Play 6 Workflow Diagram (Visual)

This workflow moves unpaid invoices through three escalation tiers: Automated Outreach (Days 1-30), Active Collections (Days 31-75), and Legal Preparation (Days 76+). Each tier has specific triggers, actions, and decision points.

Critical Setup Requirements:

• Practice management system with automated email triggers (Clio, PracticePanther, or similar)
• Dedicated collections email address (collections@yourfirm.com)
• Certified mail account with tracking (USPS Certified Mail or Certified Mail Labels)
• Collections call script template (see below)
• Authority matrix defining who can pause/escalate at each tier

Day 1: Invoice Delivery

Send invoice via email with PDF attachment. Subject line: "Invoice [NUMBER] - Due [DATE]". Include payment portal link, ACH instructions, and credit card payment option. Log delivery in practice management system.

Day 7: First Reminder

Automated email. Subject: "Reminder: Invoice [NUMBER] Due in 7 Days". Body text: "This is a courtesy reminder that Invoice [NUMBER] for $[AMOUNT] is due on [DATE]. [Payment link]. Questions? Reply to this email or call [PHONE]."

Day 14: Second Reminder (Due Date)

Automated email. Subject: "Invoice [NUMBER] Due Today". Body text: "Invoice [NUMBER] for $[AMOUNT] is due today. Please submit payment via [payment portal link]. If you've already paid, please disregard this notice."

Day 21: First Past Due Notice

Automated email. Subject: "Past Due: Invoice [NUMBER]". Body text: "Invoice [NUMBER] for $[AMOUNT] is now 7 days past due. Please submit payment immediately to avoid late fees. A 1.5% monthly finance charge will apply to balances over 30 days past due."

Day 30: Personal Outreach Trigger

System flags account for manual review. Accounting manager reviews account notes, checks for disputes or payment plans, and assigns to collections coordinator for phone follow-up.

Pause Criteria at Day 30:

• Client has active matters in progress worth 3x+ the outstanding balance
• Client has paid within 48 hours of previous reminders in past 12 months
• Dispute or billing error flagged in account notes
• Partner requests hold for relationship reasons (requires written approval)

Day 31-35: Collections Call #1

Collections coordinator calls client. Use this script framework:

"This is [NAME] from [FIRM] calling about Invoice [NUMBER] for $[AMOUNT], now 30 days past due. I'm calling to understand if there's an issue with the invoice or if we can arrange payment today."

Document in call log:

• Date/time of call
• Person spoken to (or voicemail left)
• Reason for non-payment
• Payment commitment or next action
• Follow-up date

If no answer, leave voicemail and send follow-up email same day.

Day 38: Formal Past Due Letter

Send via email AND certified mail. Template:

Subject: PAST DUE NOTICE - Invoice [NUMBER]

Dear [CLIENT NAME],

Invoice [NUMBER] for $[AMOUNT] is now 38 days past due. Despite multiple reminders, we have not received payment or communication regarding this balance.

Outstanding Balance: $[AMOUNT]
Original Due Date: [DATE]
Late Fees Accrued: $[AMOUNT]
Total Amount Due: $[TOTAL]

Payment must be received by [DATE - 7 days from letter] to avoid further collection action. Submit payment via [portal link] or call [PHONE] to arrange a payment plan.

If this invoice is in dispute, contact us immediately with specific details.

Sincerely,
[COLLECTIONS MANAGER NAME]
[TITLE]

Day 45: Collections Call #2

Second phone attempt. If client commits to payment date, send confirmation email and set calendar reminder. If client requests payment plan, get approval from partner/CFO for terms (typically 3 monthly installments maximum, first payment due within 7 days).

Day 52: Escalation Decision Point

Review account with partner responsible for client relationship. Three options:

Option A - Continue Collections: Client is unresponsive or unwilling to pay. Proceed to demand letter.

Option B - Payment Plan: Client agrees to structured payment. Document terms in writing, require first payment within 7 days, suspend further work until plan is current.

Option C - Write-Off Consideration: Balance under $[THRESHOLD], client relationship terminated, cost of collection exceeds likely recovery. Requires CFO approval.

Day 60: Demand Letter (if Option A)

Send via certified mail with return receipt. CC firm's general counsel. Template:

FINAL DEMAND FOR PAYMENT

Invoice [NUMBER] remains unpaid after 60 days and multiple collection attempts. This is your final opportunity to resolve this matter before we pursue legal remedies.

Total Amount Due: $[TOTAL] (including late fees)
Payment Deadline: [DATE - 10 days from letter]

If payment is not received by the deadline, we will pursue all available legal remedies, including:

• Filing a lawsuit for breach of contract
• Reporting to credit bureaus
• Seeking attorney's fees and court costs
• Placing liens on business assets (where applicable)

Contact [COLLECTIONS MANAGER] at [PHONE] immediately to arrange payment.

Day 75: Legal Escalation Trigger

If no payment or response to demand letter, move to Tier 3.

Pause Criteria at Day 75:

• Client makes partial payment (25%+ of balance) and commits to payment plan
• Client provides documentation of financial hardship with proposed resolution
• Ongoing litigation or bankruptcy filing discovered
• Partner override with documented business justification

Day 76-80: Pre-Legal Review

Collections manager compiles complete file:

• Original engagement letter/contract
• All invoices and statements
• Payment history
• Email correspondence log
• Phone call log with notes
• Certified mail receipts
• Demand letter with proof of delivery

Day 81: Attorney Consultation

Meet with firm's collections attorney or outside counsel. Discuss:

• Likelihood of recovery
• Estimated legal costs vs. outstanding balance
• Client's ability to pay (asset search if warranted)
• Statute of limitations considerations
• Recommendation to proceed or write off

Day 85: Final Decision

Partner and CFO review attorney recommendation. Three outcomes:

Proceed with Legal Action: File lawsuit, prepare for potential counterclaims, budget for legal costs (typically $3,000-$10,000 minimum).

Settle for Reduced Amount: Offer settlement at 60-80% of balance if client agrees to immediate payment. Get release of claims in writing.

Write Off and Close: Document decision, update accounting system, consider reporting to credit bureaus if amount exceeds $[THRESHOLD].

Pause Collections If:

• Client balance under $500 and relationship is active
• Payment plan agreed to and first payment received
• Legitimate billing dispute raised with supporting documentation
• Client in bankruptcy (automatic stay applies)
• Partner override for strategic relationship (requires CFO approval)

Escalate Collections If:

• Balance exceeds $5,000 and client unresponsive for 45+ days
• Client made payment promises but failed to deliver twice
• Client closed business or changed contact information without notice
• Pattern of slow payment across multiple invoices
• Client terminated relationship and refuses to pay final invoice

Set up these automations in your practice management system:

• [ ] Day 7, 14, 21 reminder emails with merge fields for invoice number, amount, due date
• [ ] Day 30 flag for manual review (assign to collections coordinator)
• [ ] Day 38 certified mail trigger (auto-generate letter, print mailing label)
• [ ] Day 52 partner review notification (email with account summary)
• [ ] Day 75 legal escalation flag (assign to collections manager)
• [ ] Dashboard widget showing aging buckets: Current, 1-30, 31-60, 61-90, 90+ days

Key Performance Metrics to Track:

• Days Sales Outstanding (DSO) - target under 45 days
• Collection effectiveness rate - target 95%+ within 60 days
• Percentage of invoices requiring Tier 2 intervention - target under 15%
• Write-off rate as percentage of revenue - target under 2%

This workflow reduces manual decision-making, ensures consistent follow-up, and provides clear escalation criteria. Adjust day intervals and dollar thresholds based on your firm's client base and risk tolerance.