7 Best Practices for Accounts Receivable Collections

Earning money and collecting money are two very different things. It’s all too common for legal professionals to log billable hours, send out invoices to collect, and then fail to follow up and ensure that money is paid in full. The days get busy, things fall through the cracks, and money is left on the table.

In this article, we’ll cover what you can do to prevent this and ensure that your firm collects on every billable minute.

  1. Interview Carefully and Thoughtfully

Your accounts receivable process begins with the first client consultation. Conducting a potential new client consultation effectively is an art form. There should be many objectives in this meeting—you need to assess the legal situation, measure up the prospective client, sell yourself as a reliable advisor, and describe how the relationship will progress.

  1. Communicate During the Case

According to the ABA Journal, one of the most common complaints against lawyers is a lack of client communication. Clients who feel ignored are less willing to pay your invoices and may feel inclined to vent their frustration in an online review.

  1. Leverage Law Firm Billing Software

Law firm billing software, like LawPay, can enforce a specific invoicing cadence, minimize billing mistakes, and send automatic payment reminders. Each of these actions builds client confidence and improves your collection rate.

  1. Accept Online Payments

If you only accept checks, your client might delay payment because the account balance is low, the checkbook is in a drawer somewhere, or stamps are in short supply at home. Providing online payment options ensures quick and easy payment. A client is much more likely to pay when it can be done with just a few clicks of the mouse.

  1. Send Easy-to-Understand Invoices and Follow Up

Clients want to understand exactly what they are paying for. Be sure that you always provide clearly written, detailed invoices. You don’t have to outline your time to the minute, but you should separate larger tasks and include a summary of each.

  1. Be Timely With Your Billing

Clients routinely complain that they receive law firm bills 90 days or more after the work is done.

By then, the client likely doesn’t remember what you did and therefore doesn’t remember the value you provided. In that scenario, your client probably doesn’t feel motivated to pay your bill.

A timelier invoice is likely to reach them when they appreciate you and the work you’re doing. That’s when their motivation to pay you is at its peak.

  1. Utilize Scheduled Payments

Scheduled payments can be an effective solution for clients who are habitually late payers. This strategy involves setting up recurring, automatic payments, either via ACH transfer from a bank account or with a credit card.

Start Collecting Your Law Firm Receivables With Ease

You set the tone for collecting accounts receivable at your first meeting with a client. From there, you reinforce your payment expectations, either directly or indirectly, by communicating clearly and consistently with your client.

Want to learn more about how LawPay can help you manage your law firm’s A/R and drive more cash into your law firm? Visit lawpay.com/texasbar and sign up by May 31st to get 6 months with no monthly fee.