Efficient, timely billing and collections are critical in a down economy. According to the 2019 IPA National Benchmarking Report, the average number of days production locked up for billed receivables is 53.6 days, and the percentage of AR over 90 days is 26.9% for all participating firms.
Some advice to consider:
- Reconsider new client intake. Learn about prospects before they become clients.
- Create or update your client approval process.
- Update your engagement letters.
- Don’t cut your billing rates.
- Consider alternatives to hourly rates.
- Ask for retainers from new clients.
- Centralize engagement letters and billing.
- Email bills and bill monthly.
- Require accountability for time sheet deadlines and billings.
- Share information about billing and collections with staff.
- Reward partners and staff who are good at billings and collections.
- Know your clients’ value.