Running a legal firm, large or small, is not easy. Many firms report that their biggest challenges involve slow payment times and uncollected money sitting in their accounts receivable (AR). OTR has put together some strategies that businesses can use in order to speed up the process.
Encourage Online Payments
Electronic payments put both parties at ease. It ensures the cash is deposited into your account within minutes of dispatch. eCheck payments also have a smaller duration than traditional cheques which may take up to 5 business days. Credit/Debit card payments should also be accepted via an online portal tied to your business, although there are fees included in each transaction, it gives clients the flexibility of pay.
Depending on challenges, clients might delay or miss a payment in the future which could even result in a write-off. In order to avoid this, collecting a partial payment (50%) in advance with the balance due upon completion might work better. An upfront deposit reduces the risk of nonpayment and increases the chances of a 100% realization rate.
Enable Auto Payments
The best way to incentivize quick payment is to make it convenient. Scheduled payments allow a client to set up online transactions in advance of the due dates or regularly by using a credit card or bank account. When transactions run automatically, firms spend less time chasing after unpaid invoices and more time serving clients and working billable hours.
Setting up an automated firm-wide collection process via email reminders is a great way to ensure a missed payment does not get buried under the books and can act as a firm’s AR safety net. Locally, many banks and insurance agencies send payment reminders a week before via email to their clientele and data shows that this strategy has yielded optimal results.
Implementing interest fees as a way of incentivizing timely payments will improve the cash flow of your business—and ultimately—reduce the stress and emotional burden that result from overdue invoices.
By following these simple yet effective strategies, legal firms will not have to worry about payment dues and the challenges that come with it.
To book a court reporter for a meeting or a mediation, or even to discuss a court reporting position with On The Record, call one of our locations today, conveniently located in Whitby and Barrie. We look forward to discussing your court reporting or mediation needs.