Money talks in more ways than one. In the COVID-19 era, your firm needs a cash flow that is consistent and easy to manage. Modern online payment options let you handle billing and accept payments from clients without the hassle.
What does it mean for your firm, though? Here are a few things to consider.
The Importance of Billing & Collections
Billing and collections keep your firm moving forward. After all, client payments are how you make money and those funds help you grow your practice. Unfortunately, service businesses are notorious for collection challenges. The legal industry is especially prone to this, given that law firm invoices can be costly, causing people to put off paying them.
Another point to remember: if you’re not billing, or your billing processes are inefficient, you miss more than collection opportunities – you miss opportunities to establish relationships with clients. No one wants a pain point when it comes to paying their bills. (After all, no one particularly likes that task anyway!) If your clients are struggling with the simple process of settling their accounts, it can reflect poorly on your firm.
Proactive Measures to Improve Collections
So if you’re facing difficulties in your billing process, how can you offset this? There are a few key features in any effective billing program:
- Consistent and timely billing
- Clear, detailed, and unambiguous invoices
- Use of evergreen retainers to increase your cash flow, improve client experience, and streamline your accounting practices
- Discounts for early payment – and late fees for overdue accounts
- Offering flexible payment options for clients
All these practices are part of a client-centered approach to your firm’s billing and collection program. Focus on what will make the process easier and more understandable, and you can increase the likelihood of clients paying.
Implementing Modern Payment Options in Your Firm
Part of a client-centered approach to billing is making sure you’re using the right payment options. In the 21st century, this absolutely should include online platforms built into your website.
No client wants to set up a separate account or hunt down their checkbook to settle up with you. And no billing department wants to handle unnecessary software. That means your provider needs to smoothly integrate with your billing and accounting systems.
But there’s more to providing modern payment options than just online bill pay. No matter who you choose, you need to make sure that your payment processor is going to follow the unique requirements of law firms and trust accounts. Legal-specific merchants, such as LawPay, are equipped to properly deal with processing fees and chargebacks in a way that keeps you compliant.
Finally, it should go without saying…but we’ll say it anyway! Choose a provider that is easy to use. The easier it is to use, the more likely you’ll be repaid quickly.
Three Ways Online Payments are Changing Collections
This isn’t your grandfather’s accounting department. Online payments have forever changed the way money for services is collected. Here are three of the biggest impacts online payment has made.
More payment options for clients
It’s been a long time since the point-of-sale question has been just, “Cash or check?” Now it’s “Cash, check, debit, credit, ACH, PayPal, or Apple Pay?” (Or more – the options for payment are truly vast.)
The additional payment options also create a better way to take in retainers, particularly when it comes to retainer replenishment. If you have to wait for a check, it’s likely you’re going to have to do some more follow-up to get it taken care of than if you accept online payments. This payment method provides quick repayment of invoices (past due or otherwise) and takes the burden off of clients.
Pay anywhere (and any time)
We’ve all been there. You’re at your in-law’s house for Sunday dinner and suddenly you realize that you need to send an invoice to your client. If you wait until you get home, you know you’ll forget. Thankfully, you can handle billing from practically anywhere these days. In fact, online payment tools let you send, receive, and pay bills from any location, a COVID-era necessity for firms operating remotely.
While you should be billing on a regular basis, these tools offer up a way to stay on top of your billing at any time.
Truly, online bill pay options are a net good for everyone involved. The accounting department benefits when billing and accounting tools are integrated. Your clients benefit from ease-of-pay. And you benefit because everyone is happier.
Add value for clients
Firms should always be looking for ways to add value for clients and meet client expectations. Online payments are now absolutely part of the client expectation. According to the Federal Reserve Bank of Atlanta, in 2018 nearly half of bills (43%) were paid electronically.
A new option that consumers embrace is the “Charge Now, Pay Later” method, which lets customers commit to pay in installments. This approach benefits clients with financial concerns thanks to the flexibility of a longer timeline and shorter payments.
Looking for more ways to improve your law firm’s cash flow? Find out specific items to implement at your firm in our webinar Increasing Your Law Firm’s Cash Flow.
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