Lance, Art, and Wayne have joined together to open a law practice but are struggling to manage their cash flow. They havenât yet built up sufficient clientele and revenues to support their legal practiceâs ongoing costs. Initial costs, such as advertising, renovations to their premises, and the like, all result in outgoing cash flow at a time when little is coming in. Lance, Art, and Wayne havenât had time to establish a billing system since most of their clientsâ cases havenât yet reached the courts, and the lawyers didnât think it would be right to bill them until "results were achieved." Unfortunately, Lance, Art, and Wayneâs suppliers donât feel the same way. Their suppliers expect them to pay their accounts payable within a few days of receiving their bills. So far, there hasnât even been enough money to pay the three lawyers, and they are not sure how long they can keep practicing law without getting some money into their pockets. Can you provide any suggestions for Lance, Art, and Wayne to improve their cash management practices?
