It’s probably not a big surprise that if your firm does not have sound billing and collection practices, your cash flow will suffer. It also probably goes without saying that when cash flow suffers so does partner compensation. How can you tighten this up?
First and foremost, you need to have solid billing policies that are agreed upon and followed!
- Enter your time daily. With today’s mobile technology, there is really no excuse for not entering time daily. Your practice management software should be so easy to use, so easy to access that there are really no excuses. Enter time from your desktop, laptop, iPad, cellular phone and dictate it directly to your software. If your software is not providing your attorneys this flexibility, make the investment now to migrate to a system that will. The return on investment will be recognized immediately.
- Run your prebills per your billing schedule. If you invoice clients for time through the end of the month, prebills should run on the first or second business day following the end of the month. There is no good excuse as to why this cannot happen if everyone is entering their time daily.
- Return prebill edits to your billing department by the deadline. Again, billing must be a priority for all billing partners. No exceptions. If your firm still uses paper for prebills, that’s okay, just make sure the efficiency of print is the best use of firm resources. There are practice management software tools for billing workflows. Centerbase, for example even has a Prebill Approval Process that will simplify the approval process chain of events.
- Final bills should be distributed to your clients no later than 5 days after the close of your billing cycle. It can be done with a commitment from you!
- LEDES (Legal Electronic Data Exchange Standard) billing is often the nemesis of your billing department. The billing process must hold your billing department accountable to upload the LEDES invoices into the third-party system. They also MUST follow up on rejected invoices and follow the appeals process through to resolution. We cannot tell you how often we hear from a prospective client that they were shocked to know that the reason their collections were down was because there was no follow up on the appeal.