principals to focus on what they do best.
In this series I will highlight the common mistakes that individual firms make when tackling (or failing to tackle) their increasingly burdensome outstanding AR. Follow me here to learn which errors you might be making and how ARS can help you achieve the success that has our clients raving about our services.
“Like many busy expert witness practices, our AR was becoming an increasingly large percentage of revenue as we grew. When I hired Cosima to assist in increasing our cash-flow, our AR was about 40% of annual revenue. After her system took hold, it dropped to about 15%! The extra cash-flow allowed us to expand into new areas and purchase cutting edge equipment and stay ahead of the pack. Fantastic service.” Craig Fries, CEO, Precision Simulations, Inc. – Grass Valley, California
Mistake # 1 – Leaving the Collection of AR to your Bookkeeper:
Often business owners will think it is a good idea to leave the collection of AR to their bookkeepers, this is a common mistake. Having an individual wear too many hats in one company can lead to angry clients and delayed payments. Effective collection of AR involves a high degree of sophistication in many areas. Bookkeepers are involved with many other tasks that are time consuming.
- Dedication – Your bookkeeper has many tasks to perform each day and typically little experience or standing to devote to developing a comprehensive AR system. At best, they may periodically make a phone call or send a letter when payment is drastically overdue. At ARS, we will provide a specialist who is dedicated solely to increasing your cash-flow and assuring your AR does not reach the “collections” stage.
- Time – Your bookkeeper’s day is already filled with the daily upkeep and proper coding of your financial transactions. Adding the time-consuming task of staying atop of AR is likely to cause overwhelm and poor results.
- Social Interaction – Lets face it, talking about money is difficult for most people. Your bookkeeper is likely no exception, particularly in the case of delinquent payments where there is an opportunity for things to become awkward. At ARS, each of our specialists is highly trained, socially successful and an expert in our methods – we believe we can catch more bees with honey and each of or specialists is skilled in this approach and motivated to make contact with your clients in an effort to resolve any outstanding balances.
- Battle Tested System – Successful AR programs are based upon much more than an occasional “pay or else” letter or phone call. At ARS, our battle tested system is a comprehensive approach that begins with immediate contact after receipt of each invoice and continues in a one-on-one manner until payment is received.
- Separating Conflict from Service – One of the most powerful aspects of our system is removing your company and its employees from the collections side of the relationship and allowing you and your staff to focus exclusively on what you do best – servicing your client.
Stay tuned next week for # 2!