Quick Take
- Cash flow management in law firms is a high stakes relay race where missed handoffs result in delayed invoices and inconsistent A/R follow-up
- Invoices-to-Cash workflow automation creates seamless handoffs across the billing cycle
- Real world results: firms average 15 days reduction in A/R turnover and an increase of 150 basis points in collected realization
The Law Firm Cash Flow Relay
The complexities inherent in the billing process frequently lead to dropped handoffs resulting in delayed invoices, inconsistent unpaid follow-up, mounting work-in-progress (WIP) and increasing accounts receivable (A/R).
Recent data underscores the urgency of the issue, with law firms experiencing a 11.1% increase in WIP and 14.2% rise in A/R in 2024, according to Citi Hildebrandt.
That’s why firms are turning their attention to a deceptively simple concept: seamless handoffs across the billing cycle, with technology-driven workflows that deliver precision timing and team alignment.
Four Stages of Billing
There are four major steps in the cash flow relay:
- Tracking time
- Pre-bill editing
- Bill processing
- Invoices-to-cash – where the firm actually gets paid
Let’s zero in on the final leg of the relay—turning finalized invoices into collected revenue—where most firms still rely heavily on manual processes and fragmented systems.
A Race Within a Race
Despite investments in time capture and prebill solutions, the handoffs at the final stage of getting paid remain the most error-prone. In many firms, once bills are finalized:
- PDFs are manually emailed from Outlook using pre-bill notes, spreadsheets or Word docs to determine recipients and wording
- Attorneys and their assistants often take over bill delivery, limiting accounting’s oversight
- A/R follow-up is reactive, initiated after manual aging report reviews and routed through attorney approvals
- Tracking and follow-up notes are siloed in the collections department
- Clients must navigate separate workflows to pay by eCheck/ACH or credit card—often entering the same information every month
This workflow isn’t just tedious—it actively works against strategic collections management. There’s always too much to do, and never enough time to step back and improve it.
You can see it in staffing: 81% of firms have increased billing and collections personnel over the past five years, with many expecting further growth (Citi Hildebrandt). This is a clear sign we need a better approach.
Enter: Invoices-to-Cash Workflow Automation
The good news? The technology to fix this exists—and firms are already seeing results. A modern, integrated Invoices-to-Cash solution brings workflow automation to every step of the post-bill process.
Here’s what best-in-class looks like:
- Bill delivery workflow that incorporates client, matter, and attorney preferences—with embedded approval and routing logic
- Automated A/R notices generated and tracked based on business rules, with full customization and optional attorney sign-off
- Centralized tracking of every billing and collections activity, giving accounting, attorneys, and support staff shared visibility and accountability
- Client portals that combine online billing access with an intuitive, elegant payment experience—accelerating payment cycles and reducing client friction
It’s All About the Exceptions
Law firm billing isn’t hard because of volume—it’s hard because of exceptions. Nuanced client and billing attorney expectations make every billing event a potential detour.
That’s why the technology must be flexible. Rigid systems won’t cut it. Automation must be flexible enough to manage the exceptions while keeping accounting and attorneys in the loop as needed.
Attorney Engagement
A common area for dropped hand-offs is when attorneys are engaged in delivering bills or working on A/R follow-up. Invoices-to-cash automates collaboration between attorneys, assistants, billers and collection professionals. Accounting now has oversight in the whole process, attorneys have appropriate control and input and everyone saves time.
Why Client Portals Are a Game Changer
Client portals aren’t a “nice to have,” they’re essential:
- Simple, consistent payment experiences improve collection rates
- Self-serve billing information improves client satisfaction
- Line-item payment allocation enables rapid reconciliation in accounting
In an era where clients demand consumer-grade service experiences, your billing process is part of your brand.
Industry Adoption: Real Results from Real Firms
This isn’t hypothetical. Firms adopting invoices-to-cash platforms are seeing real-world impact:
- Average 15-day reduction in A/R turnover
- Average 150 basis point increase in collected realization rates
Whether it’s a top-tier AmLaw firm or a fast-growing regional practice, the message is the same: automating the final mile of the billing process delivers measurable ROI.
RESULTS
Client portal and online payments drive an additional average reduction in A/R turnover of 30 days
Final Lap
In law firm financial operations, the invoices-to-cash cycle is the final handoff in the race that defines firm health. In today’s market, you can’t afford to drop the baton. Firms embracing invoices-to-cash workflow automation aren’t just catching up—they’re pulling ahead.
How We Can Help
- Learn more about BillingQ, the industry-first law firm invoices-to-cash solution
- See the impact of PayQ law firm client portals
- Learn from other firms’ experience with legal invoices-to-cash case studies