Taking care of business, every day — fun to sing, but not always fun to do. Even so, financial reporting — billing, recordkeeping, hour tracking and more — is essential to a successful practice. In fact, poor accounting is one of the reasons many small businesses fail, according to The New York Times. Here are some best practices to keep your business running smoothly and profitably.
Track your hours. It’s no one’s favorite task, but tracking hours is essential to getting paid — which is many people’s favorite part of work. Failure to record hours as you log them is the number one mistake beginning lawyers make, according to Temple University. And consistency is essential, says LexisNexis’ Business of Law blog, meaning everyone in a practice should track their billing the same way, whether that’s by hours or dollars earned, to make keeping track easier.
Report your hours in a timely manner. Memories are faulty. Noting your hours the day you work them will ensure that you report all the hours you work — and prevent the task from piling up.
Review accounts regularly. According to the Business of Law blog, you should bill clients regularly. It’s better to make the client aware of any special charges close to the date of service, so they can understand what they’re paying for.
Monitor submitted invoices. It should be enough to send a client an invoice, but often it is not. The Business of Law blog notes that you need to be aware of whether clients are paying — in part because you need to be paid, but also in case the client isn’t happy with the work performed. If your client isn’t satisfied, you need to correct that perception as soon as possible to protect your firm’s reputation. If there is a problem of any kind, contact the client and talk about it openly.
Track your firm’s payments as well as its invoices. Careful monitoring doesn’t concern just your earnings. Regularly check any payments you’ve made to vendors or others to be sure checks are cashed and funds are accounted for. It’s better to know sooner rather than later about a payment you still need to address.
Keeping track of billing, hours and accounts isn’t glamorous, but your business can’t function without it. Staying on top of the essentials means your business will run more smoothly so you can focus on what you really want to do: your work.
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