Do you know that delayed or extremely delayed payments from clients will certainly hurt your firm’s cash flow? However, there are a few steps that your firm can take to maintain a good and timely collection, hence maintaining excellent cash flow.
1. Your firm's billing department should make sure that they are sending their billing reports and invoices on time.
2. Your firm's billing department should ensure that all the invoices are compliant with your client’s billing guidelines.
3. Your billing department should be using a reputable billing software. Many law firms still rely on emails, excel sheets, etc. when calculating legal bills, this can lead to issues such as overcharging or undercharging, and is also extremely time-consuming. It’s no wonder that many law firms are on the lookout for a comprehensive billing system. With such a system in place, you will have all the billing units worked by your team in real time, i.e. no more scouring of email inboxes and endless excel sheets.
4. Your billing clerk should send timely payment reminders, 7 to 14 days after they have sent the invoices out. If your invoices are reviewed by a bill review vendor then this reminder should go even sooner, as chances are your invoices will be reviewed by the bill review team within days. I am aware of at least one bill review vendor who guarantees their clients a 24 to 48 hours turnaround time for all defense counsel bills submitted in their system.
5. Your billing department should change their billing software if this software cannot help them avoid/resolve bill-related disputes areas before they are submitted to your clients' bill review vendors.
Our recent research showed that 80% to 90% of the delayed payment is due to simply because a client objects to the invoice either fully or partially or the clients bill review vendors have made reductions on the invoices and the billing clerks have to spend time chasing their internal team members (the timekeepers) for further clarification.
Your billing system should be able to capture your timekeepers' daily activities and document their work in great detail. If this is done, the likelihood of any dispute happening is much lower, if not eradicated as such. Another way to help avoid a dispute is to quote your fees upfront, as much as you can.
Pay careful attention to the above and see how they influence your law firm’s bottom line, and then take appropriate actions. You will see a significant improvement in your firms' cash flow month by month.
Our platform Accurate Legal Billing was designed and built to support your Timekeepers and your billing department with the guarantee that all invoices prepared and submitted by your billing department will be 100% compliant with your clients' billing guidelines. No other billing software can make this claim.
Click here to read more about Accurate Legal Billing
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