Accounts Receivable should be easy to manage, track, and collect. For clients, the bill should be promptly sent, clear, easy to pay, and easy to resolve questions/problems. Achieving this ideal A/R environment is challenging and evident by messy, fragmented processes that have high costs of companies spending millions and still writing off millions (collectively, billions).
In the legal industry, margins are decreasing each year with continuous rising operational costs, and increased cost competition from on-demand legal services provided by startups with new business models. Billing and collections are the 3rd most significant challenges for law firms according to Law firm Suites.
One of our legal clients, M.C. Hall & Associates, is not any different from other law firms across the U.S. They were having A/R problems conspicuous by unpaid, aging client accounts. This is common and pervasive in every firm size. Recognizing the problem, being open to using new technology, and preventing client credit from damage were deciding factors to giving us a try. Why consider siyea? Our cost is lower than traditional and legacy A/R tools, and roll out is fast and easy reaching all clients to quickly increase payments. Within the first two weeks, 40% of past due accounts were paid, client engagement increased more than 50%, and time spend on A/R workload was slashed.
Here are the 3 things they did to solve their accounts receivable bottleneck:
1. Make things easier for your clients
Clients did not have visibility of their bill. They received bills, but often lost them or found them difficult to read. Legal invoices are typically several pages with multiple sections. Often, clients thought is was unclear to determine from invoices exactly how much they owed and when it was due. This was especially common for clients with ongoing service. The cleaner and more transparent the A/R process, payment rates increase. Another component to make things easier is the payment itself. 24/7, self-serve access with a variety of payment options accepted such as credit cards and ACH payments is best.
2. Take advantage latest tech, Artificial Intelligence (AI) & Automation:
AI is all over the news. Some stories scare people (like new tech often does), but many reports are covering ways businesses and people are benefiting from AI. How can AI help the legal industry? You don’t need to retain your own AI developers and Ph.D.’s with expert AI knowledge. Hire a company with AI as central revenue generating and problem solving components, and integrate it into your tech ecosystem. Thanks to AI delivered to M.C. Hall by siyea, they experienced a major boost in payments increasing cash flow. Results were fast and profound.
AI continues to work all day and all night behind the scenes when employee time and energy is spent on other important business tasks. The sole task of siyea’s AI is to think of the next best solution to resolve bills and collect payments.
3. Relationship with clients is key:
Having a conversations with clients who are delinquent is uncomfortable and unpleasant for everyone, especially the client. They don’t want to talk to you or anyone about why they are unable to pay the balance due and why they are late. This conversation can damage the relationship. How many times do people at your firm call to get payment? How many people are calling? How often to any of these calls get answered?
When clients get severely delinquent, legal action is taken and often result in judgements. These actions definitely damage the relationship. Sometimes, collection agencies are used which also damage the relationship due to poor client experiences.
The solution, find a tool using modern communication methods with a focus on being friendly and compassionate. Offering payment plans, proactively if possible, is another best practice for building client loyalty. It indicates to clients that you’re considerate by not calling all the time, and the client feels cared for by extending repayment options aligning with their payment capabilities without asking or getting overwhelmed and stressed. When a financial hardship occurs, these features make massive differences in payment rates.
An effective Accounts Receivable process doesn’t have to be expensive anymore. It also doesn’t need to take a ton of time to learn and integrate. Learn more about accounts receivable process in this article