Communication is the key to prompt customer payment – Financial Services

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How often do you communicate with customers? If you don’t, the customer could become unhappy and slow or stop payments. Being in regular contact with your customers will help you gauge a customer’s level of satisfaction with your company’s work. And happy customers usually pay their bills.

Related Reading: How to Manage Collections and Late Payments

TO BE CLEAR

The first stage of communication occurs when you ask a new client to sign a fee agreement. Make sure it clearly explains all your fees, how they are calculated, and when payment is due. Some missions may require an initial deposit and must be communicated to the client. Be clear about the consequences of non-payment, including your right of withdrawal before work begins.

To make it easier for your customers to pay, accept credit card payments or set up an online payment system. Law firms cannot take a one-size-fits-all approach because legal services can be expensive. If your customers don’t have the option to pay as they feel most comfortable, they can walk away and take their business elsewhere. Remember that customers are more likely to pay invoices for smaller amounts that are sent frequently than they are if they receive a large invoice for the same work.

TO BE COHERENT

It’s important for your company to set consistent rates. From hourly lawyer billing rates to flat project billing rates, present your rates in a format everyone can understand.

Whichever path your business chooses, it’s important to have an open and transparent discussion with your customers when you first consult on these billing structures. You can then follow up by reiterating your rates in the engagement letter you send to your customers, including clear and consistent messaging throughout your billing terms, when payment is due, and details on application or not of interest to overdue invoices. This step may seem simple, but it will set your business up for future success. This will prove to your customers that you are transparent and that you will not haggle over fees. It will set customer expectations, so they know exactly what they are paying for, and it provides a clear roadmap of how much is due and when.

As mentioned, an engagement letter and detailed documentation of the work performed should defuse any arguments over the amount of fees. Quality disputes are more difficult to resolve. If the customer’s points are valid, offer to make the appropriate repairs or reduce the charges. Accepting a discount – rather than withdrawing representation – might be a better option to eliminate the problem. This can prevent your business from paying for collection efforts and help avoid further legal ramifications.

Also, keep in mind that the American Bar Association’s Code of Professional Conduct states that attorneys are only allowed to opt out if “the client is in material breach of an obligation to the attorney regarding the services of the attorney. lawyer and has received reasonable warning that the lawyer will step down unless the obligation is fulfilled.” Some state bar associations require you to provide pro bono work to the client to fulfill your ethical obligations.

BE CLOSED

The second stage of communication occurs when accounts become overdue. Train your staff to respond to overdue invoices promptly, as the likelihood of collecting them decreases over time. If the customer is unwilling or unable to pay the full amount outstanding, establish a payment agreement.

And when it comes to making collection calls, be diplomatic. You don’t want to strain an otherwise pleasant customer relationship.

BE PERSISTENT

The final form of communication is through your written collection policy. It should specify how to track and deal with overdue and unpaid accounts. The policy should specify credit terms, fee agreements, and collection guidelines and procedures, including when to engage a collection agency.

If your budget allows, consider hiring a collections staff member to help develop a company-wide policy to manage collections efforts. Otherwise, designate someone from your staff to carry out these tasks. Regular and transparent communication with your customers keeps your business top of mind and ensures that a payment request doesn’t slip into the spam box or get deleted entirely.

THE REWARD

Although you will probably never receive payment on 100% of your bills, you can get closer to this achievement rate. By carefully screening your clients and cases and communicating clearly and consistently, you should see some mitigation of your delinquent accounts.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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