The financial health of law practices does not depend on sales or margins but on the amount of cash the firm can access. If your law firm is struggling to have more cash in the checking account, here are the 5 steps to increase your law firm cash flow.
Step 1: Reduce costs
First off, whilst cost reduction is an unpleasant process, accomplishing it should be the primary step during difficult economic periods. To achieve wise cost-cutting, your legal practice should consider:
– Making cuts on non-essential services which are not pivotal for your business. Nevertheless, remember to notify your service providers in advance to keep a mutual positive attitude.
– Negotiating with your essential service providers. Reach out to such companies as your ISP to arrange better costs. These companies are prepared to apply these measures to build a long-lasting relationship with their customers.
Step 2: Think about selling non-core assets
Does your company possess any assets ranging from equipment to unnecessary office area? If so, it is a good idea to have a thorough look into these. The sale of those assets can be a good short-term solution to raise cash.
Step 3: Offer incentives for early and timely payments
Undoubtedly businesses in all industries would like to encourage their customers to pay invoices on time or ideally before the due date. To achieve this, your law firm can incentivise clients by proposing a seasonal small discount on your legal services. That easy yet efficient method will enable you to collect money and maintain cash flow whilst strengthening ties with your customer network.
Step 4: Improve your productivity with technology
Whether your law firm is working remotely or not, integrating your accounting with cloud-based software can significantly improve the efficiency of your team. Using a cloud-based solution can minimize the daily billable work, which does not bring you revenue. Read more about one of the most efficient legal software here.
If you already acquired cloud-based software, think about expanding your technology by integrating your Clio software with Kolleno. This will allow you to automate key collections and credit control functions and recover outstanding payments. As a result, your firm will benefit from improved recovery rates and your team can focus on high value-added activities instead.
Step 5: Improve your collections process
Finally, Incorporating Kolleno into your legal practice would also reduce the stress connected with following up on unpaid invoices. Thanks to Kolleno, which offers 5 times faster collection, your team will not have to think about approaching clients with overdue invoices because your invisible employee will take care of it- making sure that your payments are delivered faster, whilst retaining your positive client relationship.
Learn more about Clio and Kolleno integration and how it can help to accelerate your law firm cash flows.