Do you need help with working through Law firm’s Accounts Receivable Management (ARM)? Do you want to master this process so it can significantly boost your cash flow? Managing accounts receivable is essential to maintaining the firm’s sustainability and success.

The key to mastering ARM is creating innovative ways for clients to pay. Timely payments ensure a steady cash flow at any business, enabling firms to cover operational costs, make investments, and ultimately thrive.

What is a Law firm’s Accounts Receivable Process ?

Accounts Receivable (AR) is vital to a law firm’s Legal Billing services. It is the money the firm has yet to receive for the service already provided. A high ARM can harm the firm; thus, the latter is preferred as it ensures financial stability by ensuring full bill payment.

This is how it works. First, a firm sends the client their invoice and waits until the payment deadline has passed. Of course, deadlines differ from firm to firm. When the firm realizes the due date has passed, it reaches out to its clients to remind them about their invoices. This reminder can be either by direct call or email.

Potential Ways of Improving Accounts Receivable Management for Law Firms

There could be several reasons for the large number of accounts receivable. Here, we will discuss the many potential reasons for high ARM and solutions to reduce them.

• Digitize invoice and payment transactions.
  Using the software, automating invoice and payment reminders would ensure that clients are reminded of their unpaid invoices before their deadlines pass. This ensures consistency and timeliness.

• Offer incentives
  A tricky way to encourage clients to pay their invoices early is to offer payment discounts. For example, you can get 5% off if payment is completed within 15 days. This ensures an improvement in cash flow.

• Option to make online payments
  Nowadays, everyone has a card in their wallets, ready to swipe. Creating a credit or debit card option would make paying bills the most convenient for clients. The firm can take responsibility for merchant fees or pass them on to clients.

• Introduce easy pay links and QR codes.
  Many easy-pay apps have QR code payment options, which are trendy among those who are always on the run. No one likes to waste time when making transactions. This option would improve cash flow and reduce a Law firm’s Accounts receivable.

• Build Client Relationship
  When clients trust the company they are working with, they are more likely to be happy to pay than a company they do not believe in. Thus, such an environment is necessary to satisfy clients and ensure a smooth cash flow.

• Outsource Collections
  Legal Process Outsourcing (LPO) is trending in the legal industry. It is known to help businesses shift their focus to their core competencies. LPO companies have highly skilled experts who efficiently complete tasks assigned to them. The best part about outsourcing a service is that you only have to pay for the needed task.

Manage Accounts Receivable Effectively !

• Set Clear Payment Policies
  Communication is mandatory in legal matters. Be straightforward about your payment terms and deadlines, so clients know everything before taking on the service.

• Use Accounts Receivable Aging Reports
  Tracking accounts receivable aging reports will keep the company on top of outstanding invoices.
  When invoices remain unpaid after their due dates, continue following up with clients until payment is made.

• Work With Expert Legal Outsourcing
  Expert Legal Outsourcing is known for its high-quality and cost-effective virtual legal assistants. Its goal is to ensure better cash flow by improving accounts receivable processes.

Rest assured. Expert Legal Outsourcing’s reputation for transparency, easy payment options, and competent service providers will guarantee improvement in your law firm’s accounts receivable management. You can focus on your core competencies instead of following up with clients.

Last Thoughts

Remember that a low accounts receivable means the law firm is financially healthy. A structured account receivable management strategy enhances a law firm’s cash flow and ensures a good client relationship.

Accounts receivable fall under Legal Billing Services. Expert Legal Outsourcing efficiently provides this service to many firms. By outsourcing these services, law firms can shift their focus toward their core activities and be free to practice law more often than being busy with invoices and following up on clients.