- Know your Collection Rates – Do you know your law firm’s current collection rates? Far too many attorneys have no clue what their firm’s rate of the collection actually is, choosing instead to see these financial losses as a standard cost of doing business.
The average collection rate for a law firm is reportedly 88%. While that may not seem like such a bad percentage, 12% of uncollected revenue can account for tens and even hundreds of thousands of dollars. It’s not uncommon for a law firm to hold $500,000 in unpaid invoices over 120 days old. If your firm holds half a million dollars of outstanding earned revenue, isn’t that something you need to know?
- Embrace E-Payments – Though e-payment options are common within the general service industry, many law firms consistently hesitate to embrace these convenient and modern payment methods. The two most commonly communicated reasons for this hesitation are cost and complexity.
Some electronic payment platforms charge law firms exorbitant fees to use their services. Firms may find themselves paying fees to the credit card company, the bank, and the processing company, which can add up to significant costs. Also fueling this hesitation is a general misunderstanding of the e-payment process and the professional rules surrounding these transactions.
While these misgivings are understandable, they don’t have to be a deal-breaker when it comes to law firms embracing e-payments – especially if firm leaders choose a legal billing software that makes the e-payment process seamless and easy to implement.
- Collect and Store Client Payment Methods – Many firms encourage, if not require, clients to store a payment method with the firm for future payment of invoices. These arrangements benefit the client by taking away the burden of manually paying their bills for each payment cycle. Law firms benefit from receiving more timely and complete payments.
There are a few important considerations to keep in mind when storing client payment data:
- Use software that provides a highly secure environment for the storage of sensitive client payment info. Attorneys have a duty to safeguard client data, so you want to feel confident that you are taking sufficient measures to meet this duty.
- Establish clear payment terms with your clients from the beginning. Use your initial engagement meeting and fee agreement to explain when invoices will be sent and how payments will be collected. Then, include a detailed explanation of the schedule and payment terms around using these payment methods within your fee agreement.
Make sure you are following the specific rules of your practice jurisdiction:
- Incorporate Batch Payments – Batch payment procedures help law firms process multiple client payments with a few clicks of the mouse. It streamlines the payment process to save time, increase efficiency, and promote higher collection rates. Using the payment methods securely stored within the billing platform, firms can quickly run payments in batches instead of one at a time.
- Choose the Right Technology – When striving for zero AR, the billing and payment technology that you choose can make all the difference. The wrong platform can burden your firm with late and inaccurate billing, which can lead to client dissatisfaction and nonpayment of invoices.
In addition, many legal billing software options do not offer valuable features, such as batch payment processing or secure payment storage. If you’re ready to take the risk out of debt collection and achieve zero AR, make sure you choose software that offers the technology you need to meet your goal.
TimeSolv and LexCharge Help Law Firms Achieve Zero Accounts Receivable
TimeSolv legal billing software, along with LexCharge legal credit card processing, provides law firms with the tools they need to reach zero AR in the year ahead. TimeSolv has spent years streamlining the billing and the e-payment process so that law firms can get paid in full and on time. LexCharge specializes in electronic payment processing for law firms. The company understands the importance of properly managing law firm payments through operating and (IOLTA) trust accounts.
TimeSolv includes LexCharge among its integration options to provide law firms with a seamless credit card and ACH payment process that is built right into the platform. Using the systems together, law firms can benefit in numerous ways, including:
- Simple batch payment processing – With TimeSolv, users can quickly identify the clients with payment methods on file. They can then choose all of those invoices and run payments for each with a single click of the mouse. In seconds, an entire batch of unpaid invoices can be paid to get a firm’s AR down as close to zero as possible. TimeSolv is the only legal billing platform with the innovation of batch payment processing.
- Flat fees for electronic payments – LexCharge offers a flat fee system that is easy to understand and calculate. Their users pay 3.00% + 30¢ per transaction for all card types (including Amex) and $2.00 per eCheck transaction. There are no monthly surcharges or other unexpected fees. In addition, users only pay when they use the service.
Take the Risk Out of Law Firm Debt Collections and Get on the Road to Zero AR
TimeSolv makes it easy to get started on the road to zero AR. New users can take advantage of a free, no-obligation trial by clicking this website link. Subscribers can apply for a LexCharge account right through the TimeSolv dashboard. Once approved the two platforms integrate for an efficient invoicing and payment process.