Keeping the Money Coming In
Bookkeeping can be a pretty boring topic. I know that in terms of priority, somehow bookkeeping – and by that I mean billing – somehow ends up at the bottom of the list. Everything is more important – until it’s been three or four months and no billing has gone out. Guess what – that means no money is coming in, except those non-refundable retainers or fees on flat fee cases. And just wait until a client gets a 3 or 4 month bill in the email – oh the push back!!
We are not just talking about bean-counting here – we are taking about managing the finances that track the success of your law practice. This is pretty important stuff.
As I mentioned earlier, law firms are spending exorbitant amounts of time on everything BUT billing. Aside from the actual practice of law, bookkeeping and in particular billing is the second most important thing you can do for your firm.
Very few law firms use any kind of manual data entry anymore. Today, programs are out there that will allow you to track expenses and transactions, connect bank accounts and credit cards and integrate with other cloud based tools to get the best and quickest results internally.
What is the best result out of tracking time and expenses and attending to other bookkeeping tasks? Profitability! Done correctly, automating bookkeeping and billing can help your bottom line.
Billing is key to keeping the firm alive. Billing should close on the last day of the month without question. If you keep your time contemporaneously, at the end of the month it will be done. Remember, you probably cannot remember what you had for breakfast yesterday, you certainly cannot remember what you did on a case last week. If it does not get entered contemporaneously, chances are it will either not get entered or it will be entered with important information (time) missing.
Pre-bills are run on the 1st of the month. By the 5th of the following month pre-bills should be corrected and billing sent out. Funds owed to the firm from trust are paid over to the firm with appropriate notes. As clients pay bills, payments are entered and monies are put into either trust or operating. The trust account is reconciled, the operating account is reconciled and all records for the month are updated. And – you are done!!
Again, what is the hardest part of getting this job done? Getting everyone to have their time done at the end of the month.
Understanding how important billing is to the overall health of your law firm is crucial. Bookkeeping depends on there being funds there to carry on the “business” of the law firm. To be extremely efficient, you need to embrace the technology of billing. A billing program does not just provide monthly bills to your clients, it can extract and classify data, benchmark against others in the firm, and develop marketing strategies based on the insights that billing provides. This will enable you to optimize your overall law firm experience – and keep you from writing off balances when clients complain that they just got a bill for 4 months and how do they owe so much money??
If you need support with your billing or have any questions, please call me at 813-340-9569. Check out my website at: www.fromlawyertolaw.com. Or send me an email at: liz.managementconsultant@gmail.com.
