Addressing outstanding accounts receivable of RVD law: An action research on enhancing billing and collection policies and procedure

• Main Author: Aduana, Gene Rose D.
• Format: text
• Language: English
• Published: Animo Repository 2017
• Subjects: Industrial management; Organizational change; Office procedures; Office management
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/5787
• Institution: De La Salle University

This action research aims to address the recurring issue on the outstanding accounts receivable. This issue has been burden to the Law Firm of R.V. Domingo (RVD Law) not just in matters relative to paying monthly and annually expenses, but it also in the expansion and plans of additional projects, eventually extending to the very fact of providing the lawyers their commission on their particular case or project. Collaborating with the Finance Team together with the owner as the decision maker, the whole team responsible for the enhancing the finance cluster specifically billing and collection carried out the four steps of action research cycle namely, constructing, planning, taking action, and evaluating action. Using the aging report of the Law Firm assisted the study conducted to determine that 43% of the total receivables have been due for more than 150 days. The longest outstanding account was due for 3,581 days which is equivalent to more than nine (9) years for the unpaid collectibles. Further, in going through the steps of action research, it was found that the billing and collection do not have a precise and strong terms and policy. Accordingly, the action research also shows that days sales outstanding (DSO) of the firm from 88 in November 2015 to 28 in March 2016 thus, quickly turning sales into cash, the firm had a chance to put the cash to use again more quickly.. According to (Dunn, 2011), Collection problems typically arise from failing to establish, explain and enforce effective collection policies. Lack of a firm-wide written collection policy should cover everything from the beginning of the relationship with the client, to the ongoing expectations of the client and the firm, to the payment of the final bill, and to some to alternatives for handling a fee dispute, (169). As a result, the team agreed that the concern on the issue on the uncollectible past due accounts can be attributed to the lack of effective billing and collection policies and procedure.