Getting paid on time is becoming increasingly harder. Follow these tips to make it easier to collect your fees. 

 1. Get a Signed Retainer

Prepare a formal agreement clarifying the services being offered, how they will be billed, how they are expected to be paid, and what will happen if they are not paid. Sit down with clients to explain the details of this contract, and have it signed by all parties.

2. Give Discounts for Prepaid Services

Give clients an incentive to purchase prepaid blocks of time by offering services at a discounted rate. Provide discounts if payments are received before the due date and charge interest fees for late or non-payments. Write out the payment terms and due dates on statements.

3. Accept Credit Cards

Credit cards are the most popular form of payment tender today. Accepting credit cards and electronic check payments encourages timely payments. If clients do not have cash at the moment to pay their bills, they will rely on credit cards as a fall back.

Now is the perfect time to prepare a 2012 financial budget for your business. With your new goals in hand you can plan for major changes, and better predict your business’ future.

You can download our Microsoft Excel Law Firm Budget Plan from this website. After the Excel Budget Plan is downloaded, determine which accounts will be needed and which accounts can be deleted. Remember to add unexpected expenses like bonuses, parties, repairs and new purchases. Your budget can be created from scratch or from last year’s income and expense accounts. With this in hand you can project how much you need to spend in the new months ahead and how much sales you must generate to continue operating at a profit. This is easier to maintain if you have an accounting program like Tabs3’s General Ledger. Most professional law software have a built in budget calculator that lets you allocate budget figures for the current year and from the previous year’s income statements. Lastly, don’t get overwhelmed in creating your budget because these numbers are just a forecast of what your business might bring in and spend in the coming year. Being able see what accounts exceed or fall short of your plan enables you to make it a great year.

Excel Law Firm Budget Plan

If you have not reviewed your firm’s procedures on billing costs, this article might help you. As a consultant, I have experience in working in a variety of settings. Some firms are finding creative ways to recover for their  expenses.  Here are a couple of tips I’ve gathered along the way:

1. Some Costs Aren’t Being Billed Anymore

Things have changed in the last few years. Because of the low price of long distance calls, being at .02 cents a minute or less and (Voice over IP (VOIP ), some firms are no longer billing for long distance. Hardly anybody uses a fax anymore and most of the faxes are going to emails. Copies are sent in PDF format, also attached to emails, which means less and less printing and copy expenses.
Separate Soft and Hard Costs

2. Separate Soft and Hard Costs

Soft costs are photocopies, postage, faxes, long distance calls, etc. and hard costs are purchased done in advance for the client. Examples of hard costs would be check or credit card purchases for filing fees, court reporters, and FedEx.

3. Factoring Costs by Calculating a Percentage of Fees

There is a growing trend for law firms calculating soft costs by factoring in a percentage of their rates. This is usually 3 to 4 percent of their fees. They see these costs as an overhead expense. This saves them money on having to pay for cost tracking software and systems.  Your engagement letter can stipulate instances where your soft cost will be separated. This might not work in cases that you will have to submit costs to the court for reimbursement.  

Here are some articles on ABA Rules for recovering expenses.

https://www.abanet.org/tech/ltrc/publications/costrecovery.html

Small Business Growth 10 Year Projection

Knowing what technology will shape small business growth 10 years from now will better help you plan for the future.  That’s why Intuit and the Institute for the Future conducted a ten-year forecast examining how technology will influence small business and how these businesses will change society and economy. Their research is being published in as a three-part series called “Intuit Future of Small Business Report.”  

In early 2007, they released the first installment based on demographics and trends in small business.  They found three emerging trends affecting the way business will be conducted by 2017.

 

• New and Diverse Entrepreneurs.  More mixed groups will be the major source of entrepreneurs. There will be more women, immigrants, younger and older age groups, than in the past.
• More One Person Businesses.  More businesses will be conducted by one person with no employees because of changes in traditional employment and the rise of technology.
• Increase in Entrepreneur training.  The success of small businesses will increase because entrepreneur classes will be a major curriculum in schools. 

 

The second installment, released in June 2007, focused on technology trends and small business.  They identified three emerging technology trends that will most affect small business by 2017.

• Connectivity.  Small businesses will use networks, mobile devices, tracking devises, and digital infrastructures for more flexibility on when, where and how business is conducted.
• Inexpensive and easy Web services.  The faster and easier to use internet will increase small business presence and expand relationships.  Intelligent devises will enable interaction with the public.
• Wireless Marketing. The most important factor affecting customer’s purchasing decisions will be marketing on cell phones, mobile devises and automobiles.  Customers will be able to reach any company’s relevant information from anywhere and when they need it. 

 

The third installment, released in February 2008, confirmed what the two prior researchers predicted. Small business entrepreneurers will find it easier to compete with large companies:

• Collaboration. Greater chance for small niche businesses, especially artists and skilled workers, to compete because of social networks and the internet.
• Greater Small Business Opportunities. Small business will have the same access to products, resources and infrastructure abilities that only larger companies have had in the past.
• Small Business Globalization. Because of technology, small business will find it easier to connect throughout the world. Giving small businesses opportunities to new markets.

To read the reports go to:
http://www.intuit.com/futureofsmallbusiness/