By Ally Kennedy, Founder of AMIGA
Billing is something that most lawyers dread. I don’t know what it is, put preparing and mailing the bills is something that stresses us out and something that we avoid completely. Failing to send bills directly affects your bottom line. It’s that simple. I used to reason that most of my clients paid and most paid on time so I didn’t need to bother with sending out bills each month, but once I started preparing and mailing bills each month, money started rolling in the door. (check out our "5 Tips to Make 6 Six Figures" article)
1. Make one client pay date
Designate one payment due date and make that the default date in every contract. Our payment date each month is the 15th. I have found that is the best and easiest date for everyone because the rent and major house bills are usually due from the 1-12 so people can use the second paycheck a month to pay the monthly bill.
2. Schedule time to prepare and mail bills
If something isn't on your calendar, it doesn't exist. Schedule 1-2 hours on the 1st of each month to prepare and Mail bills. This will help remind you to do it and will hopefully help hold you to it.
3. Know who owes you money
I know this sounds easy but it honestly wasn't easy for me. I never could figure out Quickbooks and I was handling all of it on my own. All of my cases are flat fee so there is a set billing amount each month. For a while I did not even have a list of which clients were on a payment plan!
At the very least you should make an excel list with the following information:
- Client name
- Monthly payment amount
- Total outstanding on account
- Last time billed
- Last time paid
It is helpful to know when you last sent a bill and the last time clients paid. Also your accounts receivable are what get you through the hard months, so try to have a handle on how much you are owed.
4. Outsource billing
Be honest with yourself. If you won't mail out bills, make an investment into someone who will. I use virtual assistants to handle my billing. Paying for someone to assist with your billing will pay for itself.
Here’s a recent example from my own practice:
As I mentioned, most of my clients pay their bills every month, but for some reason one month several people did not pay. After the 7 day grace period, my virtual assistant emailed and told me the outstanding accounts and it turned out that there was nearly $10,000.00 in unpaid bills for the month. Truthfully, I never would have even known! With that information, I was able to call my clients and talk to them about getting current on their payment plans. Needless to say, it was well worth my money to have hired someone to keep track of all of that.
What are some tips that you have to make your billing run smoothly? Let us know below!
About your Ally in Life, Business and Law:
Alexandra "Ally" Kennedy is a national award-winning attorney and the founder of AMIGA Lawyers and Alexandra Kennedy Immigration Law.. After becoming a mother, and in a matter of 3 months, Ally transformed her practice from earning in pesos to earning 6-figures and she is passionate about teaching attorneys how they can do the same. Ally empowers lawyers to be the CEOs of their law firms with her weekly blog, webinars, and conferences where she teaches step-by-step how to do the work they love while running a profitable legal business. Ally lives outside of Seattle with her partner and their 5 children.