Financial Management Strategies for Contemporary Law Firms

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. And those are not conclusion may or may not be be flattering to your firm. Conducting a potential new client consultation effectively is an art form. Get a 25% discount on one year of MyCase Advanced with LawPay and a $250 Visa gift card! Simply sign up for MyCase by 11/30 and process a payment of $500 or more through the LawPay integration within the first 30 days of use.

Growing Firms Need Accounts Receivable Automation

To lay a solid groundwork for key internal improvements, it’s essential to learn how you can effectively collect accounts receivable. Accounts receivable refers to the money owed to a company for services already rendered but not yet paid by clients. Rather than simply regarding A/R as a financial issue, it’s important 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. Your firm may face delayed payments due to client disputes, scope creep, or clients’ financial constraints.

Improving Your Law Firm’s Accounts Receivable Process

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. Consistency is key to establishing a routine and helping clients pay invoices on time. One of the tried and true best practices for collecting accounts receivables is consistent invoicing. If your firm bills on a predictable basis, such as the first of every month, then clients know when to expect them. This guide covers the main challenges of managing a law firm’s accounts receivables and steps to improve your process.

Big tech changed the game in how we run our everyday lives, so stay up to date with the latest available software solutions to keep clients happy.
Through automation, these time-consuming processes are streamlined, leaving you and your staff with more time to focus on paying clients.
You’ve already put up a good fight in the court, so we know you do not want to chase down your clients for payment.
Clients can also settle payments easily through third-party payment gateways like Stripe, PayPal, Flutterwave, or Wave.
Proper management ensures that resources are deployed efficiently to maintain profitability.

Learn how big tech has changed the legal industry

Accounts receivable are the payments that you haven’t collected from clients.
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.
For example, if you’ve billed $200,000 in the past year but only collected $160,000, then your collections rate is 80%.
You can automate as much or as little of the accounts receivable process as you like.
By automating these processes, you’ll improve working efficiency and therefore your bottom line.
This strategy involves setting up recurring, automatic payments, either via ACH transfer from a bank account or with a credit card.

A chargeback can be challenging since the outcome is up to the card company’s discretion. Regardless of whether the chargeback is valid or not, you’re still typically responsible for chargeback fees. There may be other cases where a client tries to dispute charges with you directly or by filing a chargeback on their card. A client may refuse to pay or dispute payments if they’re unhappy with the results of their case or if they don’t believe the charges align with what you agreed upon.

Offer a Variety of Payment Options

Efficient management of accounts receivable is crucial for the success and sustainability of any law firm. The timely collection assets = liabilities + equity of payments ensures a steady cash flow, allowing the firm to cover operational costs, invest in growth, and ultimately thrive. For legal professionals, chasing overdue invoices can feel like an unwanted billable hour. By implementing smart strategies, you can transform your accounts receivable (AR). In this article, we’ll explore strategies and best practices to enhance your law firm’s accounts receivable processes. Automation can make a big difference in how law firms handle accounts receivable, saving time and improving efficiency.

This can create unpredictable cash flow, particularly when clients delay payments due to disputes or financial difficulties.
If you send invoices on the 4th of every month, for example, schedule follow-up time on your calendar for the week of the 18th.
If not, it’s time to revamp your law firm’s accounts receivable processes.
Firms must adhere to Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) to ensure transparency and accuracy.
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Breaking payments into smaller, more manageable installments benefits both firms and their clients. It’s easier for clients to pay their bills—meaning firms get paid for their hard work without needing to constantly chase up. Below, virtual accountant we explore these areas in detail and outline how to improve the accounts receivable process at your law firm with Clio Manage. Expense allocation and management require a strategic approach to accurately track, allocate, and control costs. Legal practices face diverse expenses, from personnel costs and office overhead to technology investments and marketing efforts.

Start Collecting Your Law Firm Receivables With Ease

Assess the effectiveness of your AR process regularly and implement changes as needed. Stay updated on industry best practices and technological advancements. By implementing these strategies, you can transform your accounts receivable. You’ll save time, strengthen client relationships, and ensure a healthier cash flow, allowing you to focus on what you do best – practicing law. Tratta can be your reliable partner in collecting payments and enhancing client experience through personalized messages and reminders.