Billing and invoicing are typically not tasks that firms think of as getting easier over time. The more a firm grows, the wider its service offerings, and the more complex your accounting becomes.
However, billing and invoicing don’t have to be complicated or tedious. When it comes to billing and invoicing, taking the time to adjust your strategy and standard operating procedures can set your firm up for success and streamline your billing process.
Five billing and invoicing tips to improve your law firm’s payment process
There are a number of strategies to optimize your firm’s billing and invoicing, from how you communicate with clients to the systems you use to process payments.
1. Set clear payment policies and communicate them with clients from the start
No one likes a surprise, especially when it comes to billing.
Communicating your payment policies with your clients before signing them on or completing any billable hours can prevent conflict or disputes down the road. Establishing clear payment terms and conditions also establishes expectations for how the payment process should unfold and define obligations for you and your client.
Your payment terms and conditions should include:
- When payments are due
- What types of payment are accepted
- How late or missed payments are handled
These expectations are vital for building long-term trust between you and your client. When clients understand their obligations, they can:
- Clear up questions before they become an issue
- Understand their payment options
- Budget for legal expenses
- Inquire about alternate arrangements for fees
- Avoid late fees
All of these steps will prevent drawn-out disputes and negative client experiences. Your team should also be looped into payment terms and conditions so they can answer questions confidently. In addition to training staff, it can also be helpful to add this information to any internal knowledge base you may have.
2. Track time in detail to provide transparent and complete invoicing
Tracking time is imperative for billing your legal services, but not all time-tracking methods are created equal. With manual time tracking, data entry can be time consuming and lead to serious errors. In turn, this can create tension with clients who need to trust that their bills are accurate. If you don’t get it right, you may risk compliance violations.
On the other hand, time-tracking software can save attorneys a great deal of time and stress, allowing them to easily capture billable time in full detail so there are no questions about what goes into each invoice. Some software solutions can also connect to your phone or tablet, so you can track time on the go without missing a beat.
3. Send invoices on a consistent schedule
Consistency is the key to building habits, and this goes for your firm and your clients alike. Internally, if your team establishes a consistent schedule for invoicing, it can quickly become a standardized and, with the right tools, automated workflow for your billing staff.
At the same time, clients are more likely to pay their bills when they know what to expect. Receiving bills at the same time each month creates an established pattern: receive invoice, submit payment, repeat. Consider scheduling your invoices to go out following common pay days so clients are more likely to receive your invoice when they have sufficient funds to pay your bill without a second thought.
Look for accounting systems that allow you to create batch invoices with easy editing capabilities. Automating batch invoicing can make staying consistent much easier for your firm.
4. Use legal-specific payment processors for easy online payments
The less convenient it is for clients to pay your invoices upon receipt, the less likely they are to do so. Making the payment process as simple as possible for clients to pay will not only get you paid on time, but it will also cut down on the time and overhead required to follow up with delinquent payments and manage law firm collections.
Convenient online payment options help your firm eliminate cash flow and collections issues. One survey of legal professionals found that firms that accept digital payments by card get paid 39% faster on average. That’s a significant improvement for legal professionals looking to collect payments.
Quicker payment turnarounds also make it easier for your firm to budget by taking the guesswork out of your forecasted monthly revenue. These insights allow for more accurate financial planning and allow you to invest in the growth of your practice with less worry.
It’s key, though, for law firms to work with legal-specific payment processors. While there are many payment processors on the market, generic options don’t provide the compliance safeguards that ones built for legal professionals do, such as compliance with ABA and IOLTA guidelines.
5. Be proactive about reporting so you can spot problem areas in advance
Taking a proactive approach to problems is vital for a thriving law firm. But proactive strategies work best when they are paired with data, especially when you’re evaluating your accounting processes.
To optimize your accounting system, look at reports that help you:
- Identify your most valuable clients and practice areas
- Spot unbilled transactions and hours
- Review clients that may be causing repeat issues
- Identify any discrepancies or pain points in the system
- Stay on top of compliance
- Assess processes and look for opportunities to improve
By staying proactive, automating where it makes sense, and creating consistency for all parties, your billing and invoicing can become a well-oiled machine.
Improve your billing and invoicing with Tabs3 Software
Tabs3 Software offers a fully integrated suite of billing, accounting, and practice management tools designed to help law firms run more efficiently and profitably.
Tabs3 Software delivers:
- Compliant online credit card payment processing with Tabs3Pay
- Easy-to-use time-tracking functionalities
- Advanced reporting
- Calendaring and matter organization tools
- And more
To see how Tabs3 Software can help your law firm implement better billing and accounting practices, schedule a walkthrough demo or sign up for a free trial today.
One of the biggest challenges trust funds pose, though, is that they have very specific parameters. Law firms must be diligent in how they interact with and manage each trust account. There is a myriad of regulations and compliance requirements for trust accounts, and firms often find themselves with a clunky, inefficient, and frustrating trust accounting system.
It doesn’t have to be this way, though. There are numerous strategies to help your firm improve and streamline its trust accounting process, so everyone can breathe a bit easier.
Here are six ways to improve your firm’s trust accounting today:
1. Review your state’s requirements for trust accounting
Each state bar has rules and guidelines for trust accounting. Take some time to review your own state’s trust account requirements against your practices to find out if your law firm is doing what the state requires. This step is critical to lowering risk and liability for your firm. Any law practice found to mismanage trust accounts is at risk of disbarment, as well as legal action from your clients.
While trust account policies vary state by state, there are some commonalities. For example, every state bar association requires monthly or quarterly reconciliation for trust accounts. Many firms fulfill this requirement through three-way reconciliation, which compares your client ledgers, trust ledgers, and trust bank statements. The required reconciliation frequency will dictate your accounting schedule.
2. Keep trust funds separate from operating funds
Here is the golden rule of trust accounting: do not commingle your firm’s business and client accounts.
The American Bar Association requires that law firms keep any trust accounts separate from other client or corporate accounts. The money in a trust account is a form of prepayment for services rendered, but those funds still belong to your clients until you fulfill the payment terms. As such, funds in a trust account should not be reported as income.
Once your firm has completed your service agreement, any remaining funds in the trust account will be returned to the client. If there is any dispute about trust accounts, the state bar may require you to hold a certain amount of funds in your account until the issue is resolved.
3. Communicate your billing practices to clients clearly
Your clients come to you to protect their assets and interests. Transparent policies and clear communication support good long-term relationships with your clients and can assuage any confusion or misconceptions regarding trust accounting practices.
When you first start working with a client, prepare a list of frequently asked questions and billing procedures such as:
- Your firm’s billing practices, fees, and timeline
- How trust accounts work
- Why clients and law firms use trust accounts
- How trust accounts are secured at your firm, and the various protections in place for client funds
This is a great opportunity to educate clients, which will benefit your ongoing partnership in the long run. By providing user-friendly explanations of your billing practices and trust accounts to clients, all parties are on the same page about the processes in question. This establishes a foundation of trust for everyone.
4. Set up clear workflows and procedures for handling trust account funds
Practices for trust accounts need to be monitored for compliance purposes. Set clear workflows for handling trust accounts, such as when to withdraw funds and when to replenish retainers.
For example, it’s important to have proper agreements in place for the disbursement of trust funds. Without one, you could set up improper workflows. In turn, this could lead to you inadvertently withdrawing funds too early, causing you to breach your state bar’s regulations.
Trust accounting software can act as a safeguard against risky workflows. It can help law firms set up and track ongoing procedures and workflows for trust accounts. What’s more, it provides advanced reporting and easy-to-use dashboards that offer a bird’s eye view of your firm’s trust accounts.
5. Set up your trust accounting on a regular schedule
With so many moving parts, a regular trust accounting schedule will create a manageable system that your practice can follow throughout the year. Regularly scheduled reports and procedures ensure that your firm stays on top of any compliance regulations, no matter how busy your practice becomes.
For example, three-way reconciliations are required every month or quarter, depending on your state. Instead of running reconciliations ad-hoc whenever you remember to do so, firms can set up a regular schedule to review reports and run three-way reconciliations.
When you put a repeatable system in place, your firm can reduce the stress that may arise from last-minute accounting requirements. To further automate your trust accounting, consider using legal-specific trust accounting software for regular reporting and billing statements.
6. Use legal-specific tools that support workflows necessary for compliance
Manual reporting and tracking for trust accounts is an burdensome process for law firms that can take up too much time or fall victim to human error.
Accounting software tailored to legal practices can help law firms streamline their workflows and integrate their trust accounting practices into their law firm’s general accounting system. With the Tabs3 Trust Accounting Software, firms can:
- Track an unlimited number of trust accounts
- Execute three-way reconciliation for trust accounts
- Manage trust accounts from one system
- View dashboard summaries of account activity
- Engage in Positive Pay programs for your bank’s fraud prevention program
These system features take the guesswork out of trust accounts, so law firms can manage their clients’ funds easily and accurately.
Improve your trust accounting system with Tabs3 Software
Tabs3 Software offers a fully integrated suite of billing, accounting, and practice management tools designed to help law firms run more efficiently and profitably.
To see how Tabs3 Trust Accounting can help your law firm implement better billing and accounting practices, schedule a walkthrough demo or sign up for a free trial today.
When you work in the field of family law, you often work with clients who are experiencing difficult moments in their lives, working through life-changing problems such as divorce and child custody disputes. From splitting shared property or child custody to determining whether alimony is needed or how much child support is owed, navigating these matters can be an emotionally draining time.
As an attorney, your goal is to help your clients solve their problems, not add to their challenges by being disorganized or slow to respond. Support your clients by keeping things running smoothly with the right tools.
The best place to start? Choosing the right practice management software.
What is legal practice management software?
Legal practice management software is a type of software solution designed to help law firms manage their practices efficiently and profitably. Practice management software can range from providing all-in-one solutions to customizable packages designed for a law firm’s unique needs.
Functions typically included in practice management software include:
- Task and workflow management
- Contact management
- Calendars
- Time and expense tracking
- Reporting and analytics
Legal practice management providers may also offer billing, payments, trust accounting, and client relationship management features either as part of the package or as add-ons.
5 reasons family law firms need practice management software
Because family law matters can be complex and time-sensitive, staying organized is a challenge. With the right practice management software to support law firm operations, though, this is entirely possible.
Consider the following five ways your family law firm can benefit from legal practice management software.
1. Create repeatable workflows to provide a better client experience
Family law matters can move quickly. If you’re relying on inefficient workflows, it can damage the client experience. Missing a filing deadline, responding slowly to a client in crisis, and depending on inconvenient processes can all lead to subpar legal results, damage client trust, and impede your family law firm’s growth.
Legal practice management software can mitigate these problems by helping you create workflows that work better for your firm and your clients alike.
2. Stay ahead of the curve with built-in calendars
Staying on track with deadlines and schedules is vital for your family law practice, but you need more than a pen-and-paper calendar or an industry-agnostic calendar. To maximize your time and energy, your practice will benefit from an integrated calendar management system that syncs with your email and allows you to create firm-wide calendars. Other valuable uses of practice management calendaring tools include:
- Setting up recurring reminders for regular meetings and color coding events by staff member, activity, or matter type
- Applying federal, state, county, or even jurisdiction-specific criteria to reminders and due dates
- Implementing customizable security settings that determine which employees see appointments for certain attorneys and/or clients
3. Manage tasks more efficiently
While the calendar in your practice management software gives you a big-picture view of your schedule, a task management system helps you manage your day-to-day work. With task management features, you can establish repeatable workflows, delegate tasks, and communicate progress on matters. The beauty of task management tools is that they help you better collaborate with other attorneys and legal staff to ensure no one falls behind on important client work.
Your task management tools also help you provide a strong client experience. Task management enhances visibility as to matter progress, which means that your team can better answer client questions and provide updates. No more shuffling through notes or documents to figure out the status of a client’s case.
Automate tasks and save time
Speaking of workflows, there are few things more tedious than endlessly building and rebuilding tasks. Thankfully, this is a problem that practice management software can resolve for you. For example, within PracticeMaster, you can use the WorkFlows function to automatically start tasks and send reminders after an action is taken, including:
- Starting emails
- Adding appointments
- Assembling documents
- Displaying messages
- Running reports
- Launching other PracticeMaster features
- Launching other software programs
Not only does this save your team time, but automation leads to fewer errors and creates consistency in assignments.
4. Support better billing processes
When it comes to supporting profitability, your practice management software plays a significant role. Not only does maximizing productivity impact your billable hours, but it also helps you bill more efficiently when you:
- Implement robust time and expense tracking processes
- Convert activity into fees for billing
- Track the status of clients’ bills with matter management dashboards
- Access in-depth financial reports
- And more
5. Improve the client experience with better communication and greater convenience
When a client is dealing with a family law matter, they want their lives to become less complicated, not more complicated. With practice management software at your disposal, your law firm can do a great deal to simplify complex legal matters.
Email management
Communicating with clients is essential for family law firms, and a big part of communicating with clients is managing your emails effectively.
Good client email practices start with using an email management system that helps you stay organized. For example, PracticeMaster’s built-in email management software syncs with Outlook and allows you to add client emails to their corresponding matter. With this feature, you don’t have to go digging through hundreds of email threads to find where your last conversation left off.
Secure file-sharing and eSignature
Family law matters are time-sensitive. It’s vital to get signatures and send information as quickly as possible. Secure file-sharing and eSignature tools expedite the process by removing the need to print, mail, and return documents. Clients can sign a contract or scan and send documents from their smartphone, removing added hassle.
Besides being incredibly user-friendly, file-sharing and eSignature tools provide a higher degree of security than paper versions. With bank-level security for sensitive client data, your clients will feel safer sharing their data and you can rest assured that you’ll be protected from compliance risks.
Do your best work with Tabs3 Software’s full suite of legal practice management tools
There are lots of legal practice management software options out there, but Tabs3 stands out because it provides everything a law firm needs to run an efficient and profitable practice. Tabs3’s powerful features can be customized to meet the precise needs of your firm.
See for yourself why Tabs3 Software has been trusted by law firms for decades, and schedule a walkthrough demo with us today.
But when law firms aren’t paid in a timely manner? It can be a major problem.
When fees and invoices go uncollected and realization rates drop, it pumps the breaks on profitability, cash flow, and growth goals. Payment lags aren’t always the fault of the client. Inefficient workflows, poor communication, and inconvenient client processes all contribute to delays in payments. However, there are a number of simple steps law firms can take to get paid faster.
Law firms often wait weeks or even months to be paid after an invoice is sent, but there are ways you can take control over your payment timelines. Here’s where you can start.
Developing and communicating payment policies
1. Establish clear payment terms and conditions
It’s a best practice to set clear payment terms and conditions before signing on a client or completing billable hours. Clear payment policies don’t just provide you with legal protection if a client disputes charges. They also establish expectations for how the payment process should unfold and define obligations for you and your client.
These expectations are vital for building trust between you and your client. When clients understand their obligations, they can:
- Budget for legal expenses
- Understand their payment options
- Inquire about alternate arrangements for fees
- Avoid late fees
- Clear up questions before they become an issue
They can only do this if your payment policies are transparent, though. If your payment policies are long and packed full of legalese, your clients are less likely to follow them.
2. Share payment terms and conditions internally and externally
Once you’ve developed payment terms and conditions, your clients and your staff should be fully aware of them. For clients, this is something that should be addressed during the client intake process, ideally before signing any contracts or agreements. To ensure full transparency, consider including your payment policies on invoices.
Your team should also be looped into payment terms and conditions so they can answer questions confidently. In addition to training staff, it can also be helpful to add this information to any internal knowledge base you may have.
Better invoicing
3. Create user-friendly invoices
Invoices are the unsung hero of law firm profitability. They may seem like a simple document that tells what a client owes, but they are much more than that.
A good invoice helps your client render payment with confidence that you have completed legal work in accordance with your contract. When you omit necessary details, however, such as details of work completed or precise due dates, you can damage client trust and increase the risk of compliance violations.
This is where using legal invoicing software can be of great help, providing guardrails that ensure your invoices include critical information like:
- Name and contact information of the lawyer or law firm that is sending the bill
- Client’s name
- Description of the legal services offered
- Date the services were rendered
- Trust account balance (if relevant)
- Date of last payment (if relevant)
- Total cost of services rendered
- Terms of payment (e.g. due upon receipt, net 30, etc.)
- Date the invoice is sent out
- Any sales tax or other fees that are due
- A link to submit electronic payment
Make sure to include your logo, brand fonts, and colors on your invoice. A professionally designed invoice template enhances brand recognition and adds to your law firm’s credibility.
4. Send invoices out on time
When your invoices are sent late or inconsistently, your clients may think that the same rules apply to their payments (even if your payment policies are clear). As a result, they will be less likely to take their payment obligations to your firm seriously.
When you send invoices out in a timely and consistent manner, you give your clients the opportunity to budget for legal services, review their legal fees, and ask questions if necessary. This demonstrates that you’re committed to client service.
Offering client-friendly payment options
Even if you serve limited practice areas, your clients have a range of payment needs. One client may need support with setting up a payment plan, for example, while another client may want to schedule withdrawals. Providing client-friendly payment options can make it easier for clients to settle their invoices and for your practice to maintain a strong cash flow.
Consider the options below:
5. Provide online payment options
Paying with cash or check is becoming less and less common. Clients expect to be able to pay for services with debit and credit cards, no matter the industry. In fact, some younger clients may not even use checkbooks.
However, the legal industry has historically been slow to embrace credit cards. Law firms have been particularly cautious about the implications for trust accounting compliance and credit card usage.
Law firms can mitigate compliance risks, while still meeting client expectations, by working with a legal-specific payment processor that’s embedded in their practice management system, like Tabs3Pay. Not only does this streamline the billing process (saving you lots of billable hours every month), it can provide clients the choice to pay by:
- Credit card
- Debit card
- ACH bank transfer
- Scheduled payments
Electronic payment options speed payment up for several reasons. To start, they are more convenient for clients. After all, it takes less time to click on a link in an email and pay via credit card than it does to hunt down a checkbook.
Funds also reach your bank account faster. When clients pay via credit card, payment can be accessed in as little as 24 hours, depending on your payment processor.
6. Allow for different types of fee agreements
Fee-based billing is a legal industry stand-by, but it’s not the only option out there. What’s more, it may not necessarily be the best option for your practice. Depending on which practice areas you serve, you may find that clients can pay faster and easier if you implement different fee agreements, such as flat fees, retainers, or contingency fees.
If you determine that a different fee structure is the right fit for your law firm, avoid surprises with your clients. Update your payment policies and communicate changes to your clients immediately to avoid confusion, payment delays, or write-offs.
Increase your profitability with Tabs3 Software
Tabs3’s suite of client and law firm-friendly payment tools offers a fully integrated suite of billing, accounting, and practice management tools designed to help law firms run more efficiently and profitably.
Tabs3 Software offers:
- Compliant online credit card payment processing with Tabs3Pay
- Calendars and matter organization tools
- Easy-to-use time-tracking functionalities
- Conflict of interest searches
- And more
To see how Tabs3 can help your law firm implement better billing and accounting practices, schedule a walkthrough demo or sign up for a free trial today.
The end of the year is always an important period for goal-setting and preparation in a legal practice. From business planning to year-over-year analysis, Q4 is the time to set your practice up for success in the year to come, especially when it comes to finance.
While the end of the year is critical for any business, it is also a time to celebrate, travel, and spend time with loved ones. These things are important, and it’s equally important to account for these disruptions in your end-of-year goals. After all, the holidays can take weeks of productivity away from teams as they split hours between work and home.
At this time of the year, efficiency is the name of the game. With the right tools to help you accomplish your goals faster, it is in fact possible to achieve a balance between these competing priorities. From billing and trusts to accounts payable and long-term analyses, there are a number of systems that can help your team complete robust financial business planning, whether they’re in the office or working from home.
Stay on top of your goals and check off items on your to-do list faster by using the right software for your team. Tabs3 Platinum enables attorneys to work smarter, so they can spend more time doing what matters.
Deal with Overdue Accounts
Many business owners have experienced the frustration of trying to collect on past-due accounts. Before you begin, you need to know which accounts are past due and how late they are before you can take action. With Tabs3 Platinum, users can run advanced reporting on accounts receivable.
The Accounts Receivable by Timekeeper Report breaks down clients with receivables by working timekeeper. This helps your billing department understand which attorneys may need collections assistance, opening up opportunities to better support your team. The report also makes it easier to see how much each timekeeper is currently owed, which presents a clear view of priorities for collections.
If the customer is having cash flow problems, consider using Tabs3Pay to schedule payments ahead of time or offer payment plans for your clients.
Best of all, Tabs3 Platinum compiles all of your data for you faster than ever before. With its accelerator feature, users can get reports, filtering, and column sorting 10-30 times faster. For legal practices with large data sets, lots of users, or a congested network, this can save your team significant time.
Stay on top of appointments during the holiday season
It is all too easy to let meetings and appointments slip through the cracks with everything that goes on during the holidays. Emails can get lost in your inbox amongst the plethora of “season’s greetings” messages.
Rather than frantically tracking down colleagues or rummaging through your own inbox to find a meeting invite, use Tabs3 Platinum’s eNote and Exchange Connector features to stay on top of your team’s schedule even when you are away from the office.
eNote is an in-office messaging tool built into PracticeMaster. It allows users to send quick messages that won’t get lost in an email inbox, such as links to appointments or any other record for quick reference. When you receive an eNote, it pops up on your screen, and you can easily reply, forward, or dismiss it. With the Platinum Edition, you can send or receive eNotes on any internet enabled device.
On the other hand, Platinum’s Exchange Connector synchronizes PracticeMaster calendars and contacts with Microsoft 365. Through the Exchange Connector, appointments and contacts on your smart device are synchronized with PracticeMaster, even if your computer is off. By keeping information synced between devices, communication and keeping track of appointments is easier to manage.
As an added bonus, people at the office will be able to see appointments that you add on any device, so you don’t have to constantly go back and forth on scheduling.
Remote working for the holidays
The holidays are a time to gather with loved ones, relax, and look forward to the year to come. They are also a time when colleagues may rely on remote working to tie up any loose ends in the current calendar year. And with travel, remote working, and a hectic atmosphere, cyber threats are amplified during holidays. It’s important to ensure that your team is taking the proper precautions with sensitive financial and client data.
While remote working can be difficult without the proper software in place, Tabs3 makes it easy! Tabs3 Connect provides access to Tabs3 Billing and PracticeMaster when you are away from the office. Users can access the Matter Manager, clients, contacts, calendar, fees, and costs from a phone, tablet, laptop, or computer at home. So even if you end up on your in-laws’ desktop PC, we’ve still got you covered.
Furthermore, Tabs3 Connect allows attorneys to enter fees and costs, check their calendar, view documents, and more with ease from anywhere in the world. To protect data security, sensitive client information is stored on the law firm server, rather than on attorneys’ mobile devices.
To achieve secure remote access, pair a VPN with your remote access software of choice. Remote access software provides secure access to your legal practice management software through an internet connection between your office server and home computer. When configured properly, remote access software gives your legal staff secure access to all Tabs3 Software features from almost anywhere. With this method, only a minimal amount of data travels between attorneys’ home devices and office computers.
By working with a secure remote access software, you can spend less time worrying about security or data breaches, and more time achieving your end-of-year goals. With over 40 years of experience providing cutting-edge legal technology to law firms just like yours, Tabs3 software is built to uphold the industry’s strictest compliance and data security regulations.
Peace of mind features
To protect your data, Tabs3 Platinum enables HotBackUps, which allows users to back up data at any time, even when others are working. Users can start a backup whenever they want, or schedule them in advance to occur throughout the day. What’s more, they can control how many backups are stored on their server, and where the backups are stored.
Users can work without fear of data loss from poor network connections or power outages through the Auto-Recovery function. If something goes wrong, Auto-Recovery restores your data to a reliable, usable state, reducing the risk of data corruption.
See the results for yourself
You can achieve your end-of-year goals without working into the midnight hours or staying at your desk during the holidays.
Check out the Platinum Edition product page to learn more about what Tabs3 Connect has to offer. Request your free trial or schedule a walkthrough demo to see how Tabs3 Software’s fully integrated suite of software products can revolutionize the day-to-day functioning of your law firm.
Historically, law firms have been hesitant to accept credit card payments, largely due to security and compliance concerns.
This hesitance may have been justified in the past, but today’s attorneys have every reason to implement online payment processing. Modern legal payment processing solutions allow practices to protect clients’ card information while still allowing them the convenience of quick and simple online payments. In addition, firms are able to safeguard trust accounting practices and ensure adherence to compliance.
Here are seven key benefits of online payments and credit card processing for law firms.
1. Attract more clients
In the past, law firms shied away from accepting payments by card. But today’s clients see paying by card as normal in a professional context, and a growing number of your firm’s prospective clients expect to have the option. In fact, 84% of consumers now consider the option to pay by card as either a “nice to have” or a “must have.”
If you aren’t offering clients convenient ways to pay, they’ll be more likely to move on with another firm.
2. Build a strong client-attorney relationship
The convenience of paying by card can also boost client satisfaction. By accepting online credit card payments, you’re signaling to your clients that you care about them enough to make their experience with your firm as streamlined and effortless as possible.
Allowing your clients to make convenient online credit card payments also improves the chances they’ll pay quickly and reduces the need to follow up about their invoices.
3. Streamline workflows
Online payment processing can also cut down on the administrative hassle associated with collecting, recording, and allocating payments, especially when your payment processor is integrated with your legal billing software.
With the right software tools at your disposal, you can streamline billing and accounting processes by including payment links when you email your invoices, then use your legal billing software to automatically record and allocate payments as they come through.
It’s less work for your team than manually cashing and processing mailed checks, and it frees up more time to spend on service to your clients.
4. Get paid faster
The harder it is to pay your firm’s invoices, the more likely it is that those invoices will end up getting lost, forgotten, or put off until later. Providing clients a convenient and easy way to make payments can reduce the average time it takes them to pay and help your firm eliminate cash flow and collections issues.
In fact, one survey of legal professionals found that firms that accept digitized payments by card get paid 39% faster on average. That’s a significant improvement for legal professionals looking to collect payments.
These quicker payment turnarounds also make it easier for your firm to budget by taking the guesswork out of your forecasted monthly revenue.
5. Receive payments on retainer
Legal retainers are easier to manage if your firm is accepting credit card payments for trust or client funds deposits
That means you won’t need to waste waiting for a check to collect the money you have already earned. A good credit card processing solution for lawyers will also allow your firm to easily request funds when a client’s trust account balance gets too low.
It’s more efficient for the members of your firm and more convenient for the client, who doesn’t need to put in extra work to keep their trust account funded.
6. Compliant credit card payment is possible
Perhaps the most common reason for law firms to avoid credit card payments is the fear of violating the ABA’s ethics rules for trust accounting.
Under Rule 1.15 of the ABA’s Model Rules of Professional Conduct, there are strict rules governing the use of client trust/IOLTA accounts. Specifically, law firms have to take care never to commingle client and operational funds and to withdraw funds from a client trust account only as fees are earned or expenses are incurred.
Violating these regulations can come with significant repercussions, even if funds were commingled or withdrawn from a client trust account by mistake. For this reason, it pays for legal practices to be extra cautious when processing trust account payments.
The problem is that most generic payment processors withdraw their processing fees directly from the same account they deposit payments into. That means your client’s trust account funds are being used to pay processing fees, which is a direct violation of the Bar rules. And routing payments through your firm’s operating account won’t work either, since the ABA prohibits the commingling of funds between separate operating and trust accounts.
A legal software solution like Tabs3Pay can automatically withdraw processing fees from your firm’s operating account while depositing funds into the client’s trust account, so you can enjoy the benefits of trust credit card transactions without risking your practice’s professional standing.
7. Online payment processing is secure
The risk of security breaches is another reason law firms hesitate to invest in credit card processing. These concerns are justified given law firms’ responsibility to protect their clients’ confidentiality and credit card information, but today’s software solutions maintain a high level of security.
A reputable legal payment solution should allow your clients to log in to a secure online portal to make their payments, so your firm can ensure that card data remains encrypted and secure as payments are processed.
Your practice should look for credit card processors that are compliant with the Payment Card Industry Data Security Standard (PCI DSS), which offers an exceptional level of security and safeguards your clients’ credit card information throughout online transactions.
Modernize your law firm’s payment options with Tabs3Pay
Tabs3 Software is an industry-leading provider of practice management, billing, and accounting software for lawyers. With Tabs3Pay, we’ve created a payment processing solution designed to meet the needs of legal practices.
Unlike most generic payment processors, Tabs3Pay includes safeguards to ensure that your firm stays compliant with ABA trust accounting rules while processing credit card payments. Our legal-specific payment processing software also offers:
- Simple and transparent pricing
- Certified PCI-compliant security
- The ability to accept payments either by credit card or by eCheck
- A surcharging feature that allows your firm to pass on credit card processing fees to clients (available in states that allow credit card surcharging)
If you’re ready to get started with convenient, compliant credit card processing for lawyers, get in touch or schedule a walkthrough demo.
Reflect before you have to collect!
Over the course of the pandemic, clients may have been increasingly unable or unwilling to pay for services they received. Tabs3 Software has worked to streamline the processes of billing and getting paid.
A change in the payment behavior of your clients may have been part of the pandemic’s collateral damage, and may have had an effect on your business’s cash flow. To minimize future risk, a comprehensive review of policy, procedures, reporting, insight, technology, and people is recommended.
Review your policies, procedures, and reporting
Many firms do not have a consistent policy that guides their collections process. It’s important to invest time and resources into establishing a policy that guides email content and communication around payment requests, to avoid damaging client relationships.
Provide clear, accurate, and timely statements
Clients are more likely to pay quickly when the service is recent and fresh in their mind. As time passes, invoices become more difficult to collect.
A key step to optimizing your collections process is to bill via email. Not only can you then invoice customers right after services are rendered, but you won’t have to wait a few days for bills to make their way to customers.
Be certain to provide enough details in the invoice while keeping legal jargon to a minimum. Recording billable hours and fees correctly also makes it easier for your bookkeeper to do their job. Every feature in Tabs3 Billing is designed to facilitate accurate entry of time and money.
Good software helps you accurately track receivables, including the invoices you’ve sent, what’s been paid, and what invoices are outstanding.
In some instances, customers may dispute an invoice and refuse to pay if they’re dissatisfied with the services they received. The ability to Write Down or Write Off all or a portion of a client’s accounts receivable balance is another way Tabs3 can simplify the work administrators do every day.
Make payments as easy as possible
Don’t force your customers to pay in any specific way. The more options you give them, the more likely they will pay you on time.
Tabs3 Billing allows you to enter a payment link when you email statements, so clients can pay securely as soon as the email is in their inbox. Even better, payments are applied directly to client accounts so you don’t have to enter a thing. Tabs3Pay allows you to get paid faster, right from within Tabs3 Software.
Use this as a chance to connect
Every interaction you have with your client leaves an impression. This is especially true when it comes to collections. Whether it’s over the phone or through email, it can be a challenge to address a difficult topic. Put yourself in their shoes and think about how you would want to be addressed in the situation. In addition, use this opportunity to let them know you appreciate their business.
There are many reasons clients may not pay their bills on time. Forgetfulness, negligence, unclear or incorrect bills, and subsequent delays can create unwanted challenges that can put your business at risk.
See how Tabs3 Billing and Tabs3 Pay can make billing and getting paid easier for everyone in your firm. Schedule a Free Walkthrough Demo of Tabs3 Now.
An unwieldy billing process can eat into one of a law firm’s most valuable assets: time. Attorneys know this, but changing office workflows requires planning and is best accomplished through manageable steps.
We’ve put together our top ten tips for better billing. We hope they resonate with your team.
1. Track your time
If you track your time, it’s easier to estimate how long tasks take, determine effective billing rates, and evaluate profitability.
To improve timekeeping habits, start with a month. Commit to thirty days and make it a daily practice. Consistency is your friend.
2. Get tech to work for you
Law firms spend a lot of time on administrative tasks. Track and analyze how you work, then find tech tools to reduce the hours.
For instance, the Tabs3 practice management software, PracticeMaster, has toolbar plug-ins for the programs you use every day, making timekeeping less of a chore.
Those who work on the go can also get mobile access with Tabs3 Connect.
3. Make tasks easier with software
Billing software reduces manual and clerical efforts, helps the whole staff bill on time, and reveals how the firm is performing. Aim for software like Tabs3 Billing that captures expenses and tracks hours worked, hours to bill, and non-billable time.
4. Pre-bill review as if it’s you
When you’re reviewing pre-bills, ask yourself, “Would I pay this bill?”
Bills are important forms of communication because they go straight to the heart of client trust. Use bills as an opportunity to solidify appreciation for your services.
Clients are more likely to pay bills that are concise and clear about what is being charged.
5. Plan billing into your schedule
Establish a policy for timesheet submissions and pre-bill review that fits a regular billing cycle, works for timekeepers, and increases the odds for compliance.
Be prompt in your billing and clients will return the favor. Process invoices monthly and use email statements to expedite.
6. Streamline your cash flow with timely billing
Cash flow isn’t the same as profit and loss. A company can be profitable while experiencing cash flow problems that drive it to bankruptcy. Regular billing helps firms maintain a consistent cash flow.
7. Stay on top of collections
A collections survey showed that at three months delinquent, 27% of accounts receivable won’t be paid. By six months, that number goes up to 43%, and at a year, it’s 75%.
If you don’t currently have one, develop a consistent accounts-receivable program:
- Detail how you want customers to pay
- Include terms of payment in engagement letters
- Run monthly accounts receivable reports
- Act on past-due collections immediately
8. Keep good clients
The most successful law firms keep a list of top clients and check it regularly. Know who brings in the most revenue for your firm and whose business is actually costing you money!
9. Make it easy for clients to pay
Although some firms are still wary of credit cards, the traditional reason not to use them, credit card fees, is worth the expense in collection cases to get paid and be done with it. Additional concerns, such as trust accounting compliance, can now be addressed by using a legal-specific merchant like Tabs3Pay.
10. Automate when possible
Automation streamlines manual processes and improves cash flow by enabling you to accomplish more with fewer resources.
We hope these tips have sparked some good ideas on how to shift old habits, improve daily tasks with technology, and strengthen your firm’s billing processes.
To learn more about how Tabs3 can streamline your billing, contact us.
It turns out that not all trends are cyclical. Cash? Check? Like it or not, these forms of payment are going the way of the abacus and the typewriter.
Although there are good reasons to be cautious about adopting new technology, payment processing is one area where it pays to be ahead of the curve. After all, anything a firm can do to increase billable hours, reduce administrative work, and accelerate accounts receivable is good for the bottom line.
It isn’t only about improving internal workflows, either. Accepting credit cards also improves client satisfaction at the same time that it increases profit margins.
That’s why Tabs3 Software is excited to announce we’re now offering a built-in credit card processing feature, Tabs3Pay.
A valuable tool for law firms
Credit card processing, when implemented correctly, can add enough of a lift to key areas of a law firm’s success to create a competitive advantage.
Cash flow and processing time
Having an online payment option reduces the number of steps needed to make a payment, which increases the likelihood of clients paying quickly. In fact, the legal industry has become increasingly aware that accepting credit cards improves cash flow by 30 to 40%.
A few other benefits: credit card deposits often hit your bank account faster than a check, and you’ll save on the administrative time it takes to process other payment methods.
Client satisfaction and growing expectations
The legal industry is no exception to the growing customer expectation for convenience in making payments, including for business transactions. Providing the ability to make payments by credit card helps meet that demand while also creating a simple payment experience that can be completed from any device.
Overall, accepting credit cards offers greater predictability and stability, opening up opportunities to proactively plan for your firm’s future based on more accurate financial projections.
Getting legal-specific
When selecting a credit card processing service, it’s important to select a software specifically designed for legal clients.
Running your payments through a certain processor puts the pressure on them to make sure the transactions are secure, but you still have an ethical responsibility to verify what that process is. Check if the processor is certified as PCI compliant. Your firm should also vet how information is being stored to ensure privacy compliance.
Don’t forget to ask about how trust accounting is handled. Most credit card processors deposit funds into the same account from which they withdraw the transaction fee, which can land a law firm in serious trouble.
Although this practice isn’t a big deal for non-legal companies, if the account in question is a legal client’s trust account, then the transaction fee has just been paid by the client, not the lawyer. Even if you act quickly to transfer the amount from your operating account, you’ve technically already accessed client funds.
To avoid these issues, legal-specific processors like Tabs3Pay are set up to deposit charge funds into the trust account and withdraw transaction fees from the operating account. We also protect you from similar issues with voids and chargebacks.
Likewise, we can handle your firm having more than one client trust account. After all, we’ve designed our software specifically for lawyers!
Craft your own approach
Tabs3Pay is part of Tabs3 Software, which means that if you want to sidestep double data entry by having your accounting seamlessly update with new payments, you can. With flat rate options and more, you can find an approach that works for your firm.
Visit our site to learn more about the benefits of Tabs3Pay.