Legal Buddies can also provide dedicated AR specialists to manage this function as part of your extended team. Managing accounts receivable can be a frustrating endeavor for law firms trying to maintain strong cash flow. Attorneys may find themselves spending valuable time chasing payments instead of focusing on client work. This not only affects productivity but also detracts from the quality of legal services provided. The right software will pay for itself in time savings and operational efficiency.

Promptly Follow up on Overdue Payments

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 Law Firm Accounts Receivable Management automatically, go out as soon as they’re ready, and can be paid instantly.

• Solutions that aren’t specifically built for law professionals may not adhere to the legal industry’s regulations.
• Modernizing the collections process can help your law firm create a more efficient workflow while freeing up your billable time.
• Consistent follow-ups on overdue invoices ensure that payments aren’t forgotten.
• You also have the option of setting up scheduled payments with clients, allowing you to stabilize your cash flow.
• However, the rapid expansion and popularity of digital payments have transformed the way modern businesses manage payments.

Improved efficiency

The software tracks all outstanding invoices and can provide real-time insight into aging buckets. This helps identify severely delinquent accounts needing immediate attention. Dashboards give visibility into collections metrics to analyze performance. Provide incentives for clients to law firm accounts receivable management pay invoices early, such as 5% off if paid within 15 days. Below are the benefits of upgrading your law firm’s process and moving to electronic invoices.

• This is where the financial relationship begins your hard work is now officially documented and ready for payment.
• It’s one thing for clients to pay late, but it’s another matter entirely when they dispute a transaction.
• If left unchecked, outstanding balances might outpace actual revenue, making it harder to make payroll and keep the lights on.
• Cybersecurity certifications and two-factor authentication are other features to look out for which will protect both your practice and your clients.

Integrate your software

With legal payments software, offering multiple ways to pay doesn’t have to be an administrative nightmare. Plus, with our Smart Time Finder, your firm can capture billable 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. Consistent communication can help you get on the same page with clients and minimize the chance of disputes or billing issues down the line.

• A thank you email is also automatically generated after payment to help improve relationships.
• TimeSolv allows law firms to do this to help them achieve zero ARs and get paid instantly.
• For many firms, outdated processes and inefficient workflows slow down day-to-day law firm operations and take time away from high-value client work.
• Hardworking attorneys invest huge amounts of time in their clients, pumping hours and hours into every case.
• This guide covers the main challenges of managing a law firm’s accounts receivables and steps to improve your process.
• For example, if you’ve billed $200,000 in the past year but only collected $160,000, then your collections rate is 80%.

Best Practices for Improving Law Firm’s Accounts Receivable Process

A law firm’s accounts receivable (A/R) represents all outstanding client payments for work that has been completed and invoiced. Some law firms consistently maintain a high A/R, whether due to strict payment terms, unresponsive clients, or a myriad of other potential reasons. But ultimately, regardless of how high a firm’s A/R is, the money remains only potential revenue until the bills are actually paid. Effective accounts receivable best practices help businesses get paid faster, maintain steady cash flow, and improve customer relationships. By streamlining your AR process with clear strategies and tools, you can minimize overdue invoices and enhance overall financial efficiency.

• Regularly evaluate metrics such as days in accounts receivable (DAR), claim denial rates and collection percentages.
• Efficient accounts receivable management is key to securing financial sustainability and delivering high-quality patient care in today’s healthcare climate.
• The American Bar Association’s Model Rules of Professional Conduct require attorneys to safeguard client property, including unearned fees.
• Efficient AR processes not only ensure timely payments but also strengthen customer relationships and streamline overall business operations.
• A modern and streamlined A/R management strategy can help law firms of all sizes increase efficiency, drive revenue, and improve client relationships.

Establishing open communication with your client is important to ensure your law firm’s accounts receivable management is smooth. Assess the effectiveness of your AR process regularly and implement changes as needed. Stay updated on industry best practices and technological advancements.

Choosing tools that are easy retained earnings to implement will make training and adoption more effective. Look for integrations with document storage systems like Google Drive or Dropbox. Your software should also work with billing or payment systems like QuickBooks, or better yet, choose a tool with built-in payment capabilities. Built-in cloud storage is another great option to streamline productivity and case management. File sharing and eSignatures are also made easier with integrated document management capabilities.

Pushing for Profit: Seven Ways to Improve Your Law Firm’s Profitability

So, if A/R management is so essential, why do many attorneys wait until the last minute to collect bills or let invoices go unpaid all together? Therefore, you must ensure your clients receive these invoices as quickly and easily as possible to increase the likelihood of them paying promptly. Traditional methods—such as sending paper bills through the mail—are unreliable in today’s hyper-connected, digital world. Paper bills can get lost in the mail, and receiving an invoice months after the work has been completed is frustrating for clients. A robust billing system like TimeSolv provides real-time AR tracking, making it easy to stay on top of outstanding accounts and adjust collection efforts as needed. Moreover, strive to maintain this level of open communication throughout the case.

Best Legal Accounting Software for Lawyers

Collecting from clients may feel daunting now, but a few changes can help streamline the process and make things easier for everyone. Below, we’ll go over the steps your law firm can take to avoid common challenges and make your law firm’s accounts receivable process more efficient. One of the biggest challenges in law firm accounts receivables processing is that the work is manual and often lacks standardization. By automating end-to-end accounts receivable operations, you could overcome these issues and more.