Can You Front-Load Your Billings?

Source: The Managing Partner Advisor

Imagine the impact on your firm's cash flow if you were to bill clients for two-thirds of the fee before you even start the work. At least one firm is doing just that. The firm bills one-third of its audit fees when an engagement letter is signed, one-third when field work starts, and the balance on delivery.

It has taken the firm several years to ease clients into this system. (One approach was to offer it as an alternative to a fee increase.) Some clients continue to resist, and collection can be a challenge, but enough of the firm's clients have accepted this approach for the firm to enjoy a significant improvement in cash flow management.

For the complete blog entry, read “Negative WIP and A/R – An Accounting Error or a Best Practice?”

From The Managing Partner Advisor, the blog of Gary Adamson, CEO of Adamson Advisory, http://adamsonadvisory.com/blog, April 30, 2012.