We are still talking about "accounts receivable" as part of the area of "billing" which is the fourth area of the five areas that make up every business in the world. The other four parts of every business are : "Clients" or "customers"; "Administration"; "Getting the work done"; and "Collecting.

As I stated last week, it is probably going to take us several weeks to talk about the area of "accounts receivable." Last week I gave you an introduction to this subject, this week I would like to talk about some other information regarding "accounts receivable" that will continue to heighten your consciousness about just exactly why "accounts receivable" are so important in any business, but in particular, a law firm.

I am reminded of a phrase I heard once that has stuck with me with regard to the concept of asking for money. The comment is: "asking for money is an unnatural act." Wow, an unnatural act! What this means is that we as human beings being raised in a county such as the United States that loosely follows a predominantly Judeo-Christian ethic, with a lot of other schools of what is "right and wrong," being thrown in, apparently are being raised that it is not okay to ask to be paid for what we have earned. Now that is a sobering thought. Have we listened to too many lawyer jokes, and therefore, somehow we think we should not be paid what our clients have agreed to pay us? We have a contract with the clients, we give them itemized bills, somehow we are not supposed to ask to be paid? We put in extra time, we do pro bono work, we work ourselves crazy to the detriment of our family lives, our personal lives, and even sometimes our health, and somehow it is not okay to ask to be paid? As a friend of mine said to me recently, "get over it!"

Somehow, we need to train ourselves to expect to be paid for what we have earned. We need to train ourselves to not be afraid to ask to get paid. We need to train ourselves for asking for what we have earned is not an unnatural act. In fact, it should be an unnatural act to expect not to get paid.

One of the other concepts that has to do with "accounts receivable" is as follows: "it is impossible to collect an account receivable that does not exist." I have had partners in the past who were so worried about what they had not been paid, that they constantly forgot to celebrate what they had been paid. This is not to say that you should simply forget about what you have not been paid, this is to say do not become so preoccupied with what you have not been paid that you forget to celebrate about what you have been paid. In short, it is impossible to collect an "account receivable" if you do not have any. I have always looked at "accounts receivable" as money in the "pipeline," or like "money" in a big funnel and eventually with enough pressure built up in the funnel a lot of that "money" was going to come out of the bottom. This philosophy seems to work very well. Try it every way you can to get appropriate retainers. Bill everything you can to a client that is reasonable. Expect to get paid. Bills that are sent within twenty-four hours of a good result will get paid within twenty-four hours of the time they are received. Keep track of your "accounts receivable." Send letters to your clients asking them to pay you. Send letters to your clients asking them to make payments. Send letters to your clients suggesting you may discount your bill for a lump sum payment. Look for "billing" moments. These are times when the clients are most in need of your services and are most likely to want to make a payment to you so you will continue to work for them.

When you make up your "accounts receivable," have accounts receivable aging; thirty days, sixty days, ninety days, 120 days, 180 days. Spend your time trying to collect your youngest "accounts receivable." This will be more productive than spending most of your time trying to collect "accounts receivable" that for some reason you have allowed to get over 180 days. Review your "accounts receivable" monthly. Set aside a day when you will work on your "accounts receivable" and see what you can do to reduce them.

Unless you have a totally contingent fee practice, having some type of a system where your bills are prepared every month, your clients are billed every month, you keep track of what has been billed and what has been paid, and that you instill in your whole office, an expectation that you will be paid, you will slowly but surely go broke! Do not apologize for your billing, remember, it is not your problem that the clients are asking you to solve, it is their problem. Remember, it is your client's matter that they have brought to you for you to give them help, you didn't create the situation, you didn't make the choices for the client, you don't have to apologize for the fact that the client is in need of legal services.

Next week we are going to finish up our talk about "accounts receivable" by talking about a couple of systems we have in our office with regard to "accounts receivable" that I think will be helpful to you with regard to having a quick list of "accounts receivable" that you can scan to keep you up to date with exactly what is happening with those "accounts receivable." These are administrative procedures that can come off of your computer, or that you can do on a Lotus spreadsheet, and what they will do is provide you with measurable information so you can manage your practice, and in particular, manage your "accounts receivable." I think you will find these hints very helpful.

Talk to you next week.

Jim Wirken is a civil trial attorney and the Chairman of the Board of The Wirken Law Group in Kansas City.