No law firm can sustain without consistent revenue, and revenue suffers when firms carry a high Accounts Receivable (AR). When client invoices become overdue, the revenue owed to the firm is classified as AR. It is money owed to a law firm for services provided. The pay-for-service compensation model that many law firms utilize often creates a situation where bills go unpaid and AR increases.
From an accountant’s perspective, AR is categorized as an IOU from the client to the firm with an expectation that payment will be rendered within the fiscal year. But even though it’s recorded as a firm asset, that does not guarantee that the IOU will ultimately become revenue. On the contrary, many law firms consistently deal with low collection rates with invoices that remain outstanding in excess of a year.
The Pain of High AR
Consistently high AR can cause significant harm to law firms. Financial obligations like payroll, insurance costs, taxes, and office overhead may outpace the amount of revenue coming into the firm, which decreases the amount of available cash flow.
When firms make an effort to collect on overdue invoices, they often use strategies that waste significant amounts of time and resources, while yielding minimal results. Time spent chasing payments takes away from hours that would be better spent on more profitable tasks, especially when collections are being handled by an attorney. In addition, aggressive collections procedures can harm the attorney-client relationship, which has led many law firms to abandon their collections efforts altogether.
It cannot be stated enough that law firms need revenue in order to survive, and anything that harms revenue must be quickly addressed. So, practice leaders must implement tools and processes that promote lower AR and higher revenue. TimeSolv legal billing software has developed an AR process that helps law firms meet both goals by improving collection rates and securing greater revenue. Keep reading to find out how:
How TimeSolv Helps Law Firms Decrease AR
TimeSolv offers the legal community some of the most innovative e-payment features on the market. That includes TimesolvPay, which allows firms to securely store client payment methods and quickly process invoice payments in batches. The system was specifically designed to help attorneys increase collection rates through a modern and automated receivables process. With the TimeSolvPay technology, law firms can offer their clients more convenient payment options for more efficient collections. That gives law firm leaders the ability to better project firm cash flow while streamlining the receivables process.
Consider these effective system features:
- Specifically designed to meet the particular needs of the law firm community
- Next-day funding options provide law firms with quicker access to funds when compared with traditional invoicing and paper check payments. Faster access leads to increased revenue.
- Complete transparency in the communication of fees up front. There are no monthly, annual, industry, or hidden fees to surprise attorneys on the backend.
- Retainer and trust account management addresses some of the most challenging tasks of running a law practice. The feature makes it easier for law firms to properly handle replenishments and payments into client trust accounts.
- TimeSolvPay helps firms stay in compliance with their local rules by ensuring that associated payment fees are properly deducted from the appropriate accounts.
- Easy-to-implement automated payment capabilities that address a variety of customized billing and payment options, including payment plans and recurring billing.
- With secure and remote payment capabilities, contactless payment options provide clients with the convenience they expect. They no longer have to leave the comfort of their homes in order to come into the office to deliver their invoice payments. Instead, they have the convenience of making secure payments from anywhere, even their smartphones.
- With TimeSolvPay’s one-of-a-kind batch payment feature, law firms can instantly improve collection rates to increase revenue. All it takes is the secure storage of client payment methods, prearranged payment schedules, and a few clicks to run an entire batch of payments simultaneously. It is the quickest way for law firms to address high AR while bringing greater revenue into the firm.
Introducing the TimeSolv Zero AR Calculator
For more than a decade, TimeSolv has earned the trust of attorneys and law firm leaders, partly due to their proven commitment to the protection of data. Backed by this strong reputation for reliability and credibility, TimeSolvPay allows law firms to confidently accept both credit card and ACH payments either online or in-person, using highly secure technology.
TimeSolv’s proven methodology can achieve a law firm collection rate of 97+%. Their Zero AR calculator shows law firms how much more revenue they could be making with the implementation of TimeSolv’s AR processes. Attorneys simply enter their current collection rate, how many days to collect, and the average amount billed per month to access valuable information about potential revenue.
If you want to find out how much more revenue your firm could be earning, click this link to access the TimeSolv Zero AR Calculator.