In our last post, we set the stage for a series of blog posts on the critical tracking, billing, and collection issues which affect law firm success rates, and impact your cash flow. This post is about putting the proper cash flow infrastructure in place form the get-go.
The first prerequisite to adequate cash flow is the creation of efficient back office systems. This includes creating a fixed schedule for activities such as time and expense tracking, and invoicing.
These procedures aren’t simply in place for your staff to know and follow, but they’re also necessary measures for setting client expectations. Let’s face it, you’ve got to train your clients to meet your standards – and both anticipate and pay their bills in a regulated fashion.
For law offices, time and expense entries should get tracked as they are incurred. Wait too long, and you’re likely to lose track of one or the other or both…and fail to recover all that you’re due. You could install a rule for time and expense entries to be entered (say) no less than 24 hours after incurred.
Likewise, law firm billing should happen on a systematic basis – according to a fixed schedule. You might compile your invoices on the 1st of every month, and mail them by the 3rd.
The same goes for invoice reminders. Your clients are busy, and might not get to their bills as promptly as you’d like. That’s why our legal time and billing software includes an automated system for reminders. You can generate these on a fixed schedule as well (say, the 15th of every month). That way, your clients know that you’ve noticed that they haven’t paid their bills – and get to it, lest it interfere with their matter.
Call Easysoft at 800-905-7638, and talk to a representative about your law firm cash flow management today.