In part 1 of our blog series we discussed the two areas of concern when it comes to law firms accepting payment via credit cards. We identified those two areas as external and internal. The external concerns are largely associated with the credit card merchant a firm chooses to work with. These concerns were discussed in part 2 of our series.
In part 3 we are going to turn our attention to the internal concerns related to law firms accepting payment via credit card. Ideally law firms would be able to easily accept payment from clients via credit cards, but the truth is the complicated nature of and regulations associated with managing the financial aspects of a law firm make it anything but easy.
The internal concerns are largely centered around your law firm’s ability to reconcile your billing and accounting systems.
Three Challenges Tied To Law Firms Accepting Credit Cards
Invoice Payments in Your Accounting System- Because invoices are generated and distributed from your firm’s billing system, it can sometimes be a challenge for your legal accounting system to understand which invoices are being paid. Unfortunately unless these systems are either integrated with each other or manually reconciled constantly, there is no way for your accounting system to understand what invoice your payments should be attached to.
Credit Card Batching- When accepting payments via credit card, multiple payments can be made through one deposit. For most businesses this does not present an issue. For a law firm, this can create a serious problem. This means one deposit can represent funds from multiple clients. Law firms need to ensure that one client’s funds do not commingle with another’s. Credit card payments must be reconciled with your firm’s accounting system on a daily basis.
Voids & Chargebacks- It would be great if we could all claim to be perfect, unfortunately I don’t know that any of us can and your firm is no different. There will be instances where your firm needs to refund charges to a client’s card because a charge was made in error. It is imperative that these funds are not extracted from a trust account and are taken from a business operating account.
CosmoLex Is The Only Solution For Law Firms Who Accept Credit Cards
These challenges are all very real, and in the past it hasn’t always been easy to deal with such challenges. For that reason many law firms have completely dismissed the idea of accepting payment via credit card. That doesn’t have to be the case anymore, but your firm does need to employ a law practice management system that has the necessary capabilities.The only real solution is CosmoLex. A law practice management system that combines legal billing and accounting solutions into one.
By combining your legal billing and accounting systems your firm will be able to eliminate most accounting mistakes associated with manual data entry into multiple systems. Your firm will remain audit ready as CosmoLex automates the three way reconciliation process. Credit card payments can be easily processed in a compliant fashion through the integration of LawPay with Cosmolex’s law practice management system.
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