Small Changes for Big Rewards:

Transcription

1 Small Changes for Big Rewards: Books & Records November 6 th 2015 Reference Material

2 FINANCIAL MANAGEMENT 2 Sound financial management of your practice is about more than just regulatory compliance. It is essential for good practice management. While most lawyers have a good sense of what is required, many do not recognize the opportunities created by the typical financial routines for effective supervision of delegated tasks, and management of files and clients. Many of the suggestions listed in this section fit well within a monthly review of your books and records. Topic Small changes Big Rewards Increase Control Understand what the reconciliation and comparison should record Prevent fraud and Understanding of Books & Records Block time monthly Reduce over-reliance Review reconciliations -- trust and general accounts look at the returned cheques as to payee and amount Detect errors promptly for easy correction Compare the trust journal balance with the client trust listing total Verify the original or online bank statement to accounting records Limit online access to accounting records Use a checklist to ensure a comprehensive monthly review of finances Manage unbilled Review client trust balances available to pay for unbilled and transfer funds Use retainer money to fund client No need to send an account -- it can be included as a paid amount in a later account Recover money you have spent Improve cash flow! Assess trust funds available for anticipated client expenses and ask client to replenish retainer if necessary

3 Topic Small changes Big Rewards 3 Monitor Legal Aid account deadlines Set up a tickler system for the legal aid funded billing dates or use a billing binder which lists the billing deadlines for each month Prevent loss of billing opportunity Reduce write offs by regular billing Monthly billing manages client expectations Establish event-based on hourly-based thresholds for interim or final bills Identify inactive files Improve client communication Reduce accounts receivable issues Have you ever written off money for which you could have billed if you had billed it earlier? Use Monetary retainers to manage practice finances Insist on payment before a client retainer is accepted and work started Discuss how the retainer funds will be applied at the initial retainer discussion Less personal funds needed to fund Funds available to pay accounts Keep track of trust funds on a checklist in a clearly visible location in the file Maintain an amount in trust sufficient to pay your last account, provided you are able to get off the record Reduce accounts receivable issues Get off the record or stop work before you are over extended or cannot do so without adversely affecting client Discuss costs at outset Retainer discussion checklist should include an estimate of the cost of the services required and factors that would increase costs Transparency with clients around billing improves client satisfaction Confirm this in writing Better response in paying accounts Reduce likelihood of fees dispute

4 Topic Small changes Big Rewards 4 Reduce time lost responding to complaints You can charge more for additional services where appropriate Avoid loss of Clients due to apparent inactivity Block time for a regular review of last activity on files Some accounting programs can run reports if dockets are well maintained if so run report monthly A regular file status review would also help with this Less complaints of lack of communication from their lawyer = less time away from billable work Maintaining contact with a client allows you to collect accounts more successfully -- It is hard to assess an unpaid account without a current address! Docket consistently Develop a daily docketing habit Use the timers in accounting programs or manually record time daily and later transfer to a spreadsheet software program Use sort or filter functions in software programs to create a time summary for a file Get a baseline of the cost of standard transactions You can determine profitable block fee rates and manage client expectations where unexpected work is required Use the chronology for client and file management and billings Maximize use of computer programs Have lunch with another lawyer and ask how they use their program Buy some training Use the programs effectively to free up your time and identify areas for improvement Set up a session in your area with some practitioners who have some knowledge of the program Find your information without having to paying your accountant!

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