6 Tips to Improve Law Firm Accounts Receivable Management

This includes all outstanding invoices that have been issued to clients, ranging from legal consultations to representation in court. One of the biggest advantages of leveraging tech, like a legal billing and payment solution, is how they can digitally automate your end-to-end billing processes. Automating A/R management has a number of distinct benefits for law firms. First and foremost, your attorneys will waste significantly less time on calculating and sending invoices, following up with clients, and chasing payments. There are several steps firms can take to reduce the time they spend chasing up late payments and make life as easy as possible for their clients. What’s more, with tools like Clio Manage, you can resolve potential chargebacks from one single portal in no time.

Automating Firm Accounts Receivables the Simple Way

• In such cases, providing alternate payment methods will prompt clients to repay.
• Collecting from clients may feel daunting now, but a few changes can help streamline the process and make things easier for everyone.
• Digital payments are also easy to schedule in advance, making it easy to set up future or recurring payments.
• The client should dispute directly with you since you still have some control over the process.

Isn’t it ironic that you earn money https://www.bookstime.com/articles/law-firm-accounts-receivable-management as a lawyer or attorney but face delays in getting paid by the clients? We know you give your best while working on a case, and it’s a bit disheartening when all your hard work goes down the drain as you send out the bills but get no payment or response. If not, it’s time to revamp your law firm’s accounts receivable processes.

• With LawPay, our sister company under AffiniPay, your firm can accept debit and credit cards, eChecks, and electronic payments while complying with ABA and IOLTA guidelines.
• That’s where efficient accounts receivable management works wonders for law firms.
• Modernizing your firm’s accounting without disruption requires a specialized technology partner you can trust.
• With Clio Accounting law firms can connect their bank accounts, manage their firm’s expenses, vendors, and payments, reconcile their trust accounts, produce financial reports, and more!
• Automating A/R management has a number of distinct benefits for law firms.
• Firms must ensure that payment procedures are clearly and completely communicated to clients so that there is no confusion about when and how payments will be processed.

Automate follow-up for outstanding bills

Sophisticated project management software integrated with financial systems ensures consistency and accuracy in reporting. Clear criteria for determining completion percentages, such as milestones like completing due diligence or signing contracts, are crucial for accurate revenue recognition. This makes it imperative for your law firm to start sending out invoices by e-mail and also include a link for click-to-pay. This is a convenient option not only for you but for your clients as well, leading to a decrease in the payment delays. In order to make sure that you are getting paid on time, you should provide payment flexibility to the clients.

Be Timely With Your Billing

• If you are calling once monthly on accounts under 30 days late, bump it up to once weekly for accounts over 30 days late.
• It handles all trust-related transactions in compliance with IOLTA rules and uses the payment industry’s most advanced security measures.
• Take some time to assess how things are currently running in your office and identify areas for improvement.
• Automated law firm accounts receivables software is designed with your clients in mind.
• This can be particularly problematic for firms that rely on repeat business or referrals from satisfied clients.
• That may seem acceptable, but that uncollected 15% can easily add up to tens of thousands of dollars in lost revenue.
• To maintain trust accounting compliance, firms must be very careful about tracking time correctly to avoid commingling earned and unearned funds, further complicating the A/R management process.

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. Believe it or not, your accounts virtual accountant receivable process begins with the first client consultation.

• Automatic invoice creation and predetermined schedules ensure timely delivery, eliminating late fees and potential client disputes.
• Your entire accounts receivable flow can easily be outsourced without having to change your current processes or make any technology changes to your current system.
• Stay on top of matters, communicate with clients, and view documents from your smartphone or any device with an internet connection.
• Breaking payments into smaller, more manageable installments benefits both firms and their clients.
• Make sure you accept payments in the form of credit cards and debit cards, along with providing them with the online payment portal options like PayPal, Google Wallet, and more.
• Data analytics can identify spending patterns, forecast future expenses, and guide resource allocation.

Negotiate payment terms

Implement automated communication features to keep clients informed about billing details, payment statuses, and upcoming deadlines. Being reliably transparent about these details is one simple way to increase trust, improve client relationships, and receive payments more promptly. Most of the law firm owners are of the view that if they keep on reminding their clients of timely payments, they may lose out on them. They do not want to make their clients uncomfortable by demanding money too soon and feel like they need to give an ample amount of time to them to make payments. Implementing these collection practices can dramatically improve your payments experience with new clients, but what about the old ones? Overhauling your client consultation process or improving the clarity of your invoices won’t affect the aged contribution margin accounts already on your books.

How To Level Up Your Law Firm’s Accounts Receivable Management

This helps set expectations and reduces the likelihood of delayed payments. LawPay is an industry-leading legal payment solution, designed to help streamline the legal billing process. With powerful and flexible tools to accept and manage payments, LawPay helps practices automate and streamline their A/R management. Manually preparing and sending invoices is both tedious and time consuming. If this manual process isn’t streamlined, it not only adds frustration for clients but delays payments. Electronic invoices can be calculated automatically, go out as soon as they’re ready, and can be paid instantly.