Many law firms recently have had problems managing cash flow, due to the global pandemic. cash flow is critical for both the short-term and long-term success of any firm. Programs like LawPay and Clio are digital platforms to help manage cash flow, amongst many other features. Without a digital platform, a firm is likely to lag in managing its payment system, relying instead on “old school” methods such as pen and paper. The problem is that this tends to cost more money, and slows the billing, payment, and client collections.
Many law firms, especially solos, often give the task of managing cash flow and collections a low priority on their to-do list. Servicing clients and new client development are given higher priorities. There is often a lack of understanding of financial reports and statements. Understanding financial reports such as income statements vs. cash flow statements are important is in providing early detection of potential cash problems requiring corrective actions. Law firms should develop reasonable monthly, quarterly, and annual cash flow projections as well as income and expense projections. By tapping into platforms such as Clio, you are letting Clio manage this entire task for you.
Managing collections by using an automated data exchange process allows you to not only route accounts quickly back and forth, it also allows you to separately monitor key events such as court dates, filing deadlines, and judgment expirations. This automated data stream can separately be used to monitor compliance with consumer protection laws and your expectations that these firms are handling every single account according to your work standards.
The outsourced online platforms (Clio and LawPay) take care of all billing and accounting to flag potential delinquent accounts and with simple functions, allow for a quick follow-up to collect all outstanding invoices. The successful firm is the one that changes with the times, tapping into technology, to help cut their write-offs, increase their collections, and by definition, increase their bottom line.