Boost Cash Flow with Accounts Receivable Automation

Once this date has passed and the firm still hasn’t received what clients owe, they will then reach out to gently enquire/remind the client about their invoice. An accountant who specializes in accounting for law firms is beneficial. Your best bet is likely to hire both a legal bookkeeper and a legal accountant. This is because a professional legal bookkeeper and accountant can help you manage your firm’s revenue and ensure your firm’s financial transactions are handled ethically and accurately.

• Make sure the client received the bill (your client portal will tell you immediately).
• With prompt follow-up on outstanding invoices, firms can reduce receipt times and improve operational efficiency.
• By using sound bookkeeping practices to keep accurate records and consistently review the firm’s financial statements on a monthly or weekly basis, you’ll see your firm’s true financial picture.
• Even the best accountant is privy to small mistakes, but the good news is that accounts receivables automation takes common human error out of the equation.
• In addition to offering flexible payment methods, digital payment solutions also offer more flexibility with payment terms.

Maximize Your Law Firm’s Financial Health with Expert Revenue Cycle Management

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. Simplifying the payment process encourages prompt payments and reduces friction for customers. The best way to do this is by providing online payment portals where customers can submit payments electronically.

Automate Invoicing and Payments

• With the Automated Bill Reminder feature, your attorneys can spend more time on billable work instead of chasing up payment.
• Through accounts receivable automation, businesses can expedite cash flow, streamline processes, and minimize the risk of human error in managing receivables.
• Our team will effortlessly adapt to your unique workflow to identify areas of opportunity and drive efficiencies across your practice.
• As a bonus, clearly communicating your payment policy minimizes confusion and lessens the likelihood of payment disputes down the road.
• Look into the pros and cons of both methods for your firm, then be consistent going forward to ensure your records are accurate and easy to track.

Use of reputable legal billing software that supports online payments and scheduled payments can streamline this process for you and your clients. With LawPay, you can accept bank transfers via ACH plus credit card payments online or in person. You can also set up automatic, recurring payments for clients who prefer a set monthly fee.

Accept Online Payments

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 law firm accounts receivable management and unbilled time in the format you prefer – PDF, Word, PowerPoint, and others. Complex billing arrangements, like contingency fees or tiered pricing structures, can leave clients confused and hesitant to pay. Clearly outline the fee structure in your engagement agreement, and provide detailed invoices that show how the final amount is calculated.

• Interestingly, tax deductions can ease the burden when used correctly—yet not all lawyers are up-to-date on their tax deductions.
• By establishing—and following—best practices for accounting for law firms like the examples below, you’ll be better able to help your firm stay on track.
• If you are calling once monthly on accounts under 30 days late, bump it up to once weekly for accounts over 30 days late.
• Accounts receivable management involves tracking and securing customer payments after orders have been placed.
• Here, A/R managers closely monitor metrics such as the average collection period, customer payment trends, outstanding receivables, and aging reports.
• According to ABA Journal, one of the more common complaints against lawyers is a lack of client communication.
• Following these simple tips will ensure transparency and minimize the risk of misunderstandings between the client and the lawyer.

Offering various payment methods, such as credit cards, electronic funds transfers (EFT), and mobile payment apps, helps cater to diverse preferences and makes the payment process more convenient. On the business side, consider implementing automation to process payments efficiently and reduce the need for manual data entry that can https://www.bookstime.com/ lead to errors. If you’re seeking a unified solution for case management and legal accounting, Clio could be the perfect fit. With Clio Manage handling your cases and Clio Accounting managing your financials, you can streamline operations and minimize manual entry errors–enhancing your firm’s performance from intake to payment.

Build Client Relationships

However, you work at a law firm, not a lending institution, so you need to make sure you get compensated. 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. To meet your clients’ expectations, having an efficient A/R system isn’t just an option; it’s a necessity. This is where new strategies, innovation, and technology come into play – helping your firm stay ahead of the game and keeping your focus on the law, not finances.

Bonus: navigate payment disputes with ease

Leverage Technology for Collections

Legal Standards Benchmarks and Best-in-Class Practices

• A phone call to say, “we’re still waiting on…” is better than no contact at all.
• So, in the legal world, accounts receivable indicates the payment clients owe the lawyers or the law firm.
• By implementing effective strategies, firms can enhance their collection rates, reduce the time spent on administrative tasks, and improve their overall financial health.
• They may struggle with frustration on both sides—and risk their profitability because of it.