Transcript Credit Management & Billing Issues in Law Firms

Credit Management & Billing
Issues in Law Firms
Law Institute of Victoria
Melbourne
Prepared & Presented by
Colin Prosser FICM CCE
The Credit Professionals
August 2010
My Background
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35+ years in Credit & Office Management & Accounting
Hold Diploma in Business Studies in Accounting - 1988
AICM Member since 1985
Fellowship Membership with A.I.C.M - 2004
Hold Certified Credit Executive ( CCE ) Status – 1998
AICM Councillor – Vic / Tas Div’n – 1997 to 99 & 2003 to 2006
AICM President – Vic / Tas Div’n – 2005/6
Currently AICM Director – Member Services – 2006 to now
Worked in various Industries over the years including
Manufacturing, Media, Finance & Title Searching,
Telecommunications, Local Govt, 3@Law, Supplier /
Distribution – Retail, Wholesale & Service, Accountancy,
Electricity Supply, Plant and Equipment, Construction /
Building
My Own Business “ The Credit Professionals “ – Consulting
( Policy & Procedures, Staffing & Systems ), tailored In House
Training, Business Continuity Plans & Credit Bureaus.
Assist Law Firm practices with Collection Issues
Credit Management & Billing Issues
in Law Firms
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Credit Policy & Procedures
Partners ( Equity ) Support
Engagement / Retainer Letters
Opening Accounts
Billing Customers
Collection Follow Up
Handling Disputes
WIP & Disbursements
Trust Accounts
Credit Policy & Procedures
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Example Credit Policy & Procedure; is part of handout paperwork.
Must have Equity Partners agreement & sign off
Cover Credit Department function & authority
Reporting – DSO figures; Aged Trial Balance; Disputed & Legal Accounts
Internal Communication lines
What is required to Open an Credit Account
Terms & Conditions ( what is stated in Engagement Letter )
Payment Terms; Credit Limits & handling Disputes ( IDR / EDR )
Reminder & Demand Letters; Debt Collection & Legal Action
WIP & Stop Work on Files
Handling of Trust Funds
Partners ( Equity ) Support
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Copy of Credit Policy & Procedures, agreed to by Partners.
Gain sign off, so no disagreements in the Future.
Organise Monthly Meeting with each Department head
Any Collection or Dispute issues refer to Equity Partners
Engagement / Retainer Letters
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Initial Discussions ( Quote on Matter, Hourly Rate$, Payment
terms, disbursements, dispute resolution, review of WIP etc )
Letter ( cover above, signed copy returned, review status )
Ongoing Business, reminder Letter covering main points.
Upfront monies for Trust Account, to cover Disbursements as
a minimum.
Watch for Type of Matter & / or Client – Insolvency –
Individual or Commercial , Interstate / Overseas.
Opening Accounts
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Identify Client / Business
Part of Terms allow for Credit Check of the People & / or their
business.
Businesses check ABN refer www.abr.business.gov.au
Letter sent to Client advising of Account No & initial Credit
Limit ( Matter to be reviewed regularly – initial Letter best
guess & current WIP situation )
Billing / Invoicing Customers
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When to Bill, How often, Disbursements only, Monthly etc?
Finance available
Always attention Bills to whom you have been dealing with.
Details in the Bill ( Which Matter, Interim or Final Bill )
Billing Periods ( as Customer requests, by 25th of each month
or Departmental Monthly by staggered Dates 7th, 14th, 21st )
Ensure Payment terms are stated Clearly on Bills &
Statements; standard T&C’s should be on your Website.
Collection Follow Up
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Part of Credit Policy
Computerised Reminder & Final Notice Letter/s & Monthly
Statements.
Follow Up Phone calls, SMS, Fax or Emails
If an Individual “ Refer Debt Collection Guidelines “ on
number of contacts & undue harassment clauses
http://www.asic.gov.au/credit
Cannot Collect need 3rd Party interact ( consider Debt
Collection )
Use Terms & Conditions as “ Tools of Trade “
Try to keep relationship or not
Handling Disputes
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New Credit Laws ( NCCP ) require Internal & External Dispute
resolution processes. ( IDR & EDR ) for Individuals
Usually 60+ days before aware of Dispute ( Client hasn’t paid
or advised of dispute )
Need to act quickly to resolve
Review of File by Responsible Partner with Credit Department
( Quoted Price vs Charged; WIP; result on Matter etc )
Supply details requested by Client.
3rd Party involvement maybe needed to resolve issues or find
solution.
WIP & Disbursements
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Should run off weekly Report on WIP & disbursements by
Department & Matters ( who is handling etc )
Discuss with Solicitor handling, if missed previous months WIP
or Disbursements ( Write Off ? )
What has been Billed, what hasn’t & What has been given as
Guesstimate.
Final Accounts to go; check status on WIP & Disbursements
nothing missed.
Billing ( no time recorded ) but WIP ? ! ; still need to Bill for
Disbursements ( recoup outlay or Creditors still need to be
paid )
Trust Accounts
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Print weekly Reports by Department & Matter, remind those
handling Matter to complete Journals & gain signoff; not just
deduct from Bills raised.
Discuss with Department Head partner on any issues.
By transfer of trust monies when able; helps Cashflow & / or
payment of Creditors ( Barristers Fees etc )
Found Accounts to be closed with Still money in Trust.
Questions
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Happy for you to ring or email me; if I can be of any further assistance
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Email [email protected] or [email protected]
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Website www.creditprof.com.au
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Ph / Fax 03 9363-2659
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Mobile
0412 209 984