The unfortunate side effect of lawyers getting to charge hefty bills is that law firms often run into the issue of receiving late payments. The common problem places tremendous stress on firms at the end of the fiscal year ―when they need to close out their books and finalize business. Due to this, the quality of legal work (at smaller firms especially) often diminishes. Even though timely notice is given, issues like disputes over billing still arise, which prevent immediate payment. Of course, some firms experience this more than others, and some, not at all.
The firms fortunate enough to not have this issue have spent ample time analyzing their processes to adequately implement optimal billing procedures. Still, the problem can be easily remedied for those firms still routinely receiving late payments. Since the issue lies in billing, the remedy too can be found by optimizing billing and collection practices. To implement this, many firms are beginning to rely on automated billing tools to make sure that all of the bills and invoices are correctly scheduled and following regulations. This is enabling them to understand exactly why bills are being delayed, while helping them settle any disputes that may arise.
Understanding Why the Payments are Getting Delayed
Even clients who regularly meet their billing deadlines may eventually delay a payment over a dispute. It could be over the total invoice amount, or because the bill does not meet previously determined guidelines. It could also be linked to the total hours spent, the expenses claimed, or even the specific activity listed. Of course, other issues such as financial burdens can come into play as well, especially when considering that unseen medical costs may arise at any time. This creates the need for a dependable and open communication between a firm and its clients, along with pre-established procedures like legal mediation and arbitration on how to handle disputes if both parties cannot reach an agreement.
What the Law Firm Can do About it
The most successful law firms try their best to prevent disputes from ever occurring by using effective methods and reliable software tools. Luckily, firms can keep their practice compliant to customer expectations by simply using an efficient billing solution. Legal billing software will help law firms implement better billing procedures and establish more proficient habits. Cloud-based solutions offer further advantages as they allow instant access on any computer, tablet, or smartphone from any location through a secure connection. Additionally, the software should also possess the power to automatically send reminders, store incoming documentation, and act as an all in one hub for handling a firm’s billing and payment needs.