Tag Archives: legal billing and accounting software
When you were in law school, you probably assumed you’d spend your days practicing law. Unfortunately the reality of running any business is there are a host of other administrative details that take time away from the core function of the organization. If you spend too much of your day being a clerk instead of a lawyer, attorney time and billing software simplifies these tasks and gives you more time.
One of the leading mistakes small firms make is to not take fee collection seriously. They do the work, send an invoice and then just hope to get paid. A startling number of law firms have no systems in place to collect fees and end up turning delinquent accounts over to collection firms. This not only loses money but also effectively ensures the now-upset client will never bring business back. Here are a few ways you can use legal billing and accounting software like Easy TimeBill to get paid.
1) Easy Invoices – The first step is clear, uncluttered billing statements. Clients shouldn’t have to puzzle over confusing lists of charges, or hunt to find balance due. Clean billing statements are more likely to get paid, while confusing ones get put aside for future examination and are promptly forgotten.
2) 360-Degree Financial View – See un-billed and unpaid balances on all matters. Someone using the time billing software reviews the monthly totals and can immediately see which accounts are becoming problems and may need special attention.
3) Automatic Reminders – Prompt follow-up is critical on delinquent accounts. The longer you let a client languish without some kind of reminder, the less likely you will be paid. Software can automatically send out reminders to clients who are 30, 60, 90 or more days behind in their payments.
4) Late Fee Calculation – Late fees can provide a little extra pressure to encourage clients to pay on time, but determining the amount to charge can be complicated. Automatic calculations add the fee to the client account each month, considering the outstanding balance, new charges and any payments to determine the correct amount.
Collections matter. Even if you are willing to give a client some extra time to pay, you should still remind the client of outstanding balances every 30 days. Rather than avoiding collections — the way your clients are avoiding their bills! — or turning them over to a third party, use law practice management software to manage your firm more efficiently and improve your cash flow.
Is your law practice ready for an audit? Law firms are often the target of ethics inquiries and you need to be sure you can back up all of your financial transactions with an unimpeachable paper trail. Of course nowadays the paper trail often isn’t paper, and billing software for lawyers makes it easy to document your finances for your own protection.
Easy Time & Expense Entry – It’s a mistake to trust your own memory. If you try to reconstruct your work schedule or expenses after the fact, you will inevitably make a mistake. If you under-bill a client then it’s unfair to your practice; if you over-bill a client then it’s fraud. Cloud-based software allows attorneys to enter hours and expenses on their smartphones from any location.
Matter-Based Billing – It’s not enough to track your expenses overall, or even to track expenses by client. You must document all hours, expenses and payments by matter. Generic billing software can’t do this but legal billing and accounting software can. If a particular client files a complaint, then you can quickly bring up a specific report that shows just that client’s case transactions.
Trust Accounting You Can Trust – One of the leading sources of ethics complaints against lawyers is the mishandling of trust accounts. It is imperative that you document every penny of trust money and where it goes, and that you never even accidentally use one client’s trust monies to fund another client’s expenses. Many billing products have escrow software built in so you can manage your trust accounts just as easily as you manage your office accounts.
A Natural Disaster Is No Excuse – The night before the audit, a terrible fire roars through your office or a hurricane devastates the city. Is an auditor going to accept that you lost your records? No. Today’s electronic record keeping means there is no excuse for not having a full backup of all of your expenses and case files. Desktop-based billing solutions are easy to back up, and cloud-based products back themselves up automatically.
You can’t afford not to document every financial transaction your practice makes. No matter how honest and trustworthy your firm is, you might someday have to prove that to a judge. If you are still using manual bookkeeping or generic business software, then it is time for you to investigate dedicated attorney practice management software solutions.
Technology has helped streamline the modern law practice, but software tools can hurt your firm if used incorrectly. Legal billing and accounting software like Easy TimeBill gives you the option of emailing invoices to your clients, but should you?
Emailed invoices have a number of advantages for your practice:
- Low Cost - No cost for paper, envelopes, stamps or printer toner.
- Fast – Bulk billing allows you to send out all the month’s invoices generated by attorney time and billing software through email with a quick click. You can send late payment reminders just as easily.
- Environmentally Responsible – Save a few trees, not to mention sparing the environment all those nasty chemicals used in the paper manufacturing industry.
- Please Your Clients – Some clients simply don’t like old-fashioned paper invoices. With so many of us handling all our financial transactions on our computers, it’s easier to respond to an email invoice than a paper one.
With all those advantages it seems like email invoices are the way to go. Not necessarily. There are a few disadvantages to emailed bills.
- Easy To Ignore – There is something substantial about paper, something that demands our attention and makes a printed invoice harder to forget. In addition we are deluged with far more email each day than paper mail, so it’s easy for an invoice to end up in a spam folder or simply be overlooked.
- Insecure – Email is not a secure method of transmission and can be intercepted during delivery. Never include information such as a credit card number or Social Security number that could lead to theft of a client’s identity.
So which should you use? One option is to let your clients choose. Easy TimeBill time and billing software for lawyers can handle both formats so you can decide from client to client, or even matter to matter, whether you prefer emailed or printed invoices.
When clients get behind in their payments, we suggest sending paper bills even to your clients who prefer email due to the “easy to ignore” reason cited above. You could even send both an email invoice and a printed one to be sure you get the client’s attention.
Easy Soft’s law practice management software has been designed for the convenience of both attorneys and their clients. Download a demo of Easy TimeBill to try out our email billing and see if it is a service you want to add to your practice.
Law firms, like any business, depend on client referrals to generate new business. However unlike other industries, your customers aren’t usually qualified to judge whether or not you are a good attorney. Your image is going to have as much or more to do with client satisfaction as your legal background. Easy Soft attorney time and billing software gives any law firm the air of professionalism essential to pleasing clients.
Your Billing Reflects Your Practice
Many firms, particularly smaller ones, treat billing as an afterthought. Invoices go out erratically and there is little effort put into collecting late balances. The invoices are either sloppy handwritten affairs or stale templates that don’t reflect your professional image. Not only is this bad business — if you don’t collect your fees then you don’t make money — but your clients may think if you don’t care about your own billing, then how much will you care about their cases?
One option is to contract out your billing to a third-party. You can forget about the administrative details and focus on the practice of law. However, you also give up control over your invoicing and you lose the opportunity to work personally with clients.
The Advantages of Legal Billing And Accounting Software
Easy TimeBill is like hiring a full-time bookkeeper without the cost or headaches. Using dedicated lawyer billing software gives you features that no other billing software can:
- Customized Invoices – Tailor your invoices to reflect your practice’s unique style.
- Dedicated Legal Billing – Easy TimeBill shows information generic financial software doesn’t, like retainer balances and fees broken out by matter.
- Automatic Late Billing Reminders – Numerous studies show that gentle reminders greatly increase collections. The software automatically generates invoices on late accounts.
- Late Fee Calculation – Late fees are complicated to calculate so let Easy TimeBill do the work for you.
- 360-Degree View – It is shocking how many law offices have no idea of the state of their accounts. See all unbilled and unpaid balances as well as retainer balances at a glance.
Your invoices are often the last contact a client receives after a case is over. Don’t leave a client with a bad impression. Maintain a professional image by using law practice management software to administer your firm.
Trust account funds must be managed and maintained separately but it is neither practical nor cost effective to open separate accounts. One reason for this is the need to receive or remit monies on multiple matters in one check. Easy TimeBill attorney time and billing software with the optional Easy Trust module allows you to deposit or withdraw funds at the matter level while still minimizing the number of transactions between your practice and other entities.
As an example, let’s say you manage an escrow fund that is an interface between insurance brokers and an insurance company. Each matter needs to be administered separately and yet the insurance company isn’t going to want to deal with multiple checks. So if 100 brokers each make a premium payment, you deposit the premiums into the escrow and then write one check to the insurance company. In the process you need to be able to look at each individual broker account in the escrow software and see both the deposit and the withdrawal.
Separate Accounts Make More Problems
Some practices try to maintain a bank account for each escrow, believing that will prevent accidental payments of one matter’s expenses from another matter’s funds. While this might seem like a good idea, in practice it is an administrative nightmare. In the example above you would have to write 100 checks to the insurance company, one from each account. Although the record keeping would be easy, the cost in both time and materials to create, print and mail 100 checks would be unreasonable.
One Account, Multiple Matters
If all your trusts are in a single bank account then, after depositing the premium checks from the brokers, you can write one check to the insurance company. Would that make tracking each separate trust impossible? Not at all.
Managing multiple matters in a single bank account is easy with legal billing and accounting software. You can view the account as a whole but you can also view each matter’s transaction as though it were a distinct bank account. When you enter a withdrawal into Easy Trust, you select the matters that the monies should come from. You can either enter distinct amounts for each matter, or apply the same amount to all selected matters with one click. You can even select “All” to easily deduct funds from all trust accounts.
In reality, law practice management software actually makes it easier to administer a single escrow account with multiple matters than to manage separate accounts. Try a demo of Easy TimeBill and Easy Trust, or try the full products risk-free for 30 days so you can see how simple trust management is with the right tools.
Don’t make the mistake of dismissing alternate billing as something only for simple “file a couple of forms” cases. Law firms are creating flat fee arrangements for matters of all types and clients love it. Easy TimeBill billing software for lawyers is a critical tool for creating a fee structure fair to both your practice and your client.
The Problem With Hourly Billing
The billable hour is great for lawyers because they can be sure they will be reimbursed for their time. However it’s not great for the clients, who want to know what their expenses are going to be and fear that the bill might balloon up into an unreasonable total. Plus, as it turns out, hourly rates aren’t as good for attorneys as many think. In the end it isn’t what you charge but what you collect, and getting paid especially for cases that don’t close successfully can be difficult. When the client pays a predetermined fee up front, you don’t have to worry about collections.
Using Easy TimeBill to Determine Your Fees
Determining alternate billing rates is not a matter of pulling numbers out of a hat. If you’ve been using Easy TimeBill in your practice then you already have the information you need. Someone familiar with the time billing software reviews past cases and determines how much each client was billed. You might be surprised how many cases fall into a predictable range of values, and somewhere in this range is your flat fee.
If you haven’t been using Easy TimeBill you can do the same calculations using your current billing software or manual billing records but you may find it is more difficult. Another option is to start using Easy TimeBill today with the intent of reviewing data in six months or a year and converting to alternate billing then.
Once you set a fee you aren’t done with analysis. Use Easy TimeBill legal billing and accounting software to continue to track hours and individual expenses even though you are billing flat fees. Compare expenses incurred to fees charged to see if you are over- or under-billing. In addition, expenses change over time and you may need to adjust your fees if your other costs change.
Law practice management software gives you more control over your law firm. You can not only run your practice more quickly and efficiently, but you can analyze your costs and see that you are making smart business decisions. Try Easy TimeBill risk-free for 30 days to discover how quickly you gain control over your firm’s finances.