You can also schedule your free demo today, to get a virtual accountant personalized view of how Digitslaw works. Perhaps the client did so in error, having not recognized the transaction and mistakenly deemed it to be fraudulent. They’ll give you and your work greater value, and they’ll make you a higher priority. Furthermore, it will decrease confrontation if you have to follow up about a late payment. Clients typically appreciate what you just did for them—not what you did months ago.
Are Your Law Firm’s Accounts Receivable Processes Up to Date?
Calling clients for payment follow-ups, sending snail mail, and other manual A/R processes can create a lot of unwelcome stress and tension. If a practice has limited or inflexible payment options that make it inconvenient or difficult for clients to pay, it can make the situation even worse. Similar to the point above, it’s up to the attorney to keep track of billable hours and communicate it to the client. It goes without saying that when done by hand, this is incredibly time consuming.
Setting the Foundations: Accounts Receivable Management for Law Firms
Instead, devise a process for turning them over to a collection agency. This process should involve some actions on your part before calling the debt collector. Remember that your invoice has a critical objective, beyond getting you paid. The invoice is an important touchpoint, where you give the client visibility into the work law firm accounts receivable management you’re doing.
- Here are six actionable strategies to optimize your law firm’s accounts receivable management.
- The best way to improve your law firm’s cash flow while also increasing client convenience is ‘Automation’.
- Automated reminders feel less intrusive than direct calls and allow you to maintain a friendly tone while still being professional.
- If you’re feeling reluctant, think about whether you’d rather ask for what you’ve earned or write off this client’s balance.
- Metrics like profit per partner, revenue per lawyer, and utilization rates reveal productivity and profitability trends.
- Ideally, your firm’s time-tracking software should integrate with your billing and invoicing technology.
Streamline Your Law Firm Invoice Process With Digitslaw
Whether you’re using an app or manually jotting down time spent on tasks, you’re likely not tracking as much time as you could. Plus, it can take a lot of time to transfer that information to invoices. Keep the lines of communication open with clients regarding their invoices. Once your firm provides legal services, an invoice is created and sent to the client.
Tips to Improve Law Firm Accounts Receivable Management
- But while there are many digital payment solutions out there, few are equipped to handle the unique operational and compliance challenges faced by legal professionals.
- Furthermore, as time wears on, its value decreases because of inflation and the effort that went into collecting the payment.
- Customized financial metrics and dashboards offer deeper operational insights.
- Payment due dates vary from firm to firm—while some have 30-day payment due dates, others might be more lenient and extend this to 60 days.
- This will help them fully understand and appreciate the effort and time it takes to move their case forward.
- TimeSolv allows law firms to do this to help them achieve zero ARs and get paid instantly.
- But ultimately, regardless of how high a firm’s A/R is, the money remains only potential revenue until the bills are actually paid.
Attorneys are highly skilled professionals, so they shouldn’t waste their valuable time following up on outstanding bills. Unfortunately, too many firms struggle to optimize their accounts receivable processes, meaning valuable fee-earners spend too long chasing up overdue payments. Automating your law firm accounts receivables process will save you time and the effort needed to repeatedly follow up with multiple clients over an entire year. Fortunately, you can minimize your use of collection agencies and write-offs by re-engineering your process for collecting law QuickBooks firm receivables. You’ll simply need to adopt a few accounts receivable collections best practices, in return for an improved collection rate and stronger cash flow.
Providing clients with various payment methods can significantly improve your collection rates. Many clients prefer the convenience of online payments, which not only speed up the transaction process but also accommodate your clients’ diverse preferences. Regular and timely billing is essential for maintaining a healthy cash flow. By establishing a consistent billing schedule, you create a routine that clients can anticipate. This helps set expectations and reduces the likelihood of delayed payments. With so many ways to pay digitally, it can be hard to know which one is right for your clients.
