How to Improve Your Law Firm’s Accounts Receivable

Collections workflow software centralizes all late accounts and structures follow-up activities to recover owed funds. That said, adding a platform like Invoiced to your tech stack and accounting process isn’t necessarily about workflow overhaul as much as it is about reducing and replacing workflows altogether. Invoiced was a fairly basic billing platform in the beginning, but after collecting customer feedback we added more bells and whistles over time. This helped us become the full coverage, highly flexible accounts receivable (A/R) software that we are today that is utilized by SMBs and enterprise businesses alike.

Allow clients to pay via credit card, ACH, and other electronic payment routes

• Our platform will also notify your team when a client views or acts upon an invoice.
• The key lies in maintaining a balance between automated efficiency and personalized attention, ensuring that technological solutions enhance rather than replace the human element of client relationships.
• After all, if you are performing quality legal work and burning the midnight oil at the office to try to make these clients’ lives better, you do deserve to be compensated for what you are doing.
• Automating payment reminders through software ensures you never miss following up on a late payment.
• If lawyers have a pooled trust account with multiple clients’ funds, they must also keep track of transactions made with each client’s funds.
• When a law firm accepts payment for a legal retainer, they have access to a certain amount that they can bill against.

With a holistic overview of your firm’s performance and growth, you’re empowered to be proactive rather than reactive. Accounts law firm accounts receivable management receivable are the payments that you haven’t collected from clients. This includes invoices that have been sent but aren’t yet due—as well as overdue bills. The ABA requires lawyers to maintain client trust account records for at least five years after work has ended. Records can include bank statements, checkbook registers, and any supporting documents related to the account.

Leverage Technology for Collections

Think of it as those unpaid invoices that are retained earnings just waiting to be settled. This process is foundational for a law firm’s financial health, directly impacting cash flow and overall stability. First, you must make it as easy and attractive as possible for clients to pay.

The Strategic Advantage Of Data-Driven Law Firm Financial Management

Setting clear expectations, invoicing promptly, and collections efforts can help minimize unpaid bills. A streamlined AR process can significantly transform the operations of a 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.

Failing to Differentiate Revenue and Income

Consumer Rights Law Firm, PLLC is a law firm that specializes in helping clients who are facing harassment from debt collectors in any form, including telephone communication. Rather than suffer alone, contact our office to begin the process to stop the Accounts Receivable Management harassment. When clients know precisely what they’re paying for, it builds trust and showcases your value. For instance, instead of listing “planned mediation” on their invoice, explain everything that went into that planning, such as research, interviewing experts, and developing strategy.

• Relying only on cash or checks might incur unwanted delays in client payments.
• A phone call to say, “We’re still waiting on…” is better than no contact at all.
• In summary, aged accounts receivable has to be addressed on a regular basis.
• A small firm may not be able to employ a full-time financial professional, but it is necessary to hire a professional who will work with the firm as needed.
• The main accounting methods are cash accounting, accrual accounting, and a hybrid of both methods.
• That said, adding a platform like Invoiced to your tech stack and accounting process isn’t necessarily about workflow overhaul as much as it is about reducing and replacing workflows altogether.

Stay on top of matters, communicate with clients, and view documents from your smartphone or any device with an internet connection. What should your policy and procedure manual contain for it to be effective? Sign up for a 7-day free trial of Clio real estate cash flow Manage today to find out for yourself.

It takes days to print paper invoices and paper checks, which then spend more days in the mail and sitting on desks. Electronic payments are far faster and much more convenient, often resulting in immediate or near-immediate deposits in your firm’s bank account. Credit cards have become an essential tool for clients to manage their finances, and they give clients the increased payment flexibility they need in fast-changing business environments. According to a Total System Services, Inc (TSYS) survey, 75% of people expect to pay for services with a credit or debit card. A separate survey found that as much as 79% of today’s clients expect professional service providers such as law firms to let them pay with their cards. Bookkeepers should establish a systematic tracking system for payments and overdue balances to manage accounts receivable efficiently.

This meeting should include a detailed review of payment expectations and the billing process. Believe it or not, your accounts receivable process begins during the first meeting with the client. Create this schedule by looking at the type of case, the complexity, and in consideration of the time and effort the case is likely to take. If the potential client does not have the funds that you charge, it’s almost always better to pass on the case. Otherwise, the case is likely to end up with a large balance owed at the end that will be unpaid.