Best Accounts Receivable Management Practices for Lawyers
You worked hard to graduate law school and pass the bar. Maybe you worked as an associate for a larger law firm before deciding to hang out your shingle. Maybe opening your own law practice was exactly what you planned since day one of law school. Regardless of how you ended up in business for yourself, you need the best accounts receivable management practices. Here are some of the best accounts receivable management tips for your law practice.
In an ideal world, you’d enter your time into your billing software at the end of each work day. However, when you’re a busy attorney, that’s not always feasible. Yet, it’s incredibly important that you keep track of your time. You can certainly go the "old school" way and keep a notebook log of your time and enter it at the end of each week.
Additionally, determine before you open for business when you will send out invoices each month. Then, make sure that you stick to that. Predictable billing helps your clients. They know when to expect their bill. You can avoid the delay of traditional mail or the risk of your invoice being lost in the mail by providing online billing statements for your clients. This cuts down on your expenses, too. There are many great programs that provide online billing. You can even provide invoices and accept payments through PayPal. It’s easy to use and one of the world’s most trusted online providers.
No time for billing? No problem! Contact Attorney's A.R.M. today to find out how we can help you with your timekeeping and billing needs.
Payment Due Upon Receipt
Instead of giving your clients one or two weeks to pay their bill, you can make your bills due upon receipt. This is an extremely efficient way to get paid if you provide online billing. There’s no need for your clients to send a check through the mail. They can pay online or call your office to pay with their credit or debit card. This also helps minimize the risk of clients setting the bill aside to pay it later since they have time.
Online Payment System
Speaking of payments, there are multiple platforms that allow you to accept payments online. You can accept credit cards and debit cards through PayPal, FreshBooks, and other vendors. In fact, your own billing software may have an option for online payments. This makes it more convenient for your clients to pay you. They don’t have to buy stamps. They don’t have to go to the post office. They don’t have to drop off a check. You don’t have to worry about your hard earned payment being lost in the mail.
Also, talk to your bank about setting up an option for EFT (electronic funds transfer). Once you have this information, you can provide it monthly on your invoices. Your clients will then have the option to just deposit the funds directly into your account. They can only deposit money into the account. They will not have the ability to take money out of the account.
Set-up Good Credit Policies
As an attorney, you may decide that you want to provide services after a retainer is supplied or through a payment plan. If you opt to provide services on a payment plan, make sure that you have good credit policies. You can read more about how to set up your credit control policies by clicking here.
Read this great article on inc.com to learn more about the basics of credit control and their importance.
A strong, well-written (and adhered to) credit policy is one of the best ways that you can protect your accounts receivable.
Stay in the Know
When you decided to practice law on your own, you probably just wanted to practice law. You might not have been extremely interested in the many business aspects that come along with it. So, maybe you hired someone to help you with your accounts receivable. That’s good because accounts receivable management is very, very important. However, you must stay involved. You need to take the time each month to examine your own books. There is news story after news story of money being embezzled. Often, this could be minimized if the owners of businesses would take more time to look at what’s going on with their own accounts. So, whether you keep your AR in house and assign it to someone else or outsource