Automating Firm Accounts Receivables

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It’s every lawyer’s worst nightmare, and yet a commonly recurring one: the non-paying client. After investing countless hours into working a matter, you present the client with a beautiful, polished bill—and silence. This only serves to put more work on your plate as you must now send additional follow-ups to the past-due client, including phone calls, mailed statements, and, if necessary, referrals to collections.

While larger firms have the resources necessary to chase down non-paying clients, solo and small firms are at the mercy of whether their clients decide to pay or not. Non-paying clients can have disastrous effects on your productivity, realization rates, and firm cash flow. One study shows that a bill that is more than 60 days past due can still be collected about 89% of the time. However, that drops to a 67% likelihood of collection after six months and to a 45% likelihood after one year.

Do you have the resources necessary to repeatedly follow up with multiple clients over an entire year? Why not start automating firm accounts receivables, and ensure you’re devoting your time to serving paying clients?

Legal professionals automating firm accounts receivables

What is accounts receivable automation?

Do you have the resources necessary to repeatedly follow up with multiple clients over an entire year? Why not start automating firm accounts receivables, and ensure you’re devoting your time to serving paying clients? AR automation is the process of making your sales collection automated digitally. Accounts receivable are the payments that you are yet to collect for providing your services.
Standard accounts receivable processes can be time-consuming, demanding work before and after the service has been completed. More than just invoicing, you’ll need to communicate pricing expectations before entering into an agreement, track payments received and payments due and more. Solo practitioners may rely upon the timely processing of invoices for cash flow, which means it’s essential that outstanding payments are quickly resolved and follow-up plans are implemented.

Enter outsourced receivables

By automating day-to-day processes, such as following up on your accounts receivable, you’ll save valuable time. Accounts receivable automation creates invoices based on data schedules and delivers them and sends reminders.

By outsourcing your receivables follow-up to a third-party vendor, such as the latest Clio integration partner InvoiceSherpa, you’re able to free up more of your valuable time making sure you’re focusing your efforts on getting paying customers rather than chasing payments. After integrating with InvoiceSherpa, Clio users are able to set up automatic triggers at specified timeframes that will follow up with customized messaging via either email, SMS, or phone based on the due date of your invoices.

Accounts receivable automation benefits

One of the biggest challenges in accounts receivable processing is that the work is manual and often lacks standardization. By automating end-to-end accounts receivable operations, you could overcome these issues and more. We’ve elaborated on some key accounts receivable automation benefits.
By seamlessly connecting to your existing system, InvoiceSherpa removes all double entries and manual labor generally associated with a service of this kind. Your entire accounts receivable flow can easily be outsourced without having to change your current processes or make any technology changes to your current system. Clients are even able to pay their bills directly from the reminders sent from InvoiceSherpa, facilitating easier payment.

Reduced costs

Spending valuable work hours on manual AR processes is far from cost-effective. From credit reviews to collections, time can quickly add up. With accounts receivable automation, these time-consuming processes are streamlined, leaving you and your staff with more time to focus on paying clients. Automation increases your efficiency and productivity, and takes away any extra costs such as printing that may go into manual accounts receivable methods.

Improved efficiency

Managing invoices and payments is labor-intensive work that you or your firm’s AR team can probably do without. In a firm that services many clients at once, these processes can take up to a few hours each day. By automating these processes, you’ll improve working efficiency and therefore your bottom line.

Improved cash flow

Your collection time will naturally improve when you move from manual processing to efficient automated accounts receivables. The end-to-end nature of automation means that invoicing, chasing up payments and everything in between happens quickly and efficiently. You also have the option of setting up scheduled payments with clients, allowing you to stabilize your cash flow.

Better customer relations

Automated accounts receivables software is designed with your clients in mind. Clients receive the benefit of predictable invoicing and self-service. Friendly payment reminder email templates are available to take the stress out of collecting money. A thank you email is also automatically generated after payment to help improve relationships.

Streamlined processes

Automation simplifies the accounts receivable process as it doesn’t rely on the allocation of your time to happen. Invoicing and payment collection becomes streamlined as highly customized invoices, reminders and other communications are sent out on a predetermined schedule.

Minimized human error

Even the best accountant is privy to small mistakes, but the good news is that AR automation takes common human error out of the equation. Concerns such as inaccurate invoicing and overpayments are mitigated through through digitally synced systems. Perhaps the most beneficial part is that finance teams can keep track of cash flow in real time, minimizing the risk of duplicate reminder emails.

How to automate accounts receivable

In order to automate accounts receivable processes, you’ll need to enlist the help of a third party vendor such as Clio integration partner, InvoiceSherpa. By outsourcing your receivables follow-up to a third-party vendor, you’re able to free up more of your valuable time making sure you’re focusing your efforts on getting paying customers rather than chasing payments.
So, what are the accounts receivable automation best practices?

Integrate Clio with InvoiceSherpa.

Set up automatic triggers at specified timeframes that will follow up with customized messaging via either email, SMS, or phone based on the due date of your invoices.

Track payments in real time. It’s that easy.

By seamlessly connecting to your existing system, InvoiceSherpa removes all double entries and manual labor generally associated with a service of this kind. Your entire accounts receivable flow can easily be outsourced without having to change your current processes or make any technology changes to your current system.
Now that you’re on your way to automating firm accounts receivables, consider setting up your law firm’s chart of accounts

Accounts receivables software

InvoiceSherpa logo

InvoiceSherpa is a subscription-based payment automation software that helps businesses manage their accounts payable and accounts receivable. For a law firm that bills many clients, programs such as InvoiceSherpa can help settle payments in a streamlined manner. Here are some of InvoiceSherpa’s key features:

  • Faster payments. InvoiceSherpa helps you accelerate your cashflow by implementing reminders and even automatic late fee charges.
    Reduced strain on resources. Trim the lifecycle of invoices by automatically tracking invoices end-to-end. This reduces the need for follow up emails, text messages or calls.
    Simplified payments. Clients can pay directly from the invoice reminder sent out by the InvoiceSherpa system, or through your customer portal.
  • Free trial. You’ll be able to try InvoiceSherpa for 14 days without entering any credit card details.
    Custom scheduled reminders. Whether it’s email or SMS, InvoiceSherpa has the capability of sending out reminders when an invoice is created, a due date is coming up, the invoice is past due, as well as a thank you when payment has been received. You can customize these reminders with your own branding.
  • Integrated payments. When a client pays through the invoice reminder, a payment will be posted directly to the invoice in your accounting software without you needing to double enter.

Final thoughts

A late invoice doesn’t help anyone: Cash flow is one of the main reasons a business goes broke. This is as true for law firms as it is for anyone. By consistently following up with past-due clients, you can dramatically cut down both the time it takes to get paid and the number of invoices that go past due.

Categorized in: Accounting

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