A well-written lawyer business plan usually provides comprehensive information on achieving the desired goals and the type of services the firm will offer customers. However, writing this document can be quite challenging and overwhelming for any new attorney just starting with law practice or considering opening up a new law firm.

Important Things To Follow When You Make A Law Firm Business Plan

1. The Law Firm’s Mission And Vision

In the middle of an uncertain future, a lawyer should have a positive attitude and an individual passion for serving justice. Otherwise, it will affect their work performance.

A law firm should beneficially serve the people while driving the business toward success. Therefore, the purpose of law firms is to help society, provide justice, and maintain peace through the rigorous pursuit of excellence. Having a clear mission statement, vision, goals, and values will help the law firm stay grounded and thrive.

Law firms can succeed with their goals and purposes if they motivate all members to work together to develop beneficial services for all parties involved.

2. Establishing KPIs

A law firm will be successful if it can achieve its goals. So, a lawyer should be able to identify their key performance indicators and describe the means of achieving them. The set goals are not the only aspect that should be considered, though. The other important point is how you will keep track of your performance to measure your progress.

It's also essential that the performance indicators in your business plan are measurable and specific, so it would be effective for any member of the board or firm who will read this document. In addition, detailing objectives and goals can give an idea about what kind of information, technologies, human resources, budget, partnerships, and strategies you need to achieve your goals, satisfy your clients, and grow your business.

3. Creating A Timeline

When you write a business plan, it won't be easy to figure out what will happen in the future. Therefore, writing down timelines is an essential part of every business plan. It will help you track what is planned for the future and know when each task needs to be specified and completed first. If you don't do this well, it will create confusion once your business starts up or contracts are signed with clients. Therefore, timelines are very helpful so that you can track how long it takes to complete each task or project.

4. Continuous Improvement

A lawyer should always be willing to learn and advance with the law and society. As a business person, you must keep learning as much as possible to apply new technology and industry changes effectively. If you don't stay up-to-date on the latest trends, new laws, and upcoming court decisions, it will be difficult for your business plan to do well. A business plan needs constant improvement for it to be executed properly, so don’t forget to include continuing legal education for you and your team, its budget, timeline, objectives, resources, and measurements. 

5. Focus On Adaptability

How you write your business plan will depend on what type of law firm you will become. For your business plan to become successful in practice and maintain relevance over time, it needs to change to adapt to your current needs and values. You should not only update your existing plans with new information and data but also make sure they are appropriate for the current times. 

"Success is not a matter of chance; it is a matter of choice," once said Vince Lombardi. However, all successful businesses and companies have one thing in common: willingness to work hard and adapt to new variables.

Everybody knows business planning is complex, so it takes time and effort to work out everything correctly and make it flow smoothly. Suppose your business plan turns your law firm into a successful and profitable business. In that case, you must revisit and update it frequently and make the necessary changes for your firm to move forward instead of just stagnating in your comfort zone.

Bottom Line

When you create a good business plan, you will find many benefits from opening up a law firm or writing a legal document for your clients. However, if this is your first business, you should know how to plan to get it up and running.

You will learn to manage sales and marketing, budgeting, customer service, and attracting and retaining talented personnel. You need to learn fast how to work on the positive aspects of running your law practice to gain an advantage over your competitors. A well-written business plan will take you there. 

A robust and effective AR management procedure can differentiate between dwindling capital and a thriving business. However, businesses that continue to operate their AR manually will encounter numerous roadblocks that negatively impact cash flow and customer satisfaction.

To understand the accounts receivable process and its common goals, you must first master accounts receivable fundamentals. In this article, we shall define accounts receivable goals and objectives and offer guidance on how to set accounts receivable goals. 

What Is Accounts Receivables Management?

Management of accounts receivable is an integral part of any business organisation. It substantially affects customer relations, cash flow, operating capital, and your business's bottom line.

Accounts receivable (AR) are payments owed to your business for services or products that have already been provided. The process of ensuring that these payments are made accurately, on time, consistently, and dependably is a proper Accounts Receivable Process. A well-managed AR reduces overdue accounts and the time and effort required to manage them.

Outsourcing Accounts receivable services encompasses a variety of processes. It will include credit extension, customer relations, billing, monitoring and analysis of payment trends, collections, and payment reconciliation.

What Are The Common Goals Of The Accounts Receivable Management Process?

Accounts receivable can be a common source of stress for businesses, with late payments causing countless funding and cash flow issues for many businesses. Setting SMART - Specific, Measurable, Achievable, Relevant, Time-bound performance goals for accounts receivable services can help you optimise your process and decrease the amount of time it takes for your customers to pay you. So, here is the list of the goals of the accounts receivable management process:

1. Integrate A Structured Credit Approval Process

Establishing a system for credit approval necessitates consultation with the finance and accounting departments, as the decision to either grant or deny credit to a vendor could affect your revenue. Determine the requirements for establishing a line of credit with your organisation, including override and credit hold conditions. Allowing your customers to submit their applications through an automated system can reduce clerical errors and prevent fraud.

2. Define KPIs And Objectives

Your organisation's initial accounts receivable performance objective should be centred on its objectives and KPIs. In the end, it is difficult to determine the scope of your invoice problems without the whole picture. The most prevalent metric in accounts receivable debtor days significantly impacts cash flow. Therefore, reducing the total number of debtor days should be one of your primary goals and objectives for the accounts receivable process.

There are, of course, many other metrics that you should monitor, such as the number of aged debts, the number of follow-up calls made to clients, the percentage of debts written off each month, the percentage of clients who pay late, and the number of reminders sent to clients. Choose the metrics that best meet the needs of your business and strive to reduce them as much as possible.

3. Instituting The Usage Of Credit Transactions

The company may adopt the practice of providing credit policies to its customers. This credit may be extended for a predetermined period, and any default on this payment is typically subject to a penalty. This credit facility practice requires two parties to agree on the terms and conditions for such credit transactions. Before agreeing to these terms, the provider of this facility should also verify the customer's ability to make payments to avoid a loss of cash flow.

4. Reduce Losses Sustained From Bad Debts

Blocked cash means insufficient funds to conduct daily activities. No company would want to incur losses of any kind. Inefficient receivables management would result in bad debts, ultimately leading to losses. Receivable management will allow you to keep a close eye on the payment schedule, allowing you to follow up regularly with your debtors and maintain optimal cash flow levels.

5. Billing Clients Online

Online billing is standard in today's business world; implementing it should be one of your accounts receivable optimisation goals if you're not already doing so.

In terms of speed and ease, there is no comparison between online billing and mailing paper invoices. The former is immediate, whereas snail mail is so named for a reason. Similarly, it is much more convenient and straightforward to bill customers online. Creating and sending invoices is less cumbersome when you have everything in one place, and keeping track of payments is a breeze.

6. Collecting Money

Although it may seem obvious, the customer must be billed if cash is to be collected. Therefore, invoices must be sent promptly and accurately. The receipt of your invoice is the initial indicator of the effectiveness of your debt collection system for a business. If invoices arrive late and are inaccurate, your accounts receivable department will be perceived as inefficient, and customers may exploit this perceived weakness to delay payment.

In addition, if an invoice is incorrect, some customers may use this as an opportunity to assert that there is a dispute on the account and, as a result, suspend payment on all invoices until the dispute is resolved.

7. Accounting And Billing

Invoicing supports the Accounts Receivable Process in addition to credit approvals and data management. Here's how to bill professionally and efficiently.

First and foremost, you want your invoices to be accurate, so maintain detailed records of the work, products, and services you will be billed for. Also, provide clear payment terms to avoid any confusion. Include all the terms that were agreed upon with the customer on the invoice to prevent any misunderstandings, and be sure to adhere to these terms as well. Again, this demonstrates to your customers that you are trustworthy.

8. Give Customers Multiple Payment Options

The majority of businesses prefer to conduct transactions online, but some would rather pay invoices with cash or checks. For instance, certain software permits customers to pay via credit or debit card, ACH bank draught, or by mail. Utilising a billing platform that allows you to send invoices and accept multiple payment methods makes it easier for every customer to pay their invoices.

9. Sending Reminder Emails

When the payment is due or past due, you should send a well-written email to your customers to remind them to settle their debt. This is essential for maintaining good customer relationships and a steady revenue stream.

An automated payment solution makes optimising your email payment reminders easier. For instance, with online applications, you can compose reminder emails, customise them based on the recipient, and set up an automatic trigger to send them.

Thus, customers who are late on their payments will automatically receive your email reminder without your intervention. It is essential to send email reminders, but it can be tedious and time-consuming. The described process optimisation makes an enormous difference.

10. Establish A Transparent Credit Approval System

Given that you are lending money to your clients, one of the most effective accounts receivable process goals and objectives is to establish a clear and concise credit approval policy. It is essential to specify the specific conditions under which credit limits can be exceeded, if applicable, and what must occur for an account to be placed on hold.

To accomplish this, the accounts receivable services team should collaborate closely with finance and sales to determine which policies make the most sense for your current clientele. Additionally, you should regularly review your credit limits to ensure that your policy is still applicable. Finally, depending on the circumstances, you may need to modify your policy to better align it with changing business and economic conditions.

11. Develop A Resolution System For Billing Disputes

Almost all businesses handle disputed invoices, and establishing a procedure for resolving them can lead to more satisfied customers and paying bills. Before providing the vendor with a product or service, informing them of the terms of the transaction enables them to ask questions or express any concerns before receiving an invoice. Explain each item on the invoice and offer an alternative solution if a vendor disputes their bill, such as a payment plan.

12. Streamline The Billing Process

When invoicing is not handled effectively, accounts receivable frequently run into problems. From incorrect client information to a failure to send the invoice promptly, errors in your invoice workflow can cause delays and prevent you from receiving payment. It is also important to review when you send invoices, as many businesses send invoices in batches, causing a cash flow bottleneck.

When considering your accounts receivable process objectives, you should consider automating whenever possible. By automating your process with an electronic billing system, you can reduce the risk of human error and ensure that invoices are issued as soon as the work is completed, thereby increasing your cash flow and reducing administrative burdens on both sides.

Conclusion

The condition of accounts receivable can reflect on the business as a whole. For example, if they are well-organised, the finances are sound, the customer relationships are thriving, and the employees are content. On the other hand, if they are a mess, the opposite is true.

A good question is how you can determine the status of your accounts receivable; achieving the goals discussed in this article is one way to determine if you are on the right track. Reaching all of them will ensure that your accounts receivable services are optimised.

Automation technologies, in particular, are overhauling the way people work by taking over more routine administrative tasks and therefore reducing the amount of back office work needing to be done by individuals.

This is leading to an evolution of the role of the modern-day finance professional – primarily that of the CFO – and here Marieke Saeij, CEO at Onguard, presents finance Monthly with some of the key changes we should expect to see.

The need to develop new skills

As automation technology becomes more prominent in the financial sector, CFOs will be able to dedicate more time to bigger picture issues, such as where they can create business efficiencies, and focus on how else to add value to their organisation. As a result, they will be required to develop new skills, such as analytics, communications and programming. This will ensure they have the knowledge and ability to interpret and analyse data collated within their credit management system, for example, and turn these insights into actions. CFOs should also look to create new KPIs to ensure they are continuing to get the most of their operations and focus more on managing financial processes, rather than carrying them out.

As CFOs spend less time on the monotonous day-to-day tasks, they will also be able to look more closely at customisation and ensure they understand and deliver each customer’s preferred communication channels and payment methods for their invoices. This will allow the business to interact with customers in the way they prefer to increase the chances of invoices being paid on time and to strengthen existing relationships.

Developing new strategies

The use of big data in predictive analytics is providing CFOs with key insights on a wide range of issues, which can be used to drive better commercial decisions and inform decision-making processes. This will enable them to add strategic value by being proactive, rather than reactive, as they can use information from the past to predict the future. For instance, predictive analysis may show that a certain customer has paid his invoices on average within 28 days for the past seven years. This means it is highly likely he will also do the same when he receives the next invoice. CFOs can then use this information to decide how they interact with this customer, chasing for payment only after that time period has elapsed.

The introduction of real-time finance cycles could also change the way CFOs operate as they will no longer be using outdated figures and basing important decisions on potentially inaccurate information. With real-time finance cycles, CFOs will be able to work with the most up-to-date information and be reassured that they are making business decisions with the latest available data. This will allow them to see where possible adjustments need to be made and take action immediately.

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Cross-department collaboration

Often, the siloed nature of large companies inhibits the efficiency of a CFO as it means they have a lack of visibility and are not always privy to important information. With more time available to them, CFOs could collaborate with other departments within the company to ensure the organisation gets the most from all of its financial operations. This will help every department to have a better understanding of what other departments are working on, how this may impact them and the financial processes involved. This will stimulate greater openness and understanding between teams and could improve the business’ credit management processes.

The modern-day CFO will be substantially different from the traditional view of the role. However, this is a fundamentally positive thing. Thanks to increased use of more advanced technology, CFOs will be able to move away from the more mundane day-to-day financial tasks needed to keep a business ticking over and take on a more strategic, diverse and value-adding role.

Unfortunately, by prioritising ad-hoc incident resolution, organisations struggle to identify and address recurring data quality problems in a structural manner. So what is the correct approach? Boyke Baboelal, Strategic Solutions Director of Americas at Asset Control, answers the question for Finance Monthly.

To rectify the above issue, organisations must carry out more continuous analysis, targeted at understanding their data quality and reporting on it over time. Not many are doing this and that’s a problem. After all, if firms fail to track what was done historically, they will not know how often specific data items contained completeness or accuracy issues, nor how often mistakes are made, or how frequently quick bulk validations replace more thorough analysis.

To address this, organisations need to put in place a data quality framework. Indeed, the latest regulations and guidelines increasingly require them to establish and implement this.

That means identifying what the critical data elements are, what the risks and likely errors or gaps in that data are, and what data flows and controls are in place. By using such a framework, organisations can outline a policy that establishes a clear definition of data quality and its objectives and that documents the data governance approach, including processes and procedures; responsibilities and data ownership.

The framework will also help organisations establish the dimensions of data quality: that data should be accurate, complete, timely and appropriate, for instance. For all these areas, key performance indicators (KPIs) need to be implemented to enable the organisation to measure what data quality means, while risk indicators (KRIs) need to be implemented and monitored to ensure the organisation knows where its risks are and that it has effective controls to deal with them.

A data quality framework will inevitably be focused on the operational aspects of an organisation’s data quality efforts. To take data quality up a further level though, businesses can employ a data quality intelligence approach which enables them to achieve a much broader level of insight, analysis, reporting and alerts.

This will in turn allow the organisation to capture and store historical information about data quality, including how often an item was modified and how often data was erroneously flagged. More broadly, it will enable organisations to achieve critical analysis capabilities for these exceptions and any data issues arising, in addition to analysis capabilities for testing the effectiveness of key data controls and reporting capabilities for data quality KPIs, vendor and internal data source performance, control effectiveness and SLAs.

In short, data quality intelligence effectively forms a further layer on top of the operational data quality functionality provided by the framework, which helps to visualise what it has achieved, making sure that all data controls are effective, and that the organisation is achieving its KPIs and KRIs. Rather than being an operational tool, it is effectively a business intelligence solution, providing key insight into how the organisation is performing against its key data quality goals and targets. CEOs and chief risk officers (CROs) would potentially benefit from this functionality as would compliance and operational risk departments.

While the data quality framework helps deliver the operational aspects of an organisation’s data quality efforts, data quality intelligence gives key decision-makers and other stakeholders an insight into that approach, helping them measure its success and demonstrate the organisation is compliant with its own data quality policies and relevant industry regulations.

The financial services industry is starting to focus more on data quality. In Experian’s 2018 global data management benchmark report, 74% of financial institutions surveyed said they believed that data quality issues impact customer trust and perception and 86% saw data as an integral part of forming a business strategy.

Data quality matters. As Paul Malyon, Experian Data Quality’s Data Strategy Manager, puts it: “Simply put, if you capture poor quality data you will see poor quality results. Customer service, marketing and ultimately the bottom line will suffer.”

In financial services with its significant regulatory burden, the consequences of poor data quality are even more severe. And so, it is a timely moment for the rollout of the multi-layered approach outlined above, which brings a range of benefits, helping firms demonstrate the accuracy, completeness and timeliness of their data, which in turn helps them meet relevant regulatory requirements, and assess compliance with their own data quality objectives. There has never been a better time for financial services organisations to take the plunge and start getting their data quality processes up to scratch.

Macroeconomic turbulence is the process that sets in motion change from the largest financial institutions, down to the smallest of back pocket wallets. Here to provide practiced and proven guidance on how to navigate the macroeconomics maze around us, while keeping one step ahead, is Rob Douglas, Vice President of UK & Ireland for Adaptive Insights.

As organisations enter 2017, they find themselves in a chaotic macroeconomic environment. With a great deal of change in 2016, and much more in store for 2017 as the effects of Brexit, the new American government, and countless other factors take hold, it has the potential to be a volatile year. Indeed, in a recent CFO Indicator survey, eight out of 10 CFOs considered it likely or very likely that market volatility will continue.

To cope with these market conditions, finance teams are needing to become more strategic and visibility into business data—including both financial and non-financial KPIs—is key. In another CFO Indicator survey, we found that 45 percent of CFOs report that they are currently fulfilling the role of chief data officer, compared to only 16 percent who said that the CIO has this responsibility. It is clear that CFOs and their teams are well placed to become the strategic business advisor as data ownership is shifting to the office of the CFO.

Active planning

In a constantly changing environment, finance departments can become more agile by taking an active vs. static approach to planning. Specifically, finance teams must embrace a process that is collaborative, comprehensive, and continuous to adopt an active planning process. This active planning approach allows finance to shift into a leadership and guiding role, instead of being mired in the drudgery of back-office transactional tasks.

And, as teams embrace active planning, three clear benefits start to emerge:

• Better collaboration: Active planning encourages broader participation across the organisation, by leveraging technology that makes it easier to establish a single source of shared data and customised dashboards that give users ready access to information.

• Comprehensive capabilities: A single, comprehensive process drives optimisation widely across the diverse parts of the business, and the organisation. You can reap huge benefits from real bottom-up planning and develop a robust picture of the business.

• Continuous planning: Plans are produced rapidly and can be quickly iterated so ongoing, real-time planning and rolling forecasts become the norm. FP&A can provide insights to help the business respond rapidly to changing market conditions or competitor activity.

A holistic view of the business

CFOs are being tasked with not only understanding and communicating financial results but with helping the organisation to understand the operational drivers behind them–a key factor for business agility in a volatile market. This requires much more detailed analysis of business KPIs, many of which are non-financial, and therefore involves greater collaboration and integration across the business. As such, to be agile in 2017’s changing market conditions, the finance department must have a holistic view of the business.

Fundamentally, there needs to be a single source of trusted data that is always fresh and always live, meaning that you never have to manually recalculate to be sure the numbers are up-to-date or consistent across models and reports. To be truly effective, teams will need to integrate systems into a single source, including data integration from ERP, CRM and HR systems, to name a few.

According to the CFO Indicator, CFOs expect non-financial KPIs to comprise up to 30 percent of the total KPIs tracked in two years’ time, including data as varied as customer satisfaction, employee retention, supply chain contract renewals, and more.  Once operational and financial data are assimilated into a single source of truth, it can be incorporated into reporting, planning, and forecasting. By bringing these together, the office of finance can help business leaders across the organisation to spot trends early, which will help mitigate risk and open up opportunities.

That said, identifying non-financial KPIs can be a difficult process. It requires the finance team to dig deeply into the business and to spend time engaging in analysis that leads to greater business insights. This can be done by a member of the finance team spending time in another part of the business or through training programmes that aim to generate broader business knowledge. It is important that both finance and business users are involved in everyday planning and forecasting. This inherently leads to collaboration and consequently better overall plans, budgets and forecasts, as well as organisation-wide visibility into KPIs and business performance. After all, the impact of missed forecasts can be felt far and wide, from resource allocations and supply chain management to shareholder confidence.

“What-if” analysis and multiple scenario models

The macroeconomic environment is a vitally important consideration for any business, not least because it is a factor which no business can control. A business can, however, plan and model for different scenarios to ensure that it can withstand a variety of potential consequences. In 2017, this could be a change in exchange rates due to the shifting value of the Pound or taking into account a different level of taxation due to amended trade agreements between the United Kingdom and United States.

Ultimately, ensuring a business can remain agile and withstand the tremors of a volatile market is no easy task. With data that stretches across the breadth of the business—incorporating both financial and non-financial elements—it is possible for CFOs to get a real-time, accurate picture of what the business looks like in the current environment. If done effectively, the true expertise of the finance team can then be put into play, as it has the data to analyse, model, and forecast for the future. Creating “what-if” scenarios, based on highly accurate and reliable data, will be invaluable to businesses in 2017 as they traverse an unpredictable landscape.