A Commitment to Start and Keep All Year Long
No matter where we are in the annual calendar, it is never too late to commit to doing something new – especially something that is guaranteed to reduce the amount of headaches in your billing department, ensure that you will capture more billable time, and improve your cash flow.
For some reason, billing and collections are still one of the most dreaded tasks I hear about in law firms all over the country. From time tracking, to reviewing pre-bills, to getting final bills out, to insisting clients pay their bills, these critical tasks just do not get the time and attention they deserve. It does not have to be hard…it just has to be done. Here are 12 Commandments of Billing/Collections
- Thou shall enter time contemporaneously throughout the day. There is simply no question that your time will be more accurate and that you will capture more billable time throughout the month using this simple, basic time keeping strategy. They say it takes time to form a habit, and this is one habit you will not regret forming!
- Thou shall take 5 minutes at the end of the day, before running out the door, to review time and ensure it is all entered. Many of us have a difficult time remembering what we had for lunch yesterday. Remembering every call you made, every email you composed or responded to, or every conversation you had yesterday, last week, or 2 weeks ago, is just not a practical way to capture and document your time and work.
- Thou shall use capital letters, punctuation and follow all grammar rules when entering time. Why? Because if you don’t, someone else is going to have to go in and clean up your time entries. It is just as easy to type it right than it is to type it wrong. Make sure you are taking advantage of any features your timekeeping program has for spell checking and automating common phrases, or even entire time entries.
- Thou shall set a time (second business day of the new month) to run pre-bills for review, and stick to that date. So often I hear about the waiting game – we cannot run our pre-bills because 3 of our timekeepers have not entered their time yet.
- Thou shall attempt to electronically review pre-bills instead of wasting paper. With just a little bit of training, you can annotate a pdf with notes and comments and return pre-bills reviewed electronically. Even better, see if your billing system allows you to review and correct time in the program, eliminating the need for someone else to decipher your edits.
- If commandment 5 cannot be kept, thou shall print pre-bills on the ugliest color paper you can find (makes them easy to find and people want them out of their office as quickly as possible). White paper blends with the other white paper and it easily ignored. That is not the case for neon pink paper.
- Thou shall make pre-bill reviews a priority by setting a deadline and sticking to it (within 24 hours of receiving them). One of the chief complaints we get from billing administrators is related to waiting on the return of pre-bills. Do your best to not have people waiting on you.
- Thou shall produce easy to understand, easy to read bills for your client. Take pride in the finished product – if you have always wanted to change up your bills, do it now! At the same time, strive to make your billing process as simple as possible. For example, if you are still composing, printing and signing cover letters for your bills, consider if that really adds value to the client and if you believe it does not, stop doing it.
- Thou shall create and mail/email final bills by a chosen deadline every single month (by the 5th business day of the month at the latest). Clients like to know when they will get their bills. In addition, billing is one of the ways you communicate to your client what is going on with their case. If bills are not sent on a regular cycle, that communication is skewed.
- Thou shall establish a due date for invoices, communicate that very clearly to clients. It is best to do this in your engagement letter, and then verbally when working with a new client.
- Thou shall have a protocol in place for dealing with collections. Suggestion: if your bills are due on receipt, send a past due notice 15-20 days after bills go out, call on day 25, send a letter on day 30, etc. Whatever you do, have a documented process, and stick to it. The longer a client goes without paying a bill, the less likely it is that they will pay it.
- THOU SHALL NOT WORK FOR FREE – I know you would much rather…spend time with your family…golf…read a book…go to the movies…lay on the couch…go for a walk…anything, really. But, working for free should just not be an option.
You will not regret making a renewed commitment to the process of billing and collections. It is better for your, for your firm, for your clients and it sure to impact the bottom line in a positive way.