Uncollected bills and low bill realization rates dampen law firm profitability and cash flows. With numerous reasons why clients cannot pay legal bills on time, inefficient billing practices are part of the problem. Many law firm leaders are unable to maintain uniform processes to handle bill invoicing effectively.
Law firms wait 60 to 90 days for payment after sending invoices to clients. After invoices reach 120 days, firms discount overdue balances or write off debts entirely. Thus firms actually realise $.75 to $.85 on each dollar billed, ensuring serious cash-flow problems. This is countered by improving client billing process to ensure faster client payments.
Standardize Collection Processes
Improve client billing processes to get paid faster. Standardized processes promote efficiency and encourage faster payments from clients. With firm-wide standardized procedures in place, there is no guess-work involved and with detailed instructions, staff members can consistently follow up cases of delayed payments. Legal billing optimization analyzes your firm’s current billing process to identify areas of potential improvement to avoid billing disputes with clients and unpaid invoices. Creating a standard process may look to be time-consuming on the surface, but this one-time sacrifice pays off in the many years to come. Optimized legal billing requires effective workflow procedures, so take time to ensure faster payments and greater profits. De-stress the entire collection processes. Automated email reminders remove awkward phone calls while saving valuable firm time. The right billing technology allows firms to create customized payment reminder messages and predetermine when they can be sent. With minimal effort, reminders can be repeatedly sent until full payment is ensured.
Electronic Billing Improves Client Billing Process for Quick Payments
Depending on the law firm’s practice areas, electronic billing codes can effectively streamline billing processes and increase revenues. LEDES, a popular electronic billing system was created by the Legal Electronic Data Exchange Standard Oversight Committee (LOC) to provide standardized billing and accurately categorize legal tasks and expenses. A law firm’s legal billing process depends on effective invoicing and quick client payments. If your firm isn’t recording an appropriate level of revenues, consider improving procedures. The TimeSolv legal billing system improves your invoicing process. With a variety of features including electronic billing options, streamlined invoicing and online payment capabilities, TimeSolv helps your firm track payments faster.
Faster payments occur if payment processes are convenient for clients. With payment plans and scheduled payment options, clients can use cards to preschedule automated payments. Clients appreciate payment plans and recurring payment arrangements as payment of large legal bills becomes financially manageable. Your law firm benefits as your staff and lawyers spend less time following up overdue and unpaid invoices.
Interest Fees, Online Payments and Consistent Billing
Law firms rarely charge fees for past due invoices. Assessing overdue fees and penalties encourage clients to pay bills on time, avoiding extra costs. Most consumers prefer digital payments and firms without such options, lose benefits of faster and on-time payments. Electronic checks and credit card payments are hassle-free and your firm accesses money faster. An effective invoicing strategy is billing after events providing clients with great value, like a big win in court or a negotiation succeeded? Send invoices. Perceived value diminishes with passage of time after a successful event. Take advantage of any momentum by submitting invoices quickly.