One of the greatest challenges that lawyers face currently, aside from keeping the work flowing, is getting paid on time. As work slows down and your clients are impacted by the shutdown of the economy, the likelihood of clients defaulting increases.
In our earlier blog “Tips for WFH” we recommended engaging with your clients regularly (this should be what you do always, not just during lockdown). It is in these conversations that you generate work and where you get to discuss your billing with a view to improving cashflow.
Expanding on this, there are a number of ways to improve cashflow.
Billing more frequently is a great way to smooth cashflow. Instead of billing all your current matters once a month at month end, consider staggering the billing of your matters in two or three tranches during the month, allowing for you to transfer from trust more frequently (if you hold money in trust) or stagger the due dates on your invoices so that you don’t run dry.
Checking what WIP is available to bill and generating invoices should also not take an enormous amount of your time. Drive Practice can generate billing runs at any stage of the month and the pro-formas to be held over can be carried forward to the next billing run at the click of the mouse.
Emailing invoices and statements
Sending invoices and statements in bulk from your system is also a great tool to efficiently initiate and continuously remind your clients that they need to pay their accounts. However, very often systems only provide that invoices and statements can be sent to a single email address.
Drive Practice provides for an unlimited number of contacts to be sent To or CC’d on invoices and statements so that the principal that you originally engaged with has the least amount of wriggle room when it comes to the “I didn’t get your invoice…” excuse.
Debt collection services
Many law firms outsource their accounting function and expect that debt collection is part and parcel of that accounting function (more on that later). Most accounting service providers do not provide this function. One of our Accredited Accounting Partners, Acute Accountants do offer this service and have great success at minimal cost to their law firm clients. You can check out their service offering here.
Owning the relationship
So often we get the complaint from law firm bookkeepers that their lawyers blame them for invoices not being paid. While accounting staff can do much to making sure that invoices get paid, ultimately each lawyer who holds the relationship with the client needs to own getting paid.
Having a system like Drive Practice, the dashboard has widgets that list the top 10 outstanding debtors, the productivity of the team, revenue and cashflow which can be configured to present insights for each member of the firm. When on a call with a client it is then easy to casually broach the subject of their account, which, coming from their attorney, is a powerful driver to getting paid.
Managing your business with the right systems can improve your cashflow. Choosing the right tools is the first step, understanding how to use these tools effectively is the next step, and we offer various training sessions on our software that are tailored to different role players in the organisation.
We’re experts at business systems and processes, and our cloud-based billing and accounting software for law firms will emancipate your firm from ever-growing costs of maintaining servers, backup systems and undergoing upgrades.
Call us now – we can even convert your existing data and implement a new system for you while WFH.