What’s more tied to your law practice’s financial viability than your collections? From accepting credit cards to choosing the right tech, here’s how to improve yours.
We thank the team at Lawyerist.com for this helpful guest post. After you get this practical advice, you can check out best practices and beyond in the section on Billing and Collections in our Law Practice Startup Kit. And you can find a nonexclusive listing of time-keeping and billing products in the final category of Law Practice Management Software options in our Law Practice Startup Kit.
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Aging accounts receivable can be the bane of a law firm’s financials. To limit your firm’s number of accounts receivable (A/R) and improve overall collections rates, we encourage you to follow these timekeeping, billing, and credit card processing tips.
Timekeeping & Billing Best Practices for Your Law Firm
- Track your time consistently. The best way to manage your billable time is to track it consistently. Choose a system that you will use each day, whether by hand, a simple spreadsheet, or powerful billing and timekeeping software. Consistent timekeeping begets accurate invoices, and clients are more apt to pay accurate invoices more quickly.
- Succinctly describe each billed item. Help your clients understand that the tasks you completed for them are important. Do this by actively describing the benefit for each task on the invoice. Brief descriptions provide better value for your client while limiting questions about undefined billed tasks. A clearer understanding of tasks you completed (and billed for) leads to faster payments.
- Send invoices regularly. Client frustration about billing often stems from receiving large bills on an intermittent basis. Avoid this frustration by setting (and keeping) a regular intervals for running your entire invoicing process.
- Set a schedule to follow up on aging A/R. Determine how often to reach out to clients with outstanding invoices. Call and email them regularly to keep their invoices top-of-mind. This workflow begs for the creative introduction of templates and automation.
- Use timekeeping and billing software. A vast universe of software exists to help you better manage your firm’s billing, timekeeping, and invoicing needs. Existing solutions continue to improve, and new ones are born frequently. If your current system is failing you, review the features of the top software available and give one or two a test drive.
A Note About Credit Card Processing
If you are not yet accepting credit card payments for your services, it is time to step into the 21st Century. Clients expect the ability to pay by credit card. Simple and inexpensive solutions exist, and accepting credits cards is a great way to shrink your accounts receivable. And refusing to offer credit card processing likely means you are losing clients, too.
When it comes to choosing the right credit card processor for your firm, it is important to consider your needs. For instance, do you need a trust account-compliant solution (spoiler alert: almost certainly)? Do you want to accept e-checks and credit cards? Review all of your options before you make your choice, and we recommend you test-run your top two options with free trials.
As lawyers in Massachusetts, you should make sure you’re complying with our state’s ethics standards – and this article written by Constance Vecchione at the BBO can help.
Does Your Firm Need Further Help With Systems & Processes?
If you believe your law firm needs help streamlining more than just its timekeeping, billing, and credit card processing systems, consider taking our self-guided assessment, Lawyerist’s Small Firm Scorecard. This assessment was built to help you clearly identify your firm’s strengths and weaknesses and gather insight into what you need to do to set your firm up for success.
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This post was delivered by the Lawyerist.com team. Lawyerist is home to the largest online community of solo and small-firm lawyers in the world, where we help lawyers start, manage, and grow successful practices.