Even after a decade it still amazes me how the world of professional services still manage receivables in isolation; isolation from the world around them. In today’s professional service practice we see the invoice as the means to an end, and that is as far as we see. We never see the world from our client’s perspective. It is in this failure to see beyond the client that impedes our true potential in making a major impact in the collections of outstanding receivables.
In today’s professional services world we are far too introspective, as we only look at what happens within our firm and to our firm. We fail to see that our firm is part of a network, a local, regional, national and even global network. We don’t see or don’t appreciate that it is stimuli that happens in all of these networks that have varying degrees of impact on our firm. These stimuli affect our staffing, billing, taxation and most importantly our ability to collect our outstanding receivables.
Unless you have spent the last 8 weeks on some intergalactic space adventure you would have heard about, if not been directly affected, by the financial meltdown in the
There is a tremendous amount of research available that directly addresses the interconnectedness of peoples and economies around the world. But somehow we aren’t sensitized enough to bring it into our collections efforts. Today’s Current Asset Managers, those managing WIP and AR, must get out the dark ages and use all of the tools available to understand the economy and how it affects their clients. It is only through this understanding can they make educated strategic decisions on the collections of outstanding receivables.
Today’s Current Asset Managers should understand the impact the sub-prime crisis will have on their firm. Just in the last 4 weeks, several sub-prime lenders declared bankruptcy, and the remainder of which undertook mass layoffs. Simply looking at the most prominent, Countrywide, they issued a statement that they will lay-off 20,000 employees nationwide. However, that wasn’t enough ‘to get air flowing’; they needed a cash injection from Bank of America of 2 Billion dollars. Bring that home now, what does that mean to my law firm that has Countrywide as a client, or add a degree of separation. What does that mean to my client who has their commercial real estate financed through Countrywide and who is already debt laden?
A few years ago I gave a presentation on becoming more strategic in AR management to mid-sized law firms in the mid western
It think it is high time that asset managers stop the analysis paralysis, stop the mountains of reports, stop the highly reactionary year-end fiascos, stop behaving like we are in the dark ages! Today must be the day to shed the ‘ball and chains’ of your past! Recognize that you and your firm can add tremendous change to your bottom line by simply understanding your clients in light of what is going on in the world today. Whether it is toy recalls, sub-prime crisis or OTR cartage from
Whether you choose to believe it or not, it is a small world. The Milgram experiments of the late 1960’s demonstrated to a non-internet world that there are only 6 degrees of separation between any 2 people on the planet. That was over 40 years ago! It is a small world, listen to it and learn. Most of all bring that knowledge back to your firm and act on it, it’s your duty!