At Lawyerist, we’ve talked about accounts receivable a few times. In our view, you need to collect money in a timely way and that’s all there is to that. Having outstanding invoices older than 30 days is brutal on cash flow and is correlated to reduced collectability. That’s why you should make it easy for your clients to pay you by offering multiple payment options. (Online payments anyone?)
Accounts receivable is important. It’s the cash flow that keeps your law firm afloat. You should check it at least once every week. Having a running appreciation for your outstanding A/R will give you an intimate view of your business and help you make important improvements to your firm’s finances.
But tracking of all those invoices and due dates isn’t always fun, and it’s often quite time-consuming. The best way to keep track of your accounts receivable is to either hire a bookkeeper or to use your bookkeeping software’s reporting function. If you don’t have a bookkeeper or bookkeeping function, we’ve created an A/R ledger to help you track of your invoicing. Remember to keep tabs on your A/R and stay on top of your billing!