Running a law firm and performing administrative tasks requires a lot of time and resources. A law firm is a business and billing is a major part of running that business. Every minute spent should be properly coded and billed to ensure lawyers are paid for their services. Invoices must be created and sent. Payments must be received and processed. What if there was a way to simplify this process and reduce costs while doing it? Legal e-invoicing software provides automated solutions for law firm invoicing and a long list of features to help with time tracking, client profiles, time management, and more. These solutions are easy to implement, proven to increase revenue, intuitive to use, and sync securely with the cloud, so there is no good reason. not to use them.
What is legal electronic invoicing software?
Legal electronic invoicing is the process of automating the submission, review and approval of invoices in a law firm. Law firms submit their invoices in Legal Electronic Data Exchange Standard (LEDES) format, allowing the system to translate detailed information about the invoice and process it. Those who have put it into practice have seen dramatic reductions in administrative costs and have been able to collect data that they can analyze for future perspectives.
One of the most important features of electronic invoicing is its ability to produce an electronic file containing a header, detailed client and case information, invoice totals, and minute details, such as deadlines, timekeepers and expense codes. This information is all coded according to the appropriate activities and expenses to increase the efficiency of a law firm’s accounts payable department and help control costs.
Benefits of legal electronic invoicing
As we have seen, the benefits of electronic invoicing far outweigh the risks or efforts required to set it up and operate. Law firms that put electronic invoicing into practice will see immediate benefits and long-term positive effects.
Lower margin of error
Take into account the number of invoices that a law firm creates and processes each year. Next, think about the margin of error and the different guidelines and regulations that law firms must follow. With so much to follow, mistakes are likely. However, legal e-invoicing takes care of all of that. The software automatically detects errors and flags them for review, providing built-in security for human error that naturally occurs with documentation.
Legal electronic invoicing software improves transparency as it promotes standards such as LEDES. Law firms are making a greater effort to become digitized and transparent to meet the needs of current clients. LEDES Invoicing shows customers a detailed, line-by-line breakdown of their invoice, allowing them to fully understand their charges and hopefully approve them faster.
Increased customer confidence
A direct benefit of improved transparency is increased client confidence in the law firm. As trust grows, disputes occur less frequently and repeat cases and referrals increase. Word of mouth is always a great benefit as it brings more customers to the business without the need for more marketing and advertising expenses.
Faster payment of invoices
Disputes over invoices can hamper the approval and processing of payments. As trust builds and litigation decreases, bills are paid faster and law firms have stable cash flow. If the invoice is approved as soon as it is received, it can usually be processed and paid quickly, as there is no need to communicate further with the law firm. This happens more often with electronic invoicing software because customers understand the charges and feel less of a need to question the invoice.
Other benefits include:
Automated invoice processing allows staff to focus on other higher value work. Lawyers may spend more time making money than dealing with it.
Real-time automated cost tracking and reporting ensures fewer errors and rejected invoices.
More accurate invoices for faster approval, fewer rejections and faster payments.
Reports are automated and collected online and offline, saving administrative staff time.
Better value for money, leading to better relationships with external advisers.
Points to consider with electronic invoicing
While this has a myriad of benefits, there are a few things a law firm should be aware of when considering using e-invoicing. Some software can have hidden costs and processes that need to be addressed before your business fully embraces this new way of managing accounts receivable.
Supplier costs: These are inevitable whenever you use a third-party supplier and the costs can be substantial. While it’s important that the software you choose has the ability to integrate with third parties, having an integrated solution, like PracticePanther, is more cost effective.
Implementation and monitoring: The company should designate a person to oversee and monitor the implementation of the software. Fortunately, legal invoicing software increases accuracy and makes the process as easy as viewing a dashboard.
Receipts: The software will send invoices, but the business will need to have a staff member in charge of managing receipts.
Does your business need to use electronic invoicing software?
Legal electronic invoicing software can help a law firm process, deliver, and collect bill payments faster than ever. With the added benefits of improved accuracy, greater transparency, and better time management, it’s clear that e-invoicing software is the way modern law firms do business. Although it has a learning curve and additional cost to the business, once it is up and running, the benefits of the software will far outweigh the hassles at first.
Time is money, especially for law firms. Legal electronic invoicing software automates processes to save time and reduce errors to streamline a business’s day-to-day operations. Law firms see significant benefits after implementing legal software solutions.