Redwood Analytics

1 DAY. How can one day have any effect on a law firm's cash flow?

When I first read this news I thought to myself, "so what, who uses snail mail anymore." Mail seems so old fashioned compared to all of the other technologies we use today. For example, online bill pay, electronic payroll, and technologies like email and text messaging. But most law firms still deliver their invoices via mail. The decision on ending next day mail doesn't just affect your incoming mail that might include payments from your clients, but also how long it takes to get your invoices to your clients for review and payment. The decision to end next day could impact your cash flow more than you think.

According to the online publication CFO, they estimate this decision made by the US Post Office adds a couple of days more to receiving checks and can tie up millions of dollars in working capital.

That brings up a few good reasons to consider alternative ways to deliver invoices and accept payments.

Invoices can be delivered in many other ways than snail mail.

• Invoices can be delivered electronically via email. Many legal specific financial systems provide ways to set up an email associated to the matter and will send a PDF copy of the invoice via email at your preference. And for those clients who have multiple matters, you can send multiple emails to the same client for convenience sake.
• Then there are share point sites where the law firm provides a secure way for clients to log in and gain access to documents and files that you decide which can include copies of invoices.
• And for large corporate, insurance, and financial clients, many of them are demanding an electronic bill in the LEDES format that goes through a 3rd party billing company who audits and processes the invoices. If you have this option, you should take it, the leading financial and billing programs have the required formats and the payment process tends to be a quicker turn around than the traditional invoice and check method.

The most typical acceptance of client payments is in the form of a check and other alternative payment methods are available.

• Electronic wire payments - where you provide your clients a way to make a payment through their online banking institute directly to your account.
• Your firm can choose to accept credit card payments via phone or an online service. And while there is a nominal fee for processing, the fee typically is less depending on the number of transactions and amount of money going through the credit card vendor. Some firms have installed a PayPal^TM plug-in on their web site to make it easier for clients to pay their bills.

If your firm is mailing out invoices, be sure to keep in mind this new decision and know that every day your invoices are not mailed can impact the cash flow of your firm more now than before. And if your firm is still receiving checks in the mail from clients, consider some alternative ways to accept payment in order to minimize the time it takes to get paid.