Billing Tips for Solos and Small Firms

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One of the biggest hassles of being a solo or small firm lawyer is dealing with billing issues including tracking time (if billing by the hour), generating invoices, tracking payments, following up on late payments, generating financial reports, logging expenses, and more. And one of the biggest areas of conflict between lawyers and their clients is conflict about billing, invoices and fees, in part because lawyers don’t track or enter time properly, send bills consistently, or create bills that are easy for clients to understand and pay.

There are many solutions for solo and small firm lawyers to get rid of these headaches, including full-featured practice management programs that include time tracking, billing and invoicing, calendaring, document and case management. But if you’re not ready for a complete practice management program (or if your practice management solution doesn’t include billing and accounting functions), and you’re looking for an easy to use, quick to deploy billing and accounting solution for your solo practice or small law firm, FreshBooks might be the answer for you.


I personally use FreshBooks for Legal Ease Consulting and it has become an essential part of my practice. FreshBooks is a cloud-based billing and accounting software program that includes a whole host of features to help you with your firm’s finances, and the dashboard makes it ridiculously easy to see where you are financially at any time.

Estimates

Clients like to know that their legal matter will actually cost them, not just what your billable rate is. Any time you can provide clients with an up-front estimate or budget, it’s a win for you (if you stick to the budget and explain variables that might affect the budget or fee in advance).

FreshBooks has an estimates feature that can help minimize that friction with clients whether you’re billing on a flat or fixed-fee basis or billing by the hour. They can also be great for clarifying the budget or scope of work, or for giving clients a roadmap of the steps that will be needed for their matter to reach a conclusion.

FreshBooks has estimate templates you can use, and they can be customized with your logo, colors and images. Clients can view and accept the estimate online, and you’ll be able to check the status in your dashboard to see whether the client viewed or accepted the estimate. You can also create discussions through comments to work through any questions the client might have. You can also use the estimates to compare to actual invoices and fees in the future to improve your budgeting and estimating skills.

Time Tracking

Tracking time is unavoidable if you bill by the hour. It’s always adviseable to keep track of your time as you are performing tasks for clients. This not only leads to more accurate billing, but it saves you the time it takes to attempt to re-create what you did later.

FreshBooks includes a timer that will help you keep track of how long you spend on specific tasks, and you can easily see how much time has been logged by your associates or staff. Time can be logged on the go with the FreshBooks mobile app.

Once the time entry is created, it’s easy to add it to an invoice. You’ll also have the added benefit of being able to see how much time is being spent on specific tasks so you can improve your productivity (not to mention your client estimates and budgets).

See more about Freshbooks time-tracking here.

Professional-looking invoices

The days of manual billing should be long past us, but too many solos and small firms are still sending invoices on the fly using a word processing program. Not only does this make billing and payments difficult to track, but it looks unprofessional and it takes up far too much time.

If you’re meticulous about your work product, your business cards, your website, and your appearance when meeting with clients, why wouldn’t you be just as meticulous with your invoices or billing statements?

Your invoices should be well laid-out, easy to understand, professional looking, and contain your firm’s name (and/or logo), address, descriptions of the work performed for clients and the fees charged. FreshBooks can help you with all of that. It’s easy to create invoices, set due dates, or even send recurring invoices for clients on a regular payment plan. Again, you can use the templates already in Freshbooks or customize your own.

One of the things I love about FreshBooks is that I can see the status of every invoice that was sent out. I check my dashboards periodically to make sure that none of my invoices were overlooked by my clients. I can see whether a client has viewed the invoice, and if they haven’t viewed it within a specified period of time, I can reach out to them to make sure it didn’t land in their spam folder or get lost in the shuffle somewhere, and I can easily re-send the invoice.

I don’t have to worry about following up for late payments, either. I can set up FreshBooks to send my clients a late payment reminder automatically if payment has not been received within the amount of time I specify. If you want, you can also add late payment penalties.

See more about invoicing with Freshbooks here.

Accept credit cards and online payments

Make it easy for your clients to pay you – and get paid faster – by sending clients online invoices and accepting credit card payments. One of the great things about using FreshBooks is that you don’t need to set up a separate merchant account and payment gateway or jump through a lot of hoops to accept credit cards.

If you decide to take credit cards, you need to set up the feature in FreshBooks (they take a percentage of the fee, similar to other credit-card acceptance platforms), click a button in the invoice, and your client will be able to pay you with a click of a button in the invoice as soon as it is emailed to them.

But if you don’t want to accept credit cards, you can still send online invoices and tell FreshBooks that you only want to accept checks – your clients will still get their invoice by email, which can significantly decrease your wait to get paid.

Find out more about accepting payments through FreshBooks here.

Expense tracking

If you connect your bank account to FreshBooks, you can automatically track and categorize expenses, and even pass expenses along to your clients where appropriate. Freshbooks will also let you take a picture of a receipt and add it to an expense, making it much easier at tax time.

If you don’t want to connect your bank account, you can add and tag expenses yourself. Either way, it’s easy to see what your weekly, monthly and yearly expenses are.

Financial reporting

Don’t wait until tax time to take a look at your firm’s overall finances. Financial reports can help you see where your firm stands financially at any time, and can give you insights into average fees, fees billed vs. fees collected, how much work was written off, and more.

In addition to the dashboard mentioned above, FreshBooks has a host of financial reporting capabilities to help you stay on top of your firm’s finances (and to help you and your accountant prepare your taxes!). These include profit and loss statements, accounts aging and expense reports, among others. You can sort, filter and customize reports so you get only the information you need when you need it.

See more about financial reporting with Freshbooks here.

FreshBooks is just one of the tools that I use in my practice – it makes dealing with my firm’s finances not only easy to use, but easy to understand. You can try Freshbooks for free, or look at the FreshBooks Pricing Page for full details on all of their plans. (If you click on these links and sign up for FreshBooks, I get a small commission at no additional cost to you, but I wouldn’t recommend FreshBooks if I didn’t think it could be helpful to you!)

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How to Do More In Less Time Podcast

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Having difficulty managing your workload? Think you could be more productive? My newest book, How to Do More In Less Time: The Complete Guide to Increasing Your Productivity and Improving Your Bottom Line may help. The first part of the book will provide you with strategies to help you manage your day to day tasks, while the second part of the book will give you specific tips on how you can shave time off of everyday tasks by using the software programs you’re already employing in your law practice more efficiently.

Want a preview?

Listen to this podcast interview with me and my co-author, Daniel J. Siegel.