Essential Tips for Bookkeepers Working With Attorneys on Accounts Receivable Management
May 15, 2023Managing a law firm's accounts receivable is a key responsibility for a bookkeeper. The proper management of accounts receivable ensures cash flow and timely payment of legal fees by clients. Here are some straightforward tips for creating an organized tracking system that ensures accurate recording and billing of legal fees.
Create an organized system for tracking accounts receivable
Bookkeepers should establish a systematic tracking system for payments and overdue balances to manage accounts receivable efficiently. Utilizing accounting software like QuickBooks or Xero to record payments and generate invoices can help achieve this. Precise payment schedules and terms with the clients should be set, and a follow-up system should be established for overdue balances.
Properly document all communications with clients
Documenting all communications between you, as the firm’s bookkeeper or the attorney and client, concerning the legal fees and payments is essential. This includes emails, phone calls, and other forms of communication. Keeping accurate records of all communications can help prevent disputes over fees and ensure that all legal fees are accurately recorded and billed on time.
Accurately record and bill legal fees
To ensure that all legal fees are correctly recorded, billed promptly, and accounted for, it is crucial to have a clear and thorough understanding of the services provided and the fees associated with each service. Utilize QuickBooks and billing software like Clio or LeanLaw to generate and manage accurate invoices and track payments. To keep up with outstanding balances, review accounts receivable reports regularly and follow up on any discrepancies. This is especially important for bookkeepers who handle legal billing.
Utilize QuickBooks Workflow Feature
Using the workflow feature in QuickBooks can be a great way to streamline your accounts receivable process and save time. Here's how it works:
QuickBooks' workflow feature allows you to create customized workflows for tasks such as invoicing and follow-up. For example, you can set up a workflow to automatically generate an invoice and send it to the client as soon as the services have been provided. Then, you can set up follow-up reminders for overdue payments so that you can quickly take action to collect the outstanding balance.
Here's how to set up a Workflow for Invoicing in QuickBooks:
- Navigate to the gear icon in the upper right corner of QuickBooks and select "Workflow."
- Select "Create Workflow" and choose "Invoice" as the workflow type.
- Set up the trigger for the workflow. This could be an event, such as a job being completed or a particular date being reached.
- Choose the action you want QuickBooks to take. For example, you could automatically generate an invoice and email it to the client.
- Set up any necessary conditions or rules for the workflow. For example, you could set up a rule to only generate an invoice if the client's account balance is below a certain amount.
- Save the workflow.
Once you've set up the workflow, QuickBooks will automatically generate an invoice and send it to the client based on the trigger you set up. You can then use the follow-up reminder feature to track overdue payments and send reminders to clients who have not paid.
Using the workflow feature in QuickBooks can save you time and help you stay on top of your accounts receivable process. By automating specific tasks and setting up reminders for overdue payments, you can reduce the risk of errors and improve your cash flow.
Stay up to date on legal regulations related to accounts receivable matters
Finally, staying current on legal regulations related to accounts receivable matters is vital, especially if you are a cloud accountant. This includes understanding the laws related to debt collection, credit reporting, and other related topics. Remember that legal regulations can vary by state, so it is important to stay informed about any changes to the law in your state.
Effective accounts receivable management is critical for maintaining cash flow and ensuring that clients pay their legal fees on time. Following these tips, you can create an organized system for tracking accounts receivable, accurately record and bill legal fees, and use technology to automate processes and save time. Stay current on legal regulations related to accounts receivable matters to ensure you comply with the law.
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