A/R: It’s REALLY Worse Than You Think

About this episode

The episode discusses the severe impact of accounts receivable on law firms and the financial implications of unpaid bills.

“Accounts receivables are so much worse for a law firm than most lawyers understand or appreciate. So much worse.” – RJon Robins, author of Profit First for Lawyers In this episode, How To Manage a Small Law Firm CFO and CEO advisor, Etienne Hardre expands upon RJon’s clip from Chapter 14 about the devastating mathematics behind accounts receivable. The Devastating Mathematics Here is what really happens when Client A doesn’t pay their bill. You’ve already spent the money on marketing, sales, production, and overhead to serve them. When their bill goes unpaid, they’re not just skipping the 33% profit, they’re stiffing you on the entire bill. So what happens next? Now you need to cover marketing, sales, production, and overhead for Clients B, C, and D before you begin to see your first profit from working with all four clients. Here’s the breakdown for a theoretical $10,000 case/matter with a 33% profit: Client A did not pay their bill Clients B did pay their bill and their 33% profit goes to cover the costs you already spent on Client A Client C also paid their bill and their 33% profit covers the overhead from Client A Client…

People in this episode

Guest: Etienne Hardre

Topics covered

• accounts receivable
• law firm management
• profit loss
• financial education
• business strategy

Keywords

• accounts receivable
• law firm
• profit first
• financial management
• client payments

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