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Clio-using lawyers get paid on the same day they issue a bill.
Most law firms wait an average of three months for clients to pay their bills. Clio-using lawyers have an advantage over these law firms because they don’t have to spend time tracking down clients and dealing with collections. Instead, Clio provides tools that make it easy for clients to deposit funds and pay their bills. These tools include automated trust accounting, integrations with online payment processors, and built-in credit card processing using Clio Payments, powered by LawPay.
Clio has just added another tool to help lawyers manage their finances — Trust Requests.
Trust fund accounting can be difficult for law firms. The normal rules of accounting are flipped because of the fiduciary duties imposed when dealing with a client’s funds. Most businesses treat money in the bank as an asset, client funds held by lawyers are actually liabilities under normal accounting rules. This is money that is owed, not money that has been paid. Because of this fiduciary duty, most business accounting systems have to be ‘tricked’ into documenting trust fund deposits in a compliant manner. Using ill-fitting business accounting software opens lawyers trust records to potential error, compliance risks, and a lot of headaches.
Practice management software is built to handle the special accounting needs of law firms. This software correctly documents the duties owed when holding client funds and also helps lawyers maintain their jurisdiction’s required records. For example, Clio’s trust accounting lets lawyers assign trust funds to clients, matters, or both. Transfer of trust funds are always documented — either between a client’s cases or to pay outstanding invoices. Lawyers can run trust and client ledgers with the click of a button. Trust accounting has never been easier for law firms.
One area where most general business accounting tools struggle is asking clients to deposit trust funds. Under the normal rules of business accounting, a firm cannot send an invoice for a trust deposit. An invoice is a bill for services already rendered. Advanced fee deposits to trust are not for work already performed, but for work that will be done in the future. Business accounting software is just not built to handle this specialized workflow unique to law firms. Sending a client a bill for trust funds can lead to miscommunication and messy financial records.
Law firms need a legal accounting system that can track requests for trust fund deposits, without treating those requests as outstanding, unpaid invoices. Clio’s new Trust Request feature meets this specific need. Trust Requests let law firms ethically request trust deposits in a documented manner. Firms can instantly generate a trust request that clearly labels the type and amount of funds requested. Lawyers can see when trust requests have not been paid and when money has been deposited. Best of all, Clio’s Trust Request feature keeps your business accounting free of improper entries.
With Clio’s new Trust Request feature, a law firm can instantly generate a request and send it to a client through email or secure message via Clio’s client portal. Records are automatically created, tracking the request and its payment status. In just a few minutes, before a law firm even begins working on a case, funds can be requested and deposited into a trust.
Clio Payments now let’s clients deposit funds directly into a trust account using credit card payments. Leveraging LawPay’s expertise of securely processing credit card payments, Clio-using lawyers can send trust requests that include a link to deposit funds online. Clients simply need to click the link and then enter their payment details. Clio automatically documents the deposit in the specified trust record. A lawyer can obtain an advance fee deposit into their trust account before a newly-signed client even leaves the office.
With Clio’s trust requests, clients can pay trust deposits in an ethically-compliant, yet easy manner. Lawyers never have to take time out of their day to deposit checks. Trust accounting records are updated with no chance of errors. When it is time to bill a client, lawyers can simply transfer funds from trust to pay each invoice. All of this means Clio-using lawyers get paid on the same day they issue a bill.
Want to learn about using trust requests in your law firm? Sign up for a free 1-hour training webinar on trust accounting and trust requests.
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How can you make sure clients still feel as good about you at the end of their matter as they did at the start? It's a matter of trust.October 16, 2018 0 0 0