New York Debt Collection: We Lost the Client Because of Poor Billing Practices

Consulting clients about how best to insure prompt payment includes incorporating work flow, process, procedures, and controls. Invariably the road always leads back to our #1 tip, bill properly and on time. Mea culpa, not having follow my own advice, this New York Debt Collection attorney can speak from experience describing  why we lost the client because of poor billing practices.

Many expect debt collection firms to bill on a straight contingency fee. Software for the industry is set up with contingency fee billing.  Moving from our proprietary software to  software designed for the collection industry was a bonus for many reasons   The software worked great. Monthly remittances with detailed listing of all cases without fail, linked to our accounts to pay clients. the drawback?  The program could only handle contingency fee billing.

Clients who preferred hourly billing and hybrid fee arrangements had been billed separately by our bookkeeper. The process, time consuming at best, resulted in meticulously prepared bills which included time recorded, expenses incurred,  beautifully formatted , submitted to the client in the format desired.

It worked well. That is, until it didn’t.

Our client, a southern law firm, was responsible to handle portfolios of deficiency loans for a major bank.  The law firm client was expected to review work performed by local attorneys, FFG&N the local New York attorney, and,  transmit bills monthly from the local law firms to the bank client.

Our work performed on the cases was always stellar.  fortunately or unfortunately, we had many clients who began favoring alternative fee methods and we fell behind on billing.

Our “late” billing made it difficult for the forwarding law firm to perform for the bank as expected. The law firm would not risk losing the bank client due to our failure to submit monthly bills. It was our inability to continue to bill timely that ultimately caused us to lose the client.

We were focused on delivering quality results never thinking that our billing would impact the client relationship.

Hindsight is always 20/20.

Three reasons why we failed to bill as expected:

  1. Billing was a manual process: Although the packaged software only billed  contingency fee, all other billing was handled manually. There was no reason for this. Programming was  clearly a solution to the manual process.
  2. Improper staffing: When billing was manual,  because of various duties, we could not keep up.
  3. Not set as a priority: Necessary system conversions and upgrades took priority. As a result, billing, the lifeblood of the firm took a back seat.

Needless to say, we have learned from our experience and have automated the process insuring timely billing.  For further questions on New York credit and collection policies or debt collection, contact us (212)-686-0100 or email Jocelyn directly at Jnager@ffgnesqs.com

 

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