Many law offices use QuickBooks to help them organize, track, and report on their financial transactions. While QuickBooks does help these firms maintain accounting best practices, track retainers, income, expenses, and other accounting information, it does not provide insight into what happens to your invoices after they leave your office or help improve the A/R management process as a whole. The management process behind Law office accounts receivable is truly what makes a difference in a firm’s ability to collect invoices and generate cash flow.
Sure, QuickBooks will help manage financials, but when it comes down to it, law office accounts receivable troubles are not financial, they are directly related to the internal collection processes. For instance, the following are processes problems that will likely lead to delayed or disputed invoices and slow cash flow in your organization:
- Not invoicing quickly enough.
- Not invoicing frequently enough.
- Sending invoices to the wrong person or place.
- Sending invoices with missing or incorrect information.
- Not communicating with clients until after the invoice is late.
- Relying on the use of “snail mail” to send invoices.
- Not utilizing call scripts, email templates, and other standard communications.
- And many more (read this article to learn 5 tips to improve your processes)
Why is the process so critical? Because the nature of the legal service industry is a chaotic one that generally lacks strict and standard payment rules and policies which can result in serious A/R management trouble.
Often times, the purchase of legal services involve complex relationships, alternative payment agreements, and complicated transactions and payment terms which can quickly result in invoice disputes due to mismanagement. On top of complex payment terms, many firms lack the A/R staff and technology necessary to handle such a big job. When relying solely on QuickBooks, collecting receivables truly is a time consuming process requiring a lot of manual work, spreadsheets, aging reports, highlighters, and manual data updates …and that’s before you even call your client about the invoice and do the follow-up work!
Accounts receivable management software works in tandem with QuickBooks to help law firms collect the money owed to them much faster than with QuickBooks alone. The software improves overall methods and processes to help collectors do their job faster and more effectively. With built-in workflow, automated customer communications, and deep insight into invoice and account status, your collectors can proactively manage collections, avoid invoice disputes, handle special payment terms, and much more.