It Begins and Ends with …. Credit Control

Forgive the brevity of the post, but I am taking some time off with the children and won’t be at the computer much.

This post, like all my posts over the past few weeks, is written ahead of time. I have taken a leaf out of Chris Brogan’s book.

Credit controllers, whether in professional services or any other business, get a terrible rap.

Rarely, if ever, have I seen a lawyer thank the person for having recovered a debt which they ran up. If anything, they think of them as an inconvenience and someone who needs to be kept at arm’s length.

Sitting yesterday, in a well known coffee shop in Exeter, I heard two lawyers moaning about their paltry bonuses and the fact that they were not going to be paid because the firm had surreptitiously introduced another hurdle to deny the payment of the bonuses; namely payment of some of their outstanding bills. [Next time guys try not to speak quite so loudly!]

In other words, no cash = no money. They were aghast that this was the case and blamed everyone else for their predicament.

I was sorely tempted to lean over and say:

“Look, are you seriously suggesting that the firm should pay you a bonus of their money when they haven’t been paid?”

The point is that if lawyers thought more carefully about the client relationship they could practically eliminate bad debts. As I keep reminding those lawyers who feel uncomfortable about the whole billing and recoveries process, do they believe their clients would be given goods on the tick from Tesco or ASDA? Not in a million years. So why should legal services be any different?

Money on account should be requested at every conceivable stage of the transaction; payment of the disbursements shouldn’t be allowed from office account save in very rare circumstances; and if the client didn’t pay the bill within the 30-day period then no further work would be done.

Would lawyers adopt such stringent criteria? No.

The reason: They would all be worried to death that their so called clients would walk and go to their nearest competitor who was amenable to providing credit. This all comes down to confidence and believing in yourself, the services that you offer and that the firm and its partners will fully support you. And perhaps crucially you will see the partners adopt the same level of discipline.

If you must resort to a credit control process, then for God’s sake give your credit controller all the help you can muster. Don’t think of him/her as something of the night and only there to give you a hard time. Just think that if your salary was dependent on recovering you fees, as it would if you were operating as a sole proprietor, then would you be so accommodating with your clients?

Rather than harp on about Cash is King change the slogan and say that Credit Control is Queen.

Contact me

For more on developing profitable business, innovating in professional practice and implementing social media, subscribe to the RSS Feed of my Blog. Follow me on Twitter at @0neLife, or @Ju_Summerhayes connect to me on LinkedIn or friend me on Facebook. If I can help you or your practice, check out my coaching and consulting firm via LinkedIn, email me on juliansummerhayes@gmail.com or call me on 075888 15384.

4 Responses to “It Begins and Ends with …. Credit Control”

  1. [...] This post was mentioned on Twitter by Julian Summerhayes, Julian Summerhayes. Julian Summerhayes said: MY BLOG POST OF TODAY: It Begins and Ends with …. Credit Control http://bit.ly/9Ei5To [...]

  2. [...] This post was mentioned on Twitter by Julian Summerhayes, Julian Summerhayes. Julian Summerhayes said: MY BLOG POST OF TODAY: It Begins and Ends with …. Credit Control http://bit.ly/9Ei5To [...]

  3. Thanks Alastair. I am surprised how credit control is often viewed inside a business. It always seems to be someone else’s responsibility and never the person who actually created the debt in the first place. Subtle pressure is always better than a threat of legal proceedings and given where we are with a very tech savvy world, I am quite certain that better procedures and processes can be put in place to ease the burden on businesses. A reminder system is always a good start and a good old fashioned telephone call.

    Julian

  4. Thanks Alastair. I am surprised how credit control is often viewed inside a business. It always seems to be someone else’s responsibility and never the person who actually created the debt in the first place. Subtle pressure is always better than a threat of legal proceedings and given where we are with a very tech savvy world, I am quite certain that better procedures and processes can be put in place to ease the burden on businesses. A reminder system is always a good start and a good old fashioned telephone call.

    Julian

Leave a Reply