Peggy sat down with Rio Peterson of Affinity and Katy Young of Ad Astra to share some best practices for getting paid the paperless way! You can check out a replay of their presentation BELOW. Here are some of our key takeaways and tools referenced in that great discussion!

Many firms have different approaches to taking payments. Some use certified checks or money orders, others draft payments. Cash and debit cards are often an option, and we cannot forget online credit card payments! Most of us use a combination of all the above with the help of a platform like Clio!

Take a moment to consider the most challenging aspects of your current billing processes. Do you struggle with getting paid on time? What about keeping track of payments and billing schedules? Simply getting the check? Let’s be honest, COVID-19 has made it difficult for physical money exchanges in a timely fashion. With all of these aspects in mind, we want to encourage you to expand your digital payment options by leveraging Clio.

So how do we go about laying that foundation in Clio?
Clio can help you generate invoices easily if you have a good foundation.  It all begins with your matters. Setting up your matters correctly can help facilitate a smoother billing cycle. The first place to start is your workflows. Be intentional about how you define the type of case. Here are a few questions to consider:

  • Do you bill hourly? If so, what are your rates?
  • What about flat fees, contingent, or pro bono?
  • When do you bill? Is it at the end of the case?
  • Do you do deposits?

Next we want you to think about what information will show up on your bills to clients. Start with their contact information and make sure it is correct. Accurate information allows automation to function as it should without having to double back and correct any errors found later in the generated bill. From there, make sure you’re properly identifying the matter as this will also show up on the system-generated invoice for your client.

Other items you’ll want to consider as you set up your client for billing:

  • Properly Identify related contacts who are approved to receive invoices for the client being billed.
  • Make sure special circumstances are noted, such as a client’s preferred method of communication. Also consider whether they have limitations, like diminished vision, that may impact how they are able to read your invoice.

Standard Operating Procedures are your friends! Make a setup checklist for new cases so that you have a clear, consistent SOP.  That way your team won’t miss a beat, and your invoices will be set up correctly from the beginning

What about Retainers?
Having retainers can help your cashflow as you bill clients. That being said, you must set clear expectations. The fee agreements you establish with your clients are a key component in making sure everyone is on the same page. Here are some items you’ll want to discuss with them upfront:

  • Explain the basics of how trust accounts work.
  • Set the initial retainer amount to cover projected fees for 2 months.
  • Introduce them to Evergreen Retainers and make sure they understand as they sign and initial this section.
  • Let them know what to expect when it’s time to replenish their retainer after a billing cycle. This may include sharing a sample letter or email.

Keep in mind that if your client would like to use credit card information and have you store that information on their file, you must ensure your system and methods are PCI compliant. We recommend avoiding storing credit card information for your clients directly. Instead, collect credit card information via your credit card processing system.

How are you billing your services?
HOURLY- It can be so easy when you’re bouncing from one meeting to another to not record your time. DON’T do this. Capture all time in the moment.
Having accurate time counts is crucial to your billing process. There are so many tools at your disposal to help make tracking your time simple and quick.
Calendar meetings and phone calls can be converted to time! Did you know you can even connect your Zoom to Clio? There are ways you can automate some of these processes.

Building out a daily to-do list can help you determine how much time you spend composing and responding to emails as well as other work done on a client’s behalf. As you check each item off your list, record your time for that item in Clio.

Get in the habit of reviewing your time at the end of each day. Trust us, it’s much easier to remember what you did a couple of hours ago than it is to remember what you did yesterday at 2:16 p.m.

FLAT FEE- There are some definite pros to using flat fees:

  • They’re predictable
  • They are transparent and clients are fully aware of what to expect
  • Because your payment is dependent upon the delivery of the product, you and your client share the risk
  • This method can shift your focus to workflow and execution, highlighting efficiency and accuracy as you get the same amount of income regardless of how many hours you put in.

Some may mistakenly think that a “pro” of flat fee billing is that you don’t need to track your time. This is not true. You absolutely need to track your time for flat fee cases and review the time spent for flat-fee work on a regular basis. This allows you to determine if your pricing is accurate.

CONTINGENT CASES- For settlement processes, you need to have all time and expenses captured. This can impact what your firm is owed and you may need to apply for a fee award later. Similar to the Flat Fee, it’s important to keep track of your costs in time and expenses to ensure that you are taking on profitable cases.

How can you tell what type of billing is best for your firm?
When considering whether or not flat fees are right for your firm we invite you to consider the following questions:

  1. Will flat fees improve profits?
  2. Do they expose you to a new set of desirable clients?
  3. Do you have the marketing platform for flat fee services?
  4. Do you have the right metrics in place to measure the financial performance of flat fee cases?

Metrics are the key to unlocking the story behind your billing. Make sure you’re tracking the right ones. Be critical of your Key Performance Indicators. You’ve got a lot of historical data to choose from: billing data, collections history, number of flat fees, costs per flat fee matter, revenue per flat fee matter, and indirect impact.

When should I bill?
Setting a regular billing schedule makes it easier for clients to know what to expect and keeps your cash flow more consistent. Decide on if you are billing once or twice a month. Send “progress” bills after big milestones
As we mentioned earlier, Standard Operating Procedures are your friends. Create an invoicing checklist and follow it.

What does my invoice need to include?
To help keep your billing process flowing smoothly, make sure your bills are easy to read.  This step alleviates stress for both your clients and your team. Having clear billing can prevent your team from fielding phone calls from anxious clients to walk them through an unnecessarily complex invoice. Here are some tips for how to make sure you are setting everyone up for success:

  • Each entry or line item tells the story of how your firm is moving the ball forward. Be clear about what they’re paying for and how it benefits them.
  • Make separate entries for the time you intend to zero out as your services are completed. This can help make the invoice more aesthetically pleasing and makes it clear how far is left to go.
  • Each invoice should have information regarding any past due balance and any remaining trust balance.

Make it easy for your clients to pay you!
The fewer barriers between your clients and a simple mode of payment, the better. Not only does a smooth billing process equate to a better overall client experience, but it helps your team manage your process as well. One way to start the ball rolling in the right direction is to include all payment options on the footer of your invoice. Set your client’s expectations regarding how they can pay.
If you plan to accept wire transfers, consider including your bank information in the footer as well.

We recommend allowing payment methods that can easily be handled online; credit card, ACH options, PayPal, Zelle, Venmo, etc.

How do I keep up with it all?
Reporting is your friend. Create a weekly cash flow report that clearly shows your funds in a way that makes sense to you! Run and review this report each week.
Why? Having this information at your figure tips forces you to review your business on a regular basis and allows you to troubleshoot any areas that seem to be trending in a negative direction. It also helps you keep on top of your Accounts Receivable and Accounts Payable.  Paying your bills late is never a good look. Looking at your report should also help you track your credit card balances, your work in progress, and your firm’s revenue.

Don’t forget: Clio has some great resources available to help you stay on top of your billing processes. In addition to the everyday functionality of their platform, Clio has had webinars, blogs, podcasts, and more to teach you tips and tricks for maintaining a healthy balance sheet.