- 100% means every dollar your closers reported reached the account.
- $300,000 uncollected at 94% on $5,000,000 closed (illustrative).
- 93% of invoiced work collected by the average law firm in 2025 (Clio).
How do you calculate collection rate?
Collection rate is cash collected divided by revenue closed for the same deals and period, reported every Friday.
The denominator is revenue closed, so a deal won and never invoiced counts against the rate instead of vanishing.
| Rate | Formula | Measures |
|---|---|---|
| Collection rate | Cash collected divided by revenue closed, same deals and period | Share of won revenue that arrives |
| Days to cash | Days from invoice or due date to cash, minus the terms printed on the invoice | Speed of the cash |
| Failed payment recovery rate | Failed payments later collected, divided by all failed payments | Share of failures that come back |
What is a healthy collection rate?
The average collection rate for law firms in 2025 was 93% of invoiced work, according to Clio's Legal Trends benchmarks (page undated).
Closed revenue is the larger denominator, so the same firm scores lower here. No benchmark exists on closed revenue for service or coaching firms, so the healthy signal is a rate rising toward 100% week on week.
What does collection rate look like on real numbers?
A 94% collection rate on $5,000,000 closed leaves $300,000 uncollected (illustrative).
Half of that gap is $150,000 your closers already won, the cheapest revenue you will find, isn't it? So if 6% of last month's closed deals never cleared the bank, which client are you calling first?
Which seam does collection rate measure, and who owns it?
Collection rate is the headline rate of seam 07, CLOSE to PAYMENT, the handoff between the closer who wins the deal and whoever collects the cash.
On a 22 closer floor at a $70,000,000 a year business still running on the CRM Jon Weberg built.
It is a revenue seam because sales owns the signature and finance owns the ledger, so the fix is one named person from signature to cash, the rate read on Friday beside the committed to appeared rate and revenue per disqualified inquiry, with a failed payment recovery sequence under every installment. Who owns your deal between the signature and the cash, and how much calmer is Friday once that answer is a name?
Forty five minutes sets what your closers reported beside what reached the bank, in dollars.
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Pick a time on Jon's calendar.
What else do people ask about collection rate?
Is collection rate the same as the collection effectiveness index?
No. The collection effectiveness index measures receivables collected against receivables available. Collection rate here divides cash collected by revenue closed, so deals that were never invoiced count against it.
How is collection rate different from days sales outstanding?
Collection rate measures how much of closed revenue arrives. Days sales outstanding measures how long it takes. A firm can collect 100% and still wait weeks for it.
Should the closer own collection?
One named person owns the deal from signature to cash. Whether that is the closer or finance matters less than the name being written down and the rate reported every Friday.