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 law firm accounts receivable management 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. Automated law firm accounts receivables software is designed with your clients in mind. Friendly payment reminder email templates are available to take the stress out of collecting money.
Managing Retainers
- Using succinct descriptions in the invoice can also help clients easily understand what you’re charging them for.
- Reviewing financial reports is essential to managing receivables, but read beyond the numbers and use the reports to understand clients’ stories and the relationships behind the numbers.
- By streamlining A/R, your law firm can maintain healthy cash flow and ensure financial stability, keeping you focused on what truly matters.
- Unfortunately, when nearly half of Americans struggle to pay bills, ensuring their lawyer is paid on time may not always be their highest priority.
Second, you need to minimize the time you spend following up on late payments. Isn’t it ironic that you earn money as a lawyer or attorney but face delays in getting paid by the clients? We know you give your best while working on a case, and it’s a bit disheartening when all your hard work goes down the drain as you send out the bills but get no payment or response. If not, it’s time to revamp your law firm’s accounts receivable processes. Rocket Matter’s legal practice management software offers a comprehensive solution for streamlining law firm operations, from intake to payment.
Embracing digital solutions for law firm accounts receivable management
A thank you email is also automatically generated after payment to help improve relationships. Given these challenges, effective accounts receivable management is crucial for law firms. By streamlining the invoicing process, offering convenient payment options, and implementing timely follow-ups on overdue accounts, firms can reduce their AR balance and improve liquidity. A modern and streamlined A/R management strategy can help law firms of all sizes increase efficiency, drive revenue, and improve client relationships. But while there are many digital payment solutions out there, few are https://www.bookstime.com/ equipped to handle the unique operational and compliance challenges faced by legal professionals. Modernizing your firm’s accounting without disruption requires a specialized technology partner you can trust.
IOLTA Account Overview and Best Practices for Law Firms
You could also send a written notice that you’ll turn the account over to collections when it reaches 90 days past due. Billing software built for lawyers also minimizes the time you spend on non-billable tasks and ensures compliant handling of trust accounts. Believe it or not, your accounts receivable process begins with the first client consultation. You can track the effectiveness of your A/R improvements by monitoring your collection rate trends over Online Accounting time. Lawyers experience this all too often—on cases that no one intended to be pro bono.
- Clients who feel ignored are less willing to pay your invoice and may feel inclined to take out their frustration in an online review.
- Collecting promptly on A/R is critical for your working capital – which keeps your lawyers and staff paid and your firm operational.
- Moreover, the software provides valuable reporting and analytics capabilities, enabling you to track payment trends and identify areas for improvement.
- Alternatively, a growing number of law firms are retaining an outside receivables consulting firm, concentrating in the legal profession, with which the firm works closely.
Pre-Collection Services
- If you only accept checks, your client might delay payment because the account balance is low, the checkbook is in a drawer somewhere, or stamps are in short supply at home.
- Second, you need to minimise the time you spend following up on late payments.
- A streamlined AR process can significantly transform the operations of a law firm.
- You’ve likely dealt with the headache of managing billing across multiple clients and services.
Always include nonbillable work as well – let them know how many hours you worked on their behalf without charge. This will help them fully understand and appreciate the effort and time it takes to move their case forward. Rocket Matter is part of ProfitSolv, a collection of best-in-class software solutions for professional services firms, allowing the freedom for growth and innovation. Using a product-centric and customer-first approach, ProfitSolv collaborates with firms to offer better client services. Prolonged payment delays can strain relationships with clients, leading to dissatisfaction and potential loss of future business.
Start Collecting Your Law Firm Receivables With Ease
Firms unknowingly lower their chances of being paid on time by including only a fraction of potential payment options. With LawPay, our sister company under AffiniPay, your firm can accept debit and credit cards, eChecks, and electronic payments while complying with ABA and IOLTA guidelines. LawPay serves more than 55,000 law firms around the U.S. and integrates seamlessly with MyCase. This makes accounts receivable management accessible for firms of all sizes, including solo practitioners and small and medium teams. A powerful online legal billing and payments solution prevents you from deciding between doing client work right now or making sure you get paid for work already completed. Implementing a solution that automates accounts receivable processes minimizes the possibility of human error, such as inaccurate invoices, duplicate entries, and overpayment.
