Lawyers experience this all too often—on cases that no one intended to be pro bono. Sadly, collecting law firm receivables may be one of the more challenging aspects of your legal career. If you send your invoices 2-3 months after the case is resolved, there is a chance that clients forget the value you brought to the case or what you did. Hence, it’s always best to send an invoice at a time when clients appreciate you and your work.
How to Improve Your Law Firm’s Accounts Receivable
Still not sure that an accounts receivable automation solution is right for your firm? According to our 2021 Industry Report, half of lawyer survey respondents claimed that accepting online credit card payments reduced the turnaround time https://www.bookstime.com/ for receiving consultation fees. In that group, 13% stated they received payments more than five days in advance. Using our proprietary software to assess your current billing processes and analyze opportunities to create efficiencies.
What is a Law Firm Accounts Receivable Process?
With the Automated Bill Reminder feature, your solicitors can spend more time on billable work instead of chasing up payment. Chances are, you don’t have time to pore over spreadsheets and sort through invoices to see who’s paid and who hasn’t. There are now law practice management systems that can help you know, with a glance at a financial dashboard, what’s overdue and for how long. Practice management systems also allow you to create easy-to-read reports to track your client receivables and unbilled time in the format you prefer – PDF, Word, PowerPoint, and others.
- This is to establish a more predictable cash flow and fuel the growth of your law firm.
- Unfortunately, the accounts receivables process isn’t always smooth sailing.
- This requires regular check-ins with clients, taking a direct, straightforward, yet friendly, approach to payment collections.
- With LawPay, you can accept bank transfers via ACH plus credit card payments online or in person.
- What’s more, with tools like Clio Manage, you can resolve potential chargebacks from one single portal in no time.
- With a holistic overview of your firm’s performance and growth, you’re empowered to be proactive rather than reactive.
Streamline Your Law Firm Invoice Process With Digitslaw
- Delayed payments, mounting overhead, and the constant pursuit of outstanding invoices—these are the challenges that plague many law firms.
- Scheduled payments can be an effective solution for clients who are habitually late payers.
- We have traversed those paths many times, and our hope is to make your trip meet all of your expectations and none of your fears.
- The most beneficial part is that finance teams can keep track of cash flow in real-time, minimizing the risk of duplicate entries.
- If you’re looking to improve your law firm’s accounts receivable process, Tratta’s embedded payments feature will be advantageous.
- From there, you reinforce your payment expectations, either directly or indirectly, by communicating clearly and consistently with your client.
- Additionally, consider establishing clear procedures for managing retainer balances, including consistent communication with clients about their remaining funds.
For this metric, using a longer timeframe to calculate (such as one year) will give you a more accurate idea of your firm’s financial health long term. Collecting payments presents a unique set of obstacles for law firms, and understanding these is the first step towards optimizing the AR process. Unlike many businesses that benefit from regular cash flow through repeat sales, law firms often rely on a mix of retainers, hourly fees, and contingency arrangements. law firm accounts receivable management This can create unpredictable cash flow, particularly when clients delay payments due to disputes or financial difficulties. Delayed payments, mounting overhead, and the constant pursuit of outstanding invoices—these are the challenges that plague many law firms. Unpaid invoices not only disrupt the firm’s cash flow but also burden attorneys with the task of chasing payments, diverting their attention from their primary focus—practicing law.
Conquer AR Challenges with Rocket Matter
What’s more, a timelier invoice is more likely to reach them when they appreciate you and the work you’re doing. Otherwise, your clients will make judgments and conclusions on their own. And those are not conclusion may or may not be be flattering to your firm. Conducting a potential new client consultation effectively is an art form. Stay on top of matters, communicate with clients, and view documents from your smartphone or any device with an internet connection.
A fixed-amount monthly payment is easier for your client to budget and provides steady cash flow for your firm. For internal consistency and external predictability, plan on billing clients around the same day every month. Even better, aim to have your clients receive their monthly invoice three to four days after the first of the month. This increases the chances the client has recently received a paycheck and therefore has funds available. Additionally, call every client who has not paid a prior month’s invoice and ask for payment. If you’re feeling reluctant, think about whether you’d rather ask for what you’ve earned or write off this client’s balance.
Offer Multiple Ways to Pay
Furthermore, it will decrease confrontation if you have to follow up about a late payment. If multiple people are working on the matter, add additional details such as their name, title, and hourly rate specific to the services they performed. Educate everyone in your firm about your policies and procedures, and explain them to the client. Have clients review and sign a copy upon intake, and send an abbreviated copy home with them. Perhaps the client did so in error, having not recognized the transaction and mistakenly deemed it to be fraudulent. Clients typically appreciate what you just did for them—not what you did months ago.
