Accounts Receivable Management for Law Firms

The AR Challenge in Law Firms

Many law firms carry 60-90 days of receivables—that's significant working capital tied up in unpaid invoices. Effective AR management frees cash and improves firm health.

Best-in-class firms maintain DSO under 45 days while average firms exceed 75 days.

AR Management Fundamentals

Billing Promptly

• Send invoices immediately after month-end
• Don't delay for perfection
• Use electronic delivery
• Confirm receipt

Clear Payment Terms

• State terms explicitly on invoices
• Include in engagement letters
• Communicate expectations upfront
• Enforce consistently

Easy Payment Options

• Accept credit cards
• Enable ACH payments
• Offer online payment portal
• Provide payment plans when appropriate

Collection Process

Structured Follow-Up

1. Day 7: Confirm invoice received
2. Day 30: First reminder
3. Day 45: Partner phone call
4. Day 60: Formal collection letter
5. Day 90: Final notice / escalation

Communication Tips

• Be professional but persistent
• Ask about payment timing
• Address disputes promptly
• Document all contacts

Analyzing AR

Aging Reports

Track outstanding amounts by:

• 0-30 days (current)
• 31-60 days
• 61-90 days
• Over 90 days

Client Analysis

Identify patterns:

• Chronic slow payers
• Dispute-prone clients
• Payment timing preferences
• Volume vs. collection behavior

See our analytics guide for detailed reporting.

Problem Account Strategies

Slow Payers

• Require retainer replenishment
• Move to shorter billing cycles
• Request advance deposits
• Consider withdrawal

Disputed Invoices

• Resolve disputes quickly
• Adjust legitimate issues
• Collect undisputed portions
• Document resolution

Non-Payers

• Assess collection likelihood
• Consider write-off timing
• Evaluate external collection
• Learn and prevent repeat

Technology Solutions

AR management tools provide:

• Automated reminder workflows
• Real-time aging dashboards
• Payment processing integration
• Collection activity tracking

Metrics to Monitor

• DSO: Days sales outstanding
• Collection rate: Percentage collected vs. billed
• Over-90 percentage: Aged AR proportion
• Write-off rate: Uncollectable amounts

Accelerate your collections. IntelliBill automates AR management workflows.

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