publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/395170
fashion is much more effective than dealing with it during the year-end crunch. PRACTICE CONTEMPORANEOUS TIME ENTRY Keeping time entries current serves at least two purposes: • It enables the billing attorney to monitor the progress of a matter at any given time during the month. • It is a more descriptive and accurate representation of what work was performed. Contemporaneous time entry is the elusive holy grail of all law firms. Many seek it. Here's how you can find it: • Understand the importance of the time entry when it comes to billing. Unless you're on a fixed- or flat-fee arrangement, this is what the client pays for. You may have negotiated a great deal or prepared an air-tight contract, but the client is not paying for the deal or document. Your client is paying for the time it took you to get the end result. • Make your time entries as accurate and descriptive as possible. The more accurate and descriptive the time entry, the less likely it is to be questioned. The less likely it is to be questioned, the less likely the time value will be written down. KEEP A HANDLE ON BAD INVENTORY Go through your portfolio long before the year-end crunch to streamline your collection efforts with good data, and avoid the tendency for the approach of year-end to be the time for examining accounts receivable and unbilled balances. When doubtful inventory is cleared out, ledgers are populated with only those items that are actually collectable. Firms should adopt a strict policy against carrying uncollectable inventory. ADOPT YEAR-END PRACTICES THAT ENCOURAGE TIMELY PAYMENTS And now we come to year-end, when a law firm's focus is on getting paid for all its hard work. These best practices can make getting paid a lot smoother. • As the end of the year approaches, make sure you're aware of client cutoff dates. If a client refuses to accept bills for a current year payment past the fifteenth day of the month, make sure your bills are in the client's possession at that time. Begging or pleading for payment on a bill submitted on the sixteenth day will probably be a wasted effort. • If no cutoff dates are provided, a general rule of thumb is to get your December bills out early. This will greatly increase your chance of getting paid by the end of the year. • Your attorneys should be engaged in the year- end process. Their personal statistics and compensation are normally tied to how much cash they collect for their hard work. I'm sure they're aware of this. But it wouldn't hurt to mention it a few times. • Don't let your attorneys procrastinate. Collections staff are usually spread too thin by December 29 to follow up on everything. Clients' accounts payable departments can be taxed at this time of year as well. Many businesses close down for the holidays. Addressing these issues early in the month avoids these problems. • Appeal to your clients that it's your fiscal year-end. A quick call can sometimes get your item moved to the top of the pile. This is even more effective if you have a billing contact for your client. BEGIN THE NEW YEAR It's never too early to start the process for the following year. Being diligent throughout the year will help eliminate a scramble, so remember that year-end collections begin January 1! ILTA WHITE PAPER: OCTOBER 2014 WWW.ILTANET.ORG 43 YEAR-END COLLECTIONS START JANUARY 1