In legal practice, timely billing is critical to get paid promptly for working hours. Regardless of whether attorneys have solo practice or part of a law firm, they need to generate invoices on a regular basis to get payments on time. Creating invoices promptly is challenging, particularly when the practice is thriving and attorneys have to deal with multiple client cases. Many of them sometimes even forego family time, weekends, or vacations to get bills out to clients since they lack an automated time tracking and billing system for invoicing. When billing is inefficient, it can delay payments from the clients. It can also lead to financial stress & job dissatisfaction due to lack of cash flow into the business.
Some inefficient methods in billing
- In billing, it is essential to itemize each independent activity and note its corresponding time instead of grouping the tasks under a single time entry. Billing the work in blocks is more common in traditional methods where it involves more time and effort. To avoid repeating the lengthy billing process, attorneys typically group the tasks as a single block instead of breaking the time into separate phases. When activities are grouped under a single time entry, there is a chance of missing out entries on small legitimate tasks. For instance, drafting emails or answer client phone calls may seem insignificant in the short term but they add up to several billable hours at the end of a month.
- Typically, attorneys have to bill contemporaneously as soon as they finish their tasks. They have to make it as a regular habit to fill in the details and time they spend on the task without any lag. The sooner the bill is generated and sent to the client, the quicker the payments will be done. Sometimes, attorneys try to note each task in a slip or notebook and then re-enter the record into the system at their convenience. Often, it may result in a poor collection of payments from clients because of the delay in the billing process. Timely billing not only ensures faster payments from clients but also gives accuracy in billing.
- Not using the right legal time and billing software is another drawback that is more common in legal practice. If lawyers or law firms are already using billing systems, it is essential to make sure it has comprehensive options that give flexibility in billing. With all different options the way attorneys bill their clients like hourly rate or a flat fee or project-based billing, the process can be difficult to generate bills in lesser time. It can be more frustrating if they have to split the bills and create multiple invoices for different clients. Having right billing software will enable them to overcome the billing challenges and be more productive in delivering results to their clients.
- Tracking and organizing expenses is another critical task that is typically neglected in billing. An attorney out in the field working on a case can incur many professional and personal expenses but may not record or preserve receipts for billing. Along with recording billable hours, it is essential to track expenses as they occur and include them in billing. If cost associated with the client case are not recorded and billed properly, the attorney may incur the significant loss in income generation. A wise option is to use a compatible system like cloud-based time tracking and billing software that allows the easy use of recording billable expenditures on the go and facilitates billing based on the recorded time & expenses.
To resolve the issues of ineffective billing, having an organized invoicing process is important. By using a timekeeping and billing software designed specifically for law profession, attorneys can coordinate their billing, increase accuracy and produce timely invoices. With the help of flexible and automated systems for billing, they can avoid the inefficiencies in billing process and reduce the number of overdue bills.