Tips To Improve Legal Practice Collection Rates
Nobody likes playing collection agency — even collection agencies! You don’t need to be demanding or inconsiderate to get your clients to pay up. CosmoLex legal billing software is a valuable tool for increasing collections and cash flow for your practice.
Accurate Billing – The first step in getting paid is sending an invoice. CosmoLex’s professional invoices are clean and easy to understand so are more likely to get a response than muddled and confusing bills. You can easily see the unbilled balance on each matter and can batch invoice with the click of a mouse.
Timely Follow-Ups – What do you do when the account is more than 30 days old? Here is where many legal practices fall down. Don’t be tempted to let it slide or give them a few more days. Studies show that polite reminders sent promptly greatly increase collection rates on overdue accounts. The CosmoLex law office billing program includes the ability to generate follow-up invoices asking for payment on overdue accounts.
Phone Calls – At some point you need to take a more direct approach. This is typically when accounts get 60 or 90 days overdue. You or someone on your staff should make a courteous phone call to the client to ask why the invoice has not been paid. There is no reason to be confrontational. Often clients are dealing with their own financial problems. Be ready to offer a payment schedule or even a reduction in cost if that’s what it takes to get an account paid off.
The Nuclear Option – A small number of your accounts will simply be uncollectable. It might be due to the client’s financial situation or even the client’s temperament, but in any case you know you aren’t making progress so you face two options. One is to turn the account over to a collection agency. They buy debts for pennies on the dollar and try to collect the full amount. You get only a fraction of what you are owed but you can move on with your life. An alternative is a complete write-off. You erase the bill and accept the loss. The advantage is this can create a lot of goodwill with the client, which can lead to future business from the same client — though you probably want a retainer up front in that case — or from friends and business associates.
Explore CosmoLex billing software for lawyers to discover how it helps you get a handle on your accounts and improve collection rates.