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Have you ever considered how much time you and your staff spend on your billing process? It’s probably more than you think. Take a moment to write down all the steps and how much time each step takes. Are there any bottlenecks or unnecessary steps in the process?
You may find that your billing process is more cumbersome or stressful than it needs to be. Having an efficient billing process not only saves time and money, but will help convey a sense of professionalism to your clients.
Create a Billing Policy
Your billing policy can be referenced and followed to keep everyone in the office on the same page. Here are some ways to streamline your law firm’s invoicing, payment reminders, and collections.
- Create a template and process that includes when invoices should be sent to clients, how long descriptions of services should be, which expenses should be included on bills or written off, and any standard communications.
- Be clear about which attorneys need to review bills and if they need to be notified when bills are sent out. Also, determine if invoices are being sent to clients electronically, mailed, or in-person.
- Keep your accountant or finance team aware of the set days and times you are sending out bills and reminders. Make sure they know which bills still need to be collected and which bills are being written off.
- Develop a process for dealing with billing disputes and collections. Make the process simple and stick to it. The longer you wait to deal with unpaid bills, the more likely clients won’t pay them. Create a reminder letter/email message that can be easily personalized and sent to clients when they are behind on their bills.
Create a billing policy guide, so your clients understand when they will get a bill, how much time they have to pay it, which payment methods you accept, and what the consequences are for late payments.
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Invoice Descriptions and Codes
Using consistent billing codes helps streamline the invoice creation process by allowing you to choose prewritten legal service descriptions when drafting invoices. The codes also help you track the different types of work you are doing.
Descriptions of your services on your invoices should be long enough for your clients to understand what you did for them. They should feel they’ve received an excellent value for your services.
Track Your Time as You Work
You probably know from experience that trying to reconstruct how much time you spend on different tasks for different clients at the end of the day is hard to do. Timekeeping software, or something similar, will help you stay on top of your billing. Adding short notes while you work helps later during the invoicing process to justify your time and answer client questions about the bill.
Accept Different Types of Payments
Offering different types of payment options to your clients makes paying their bills easier and creates less hassle for you. Since many people use credit cards for most of their purchases, allowing your clients to pay their bills by credit card will likely lead to faster payment.
Since legal fees can add up quickly, some clients may not be able to pay their bill in full as soon as they get it. Offering a payment plan to these clients can ease the stress of paying their bills and make them feel better about retaining you as their attorney.
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Summing It Up
You and your staff can streamline your firm’s billing process with a straightforward policy. Keeping track of your time as you work, rather than at the end of the day or week, produces more accurate invoices without leaving any money on the table. Adding billing codes and descriptions that are easy to understand helps you track your work and lets clients better understand their bills. Multiple payment options, especially credit cards, make it simple for clients to pay bills faster.
Your billing process is just one aspect of your operations that can be automated and simplified. Put more time into your legal work by hiring a law firm-oriented marketing and communications agency, such as Law As a Business (LAB), to streamline your marketing efforts.
Increase the value of your law firm!
There is a right way and a wrong way to build and then exit a law practice. Specific decisions and actions build value while others do not. Watch this video and learn the steps you should take to create value within your firm and increase desirability to a potential buyer.