Optimizing Accounts Receivable Management in Law Firms

Our platform will also notify your team when a client views or acts upon an invoice. Plus, with our Smart Time Finder, your firm can capture billable https://www.bookstime.com/ time you may have missed via a passive time-tracking feature. MyCase passively tracks activities done in the platform to ensure you’ve tracked time for all billable work. Now that you’ve made a great first impression, it’s important to maintain that level of service by keeping clients up-to-date on their case, billing, and account status.

Promptly Follow up on Overdue Payments

Ready to see just how seamless managing your billing, payments, and accounting can be? Invest in comprehensive training programs for staff to help them become proficient in using your accounts receivable automation software. You can automate as much or as little of the accounts receivable process as you like.

A Guide to Legal Trust Accounting in QuickBooks and Clio for Lawyers

Diana spent eight years as the Marketing Director for the Institute for Divorce Financial Analysts® (IDFA®), and she has been a Certified Divorce Financial Analyst® since 2006. By seamlessly connecting to your existing system, InvoiceSherpa removes all double entries and reduces the manual labor required from your team. 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. From there, you might escalate the frequency of telephoned requests for payment.

• Law firm accounting requires detailed record-keeping to ensure accuracy and compliance.
• However, cash accounting may not accurately reflect your finances since it does not account for accounts receivable or payable.
• A critical part of the accounting process focuses on analyzing financial reports and KPIs for your law firm to uncover critical insights and make informed business decisions.
• Automated law firm accounts receivables software is designed with your clients in mind.
• Consistent communication can help you get on the same page with clients and minimize the chance of disputes or billing issues down the line.
• Therefore, law firms must develop effective accounts receivable processes.

Best practices for implementing AR automation

Your client intake process offers an opportunity to discuss payment terms with your clients and set up your expectations. Use this time to discuss how you bill clients, when you send invoices, and how your firm collects payments. Invoicing and accounts receivable encompasses all the details of your business’s cash flow. Your invoicing and accounts receivable workflow practices have a substantial impact on your internal accounting systems and are essential for understanding your profitability.

• E-payments are convenient and modern options for clients and law firms alike, increasing the likelihood of getting invoices paid on time.
• You could also send a written notice that you’ll turn the account over to collections when it reaches 90 days past due.
• Each of these represents areas of business that likely see inefficiencies, which firms could improve by having better systems and processes in place.
• Managing receivables will not hurt the relationship, as long as it is handled professionally.
• Consistency is key to establishing a routine and helping clients pay invoices on time.
• However, this can create a complex web of billing schedules and terms that can be a nightmare to keep straight.
• Systems like Clio can help with invoicing and accounts receivable management efficiency by streamlining and automating processes that would typically be handled by you or your team.

Imagine if a lack of communication lets the clients assume that you’ve withdrawn from the case or, worse, think you’ve failed them. So, maintain regular communication with the client, even if you have no new updates. Keeping them in the loop will build your law firm’s integrity and trust, thus improving the chances of timely client payments. Adopting a more proactive and streamlined A/R management process has numerous upsides for law firms of all sizes. Better yet, digital legal accounting solutions allow even small firms or independent attorneys to take full advantage of the benefits modern A/R management has to offer. Clients who know what to expect are more likely to commit to paying for your services.

• If you’re unable to pay this debt in full at this time, please contact me to discuss a payment arrangement.
• By implementing these strategies, you’ll expedite payments, increase your firm’s bottom line, and reclaim valuable time for practicing law.
• While it can seem daunting, there are strategies to prevent this from happening.
• Additionally, consider establishing clear procedures for managing retainer balances, including consistent communication with clients about their remaining funds.

Tips to Improve Law Firm Accounts Receivable Management

Our MissionQuickFee helps professionals manage receivables and get paid for their work faster. With one convenient platform, professional service firms can accept online payments, offer financing, and manage client invoices. Implementing these strategies can transform your legal firm’s accounts receivable process from a headache to a well-oiled system. Next, let’s see how you can supercharge your accounts receivable management with exciting digital solutions. Providing clients with various payment methods can significantly improve your collection rates.

Step 2: Familiarize Yourself with Accounting Basics

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. Consistency is key to establishing a routine and helping clients pay invoices on time. One of the tried and true best practices for collecting accounts receivables is consistent invoicing.

Our research revealed that firms using online payments get paid more than twice as fast as those that don’t. Diving a bit deeper into the data, we found it takes a median of seven days for firms using online payments to get bills paid, compared to 15 days for those not using them. It may sound law firm accounts receivable management obvious, but the first step to reducing this friction is to make it easier for clients to pay their bills.

Streamlining Your Law Firm’s Accounts Receivable Process

Some of the main barriers include clients’ reluctance to pay bills and time or technological limitations that prevent lawyers from following-up on outstanding payments. By tackling these challenges, firms can open the door to new levels of success. Sending reminders to one client about pending payments may not seem inconvenient, but think about manually tracking tens or hundreds of them and giving a slight nudge about owing balances. That’s why you need a income summary well-organized law firm accounts receivable process. Do not worry if you’re only getting started; here are a few strategies to help you improve the accounts receivable process at your law firm.