Improving the Accounts Receivable Process for Law Firms: A Guide

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. Rocket Matter’s legal practice management software offers a comprehensive solution law firm accounts receivable management for streamlining law firm operations, from intake to payment. By automating time tracking, billing, and client communication, firms can enhance efficiency, boost revenue, and improve client satisfaction. This all-in-one platform empowers legal professionals to focus on providing exceptional legal services while ensuring the smooth operation of their practice.

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An easy way to do this is to ask them how their weekend was or if they have anything planned for the upcoming weekend. Take note of what they say and reference it in following conversations. They’ll give you and your work greater value, and they’ll make you a higher priority. Furthermore, it will decrease confrontation if you have to follow up about a late payment. If multiple people are working on the matter, add additional details such as their name, title, and hourly rate specific to the services they performed.

Avoid surprises. Instead, manage client expectations

Clients typically appreciate what you just did for them—not what you did months ago. What’s more, a timelier invoice is more likely to reach them when they appreciate you and the work you’re doing. Otherwise, your clients will make judgments and conclusions on their own.

Maintaining Client Relationships

So, in the legal world, accounts receivable indicates the payment clients owe the lawyers or the law firm. You might have sent an invoice to the clients detailing the due date and the amount owed, but if it remains unpaid, it constitutes a law firm’s accounts receivable. Instead, leading law firms around the country are increasingly turning to digital accounting and payment solutions to increase cash flow and boost productivity. Not only is legal software helping to overcome age-old A/R challenges, but it’s also creating new opportunities to modernize billing processes and improve the client experience.

Automating the collections process can help your law firm create a more efficient workflow, while freeing up your billable time. Rather than simply regarding A/R as a financial issue, it’s important https://www.bookstime.com/ to understand the stories behind your overdue accounts. This requires regular check-ins with clients, taking a direct, straightforward, yet friendly, approach to payment collections.

• The reality is that law firms are businesses, and businesses need cash flow to survive and thrive.
• Between tracking billable hours, retaining and invoicing clients, and complying with stringent legal and ethical requirements, law firms have unique and complex billing needs.
• Automating A/R management has a number of distinct benefits for law firms.
• A solid A/R process that lets you stay focused on the important work.
• Accounts receivable, or AR, represents the money clients owe your firm for legal services you’ve already invoiced.

What to look for in a legal accountant

• But ultimately, regardless of how high a firm’s A/R is, the money remains only potential revenue until the bills are actually paid.
• If it has been received, send a gentle reminder that it’s overdue and give them a call to find out when it will be paid.
• As your law firm expands and you’re busy running a practice, you do not want to mourn over the pending payments from clients.
• Keeping A/R within a reasonable quota shows the “health” of your firm’s finances, reflecting its ability to cover expenses without needing additional credit or cash flows.
• Since the heavy lifting is done in the backend, you can easily customize every invoice to a client’s needs in a fraction of the time.
• And with legal payments software, offering multiple ways to pay doesn’t have to be an administrative nightmare.
• Not only is legal software helping to overcome age-old A/R challenges, but it’s also creating new opportunities to modernize billing processes and improve the client experience.

The term “accounts receivables” refers to money your law firm has earned and invoiced for but not yet received. Accounts receivables are listed as assets on law firms’ balance sheets. Fortunately, you can minimize your use of collection agencies and write-offs by re-engineering your process for collecting law firm receivables. You’ll simply need to adopt a few accounts receivable collections best practices, in return for an improved collection rate and stronger cash flow. When you’re busy serving clients, the last thing you want to do is stop to handle online billing and other administrative work. An accounts receivable automation solution prevents you from deciding between doing client work right now or making sure you get paid for work already completed.

Boost Cash Flow with Accounts Receivable Automation