If you were watching Family Feud and the clue was “Ways businesses accept payment”, how long would it be before a contestant said credit cards. Survey says… not very long. If it isn’t the first answer given, it would likely be the second. The point is, one of the most commonly accepted methods of payments for businesses is by credit card.
In the legal world this isn’t exactly the case. Law firms have been reluctant when it comes to accepting credit cards, and for good reason. If you are a faithful reader of this blog you know by now that law firms can’t operate the same way most other businesses do when it comes to their finances. There are strict compliance regulations, and penalties associated with these legal accounting regulations can result in disbarment of your firm.
In this three part series we’ll take a look at the concerns associated with law firms’ acceptance of credit cards.
2 Areas Of Concern When Law Firms Accept Credit Cards
With most businesses having no issue accepting credit cards it is important to understand why law firms do. Concern surrounding the acceptance of credit cards can be grouped into two different sections for law firms; internal and external.
The external concerns around a law firm’s ability to accept credit cards largely has to do with the credit card merchants. It is an unfortunate truth for law firms that most credit card merchants are set up to work with restaurants and retail businesses. These merchants don’t have the unique compliance regulations in mind that law firms must be concerned with. In part 2 of this series we will address the specific needs law firms have that must be met by their credit card merchant.
Law firms do have to shoulder some of the responsibility when it comes to their inability to accept credit cards. They can’t depend solely on their merchant to effectively accept credit card payments. There are concerns surrounding the acceptance of credit cards that can only be dealt with internally inside a law firm. These concerns originate from your firm’s ability to reconcile your billing and accounting systems. In part 3 of this series I’ll identify and solve for 3 challenges your firm will face and must defeat when it comes to accepting credit cards;
- Invoice payments in your accounting system
- The handling of voids and chargebacks
- Managing credit card batching
Now that you understand the two areas of concern associated with credit card acceptance for law firms, I hope you’ll check back for parts 2 and 3. These posts will help you meet the challenges of credit card acceptance for your firm, allowing you to increase the ease in which your firm accepts payment via credit cards.