Need help to improve billing and turn your law firm expansion dream into reality? Sometimes your best-laid plans for the firm are scuppered, and you may have to refocus your attention on a system that works. Are you game for a change? We delve into its challenges and best processes that will get your law firm into gear.
Running a law firm isn’t like legal dramas; episodes of multi-million dollar clients, glamorous offices, and large teams belie a more complicated picture. Instead, running your law firm means you are directly shaping what success looks like.
Issues in your billing process and system are like the snakes in the Snakes and Ladder board game, and unresolved problems bring your law firm back a few steps.
To identify issues in your billing system, you should take a step back and reevaluate the following:
- Is there an efficient billing structure in place?
- Are my lawyers efficiently tracking their time?
- Are my lawyers taking too long to approve bills, or do they spend too much time editing the statements?
- Are the invoices accurate?
- Is there a system in place to manage clients and avoid late payments?
- Is there a proper reporting system in place?
Your billing process may seem straightforward at first glance, but there may be hidden bottlenecks that could incur unwanted costs. Despite the snakes and ladders of law firm management, accounting, and billing, you can take a few simple steps to improve your billing system.
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Maintain Good Client Relations
Before working with a client, discuss the agreed terms and conditions so that it’s clear and there are no surprises. This ensures you will be paid according to schedule and puts your client at ease. Some of the areas you should consider are:
- whether the fees are by the hour or by the case
- what the fees entail
- schedule of expected payments
- type of payment methods accepted
- penalties for late payments
- a framework for disputes and settlements
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Establish a clear billing system
Examine your billing process and identify its lifecycle from beginning to end. Next, set processes that work best for your firm. Whether the lawyers review the bills before the finance department takes over the invoicing process, whether the statements are emailed, and reminders are set, have a flow chart in place so everyone understands how it works. When your procedures are clear, it will help boost your bottom line and improve your clients’ experience.
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Use Science To Get Paid On Time
A study by Due, an online payment service, looked at 250,000 invoices sent in one year and revealed a few key insights:
- You are 1.5 times more likely to receive payment promptly if you add terms to your invoice.
- If your invoice specifies more than four people, the likelihood of receiving payment is reduced by half. Everyone opens the invoice and evaluates it, but no one takes ownership of it or settles it.
- An invoice with an organization’s logo is three times more likely to be paid.
- Suppose you include a due date to your invoice, your chances of getting paid on time increase by eight times. Although it might seem obvious, roughly one out of every four invoices sent does not have a due date.
- Only 18% of such invoices are paid if you have not received payment after 90 days.
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Automate!
Automation and digitalization can increase the capacity and growth of your firm tremendously. Harnessing a cloud-based legal practice, accounting, and billing system like CoreMatter can speed up your payments and save time. In addition, the system enables you to view the billing process from start to finish. It helps keep both your lawyers and finance department on the same page. With CoreMatter, you can:
- Help your lawyers to track their time with multiple timers.
- Process invoices with a few clicks, adjust hourly rates and billing, and export into standard formats like PDF, Excel, and Word.
- Schedule reminders to email clients for overdue payments using Memo
- Access vital accounting and billing documents such as Payment Management, Ledger Management, Debtor Ledger, and many more.
Your firm’s billing process is vital. Knowing how to improve the billing process efficiently can significantly impact your firm’s dependability and reputation. If clients are unhappy with the payment terms or find paying difficult, they will likely search elsewhere for their legal needs.
Billing can be complicated for a small firm. But it doesn’t have to be that way. You may be paid faster and focus on what matters if you follow these tips and use CoreMatter to simplify and improve your billing system.
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