How Legal Services Businesses Get Faster Invoice Payments
Why Legal Services Entrepreneurs Now Get Paid Lightning Fast on Client Invoices.
Whether providing independent legal services to businesses or the government, offering extended-term invoices that allow delayed payment for your customers is a great way to get new business. The drawback is that invoices are not cash flow, and they are not working capital, both of which are critical to your daily operations and for growing your business. Cutting too many invoices on deferred payment plans can cause liquid capital to evaporate and leave your company in a painful financial situation.
Because the risk of a cash flow crunch is higher in today’s shifting economic landscape, many legal service providers ask,
“How can my Legal Services business get paid lightning fast on invoices?”
Legal Services Companies get paid fastest on B2B and B2G client invoices using the Accelerated Invoice Payment System, invoice factoring, or invoice discounting. Invoice factoring works but suffers from a questionable reputation. Invoice discounters pay less than the invoice is worth and demand unrestricted access to all your clients. Accelerated Invoice Payment allows high-speed conversion of invoices into working capital and is a low cost, low risk system with dedicated account managers and easy qualifying.
Among the many costs that come with running a business, none are higher than paying for and retaining competent legal assistance, whether from law firms, paralegal companies, or investigative agencies. One way for companies to keep costs low is to outsource their legal needs to legal services companies that provide the services of licensed legal professionals and their skilled, trusted associates.
Legal services provides legal counsel and legal services to businesses or local, state, and federal government agencies. When businesses and other organizations need skilled, talented legal assistance, they turn to legal services providers.
When legal services firms contract with other businesses or the government, it is often on a pay-later basis. The service provider delivers the services, and the client, issued a billing invoice, gets to pay the amount due according to the terms (and by the deadline) of the invoice.
When Legal Services Companies Offer Extended Payment Terms.
Interestingly, the biggest users of the legal services business segment are the law firms to which such skills once belonged. Law firms trust, rely upon, and strategically employ independent service providers to fill service gaps for private, business, and government clients. For business owners, legal services businesses are a far more affordable option than using law firms that charge far more for the same work.
Decades ago, the disciplines offered by legal services companies were mainly located in-house at law firms, and everyone had to pay exorbitantly for that kind of overhead, branding, and reputation.
The great breakout of law firm revenue streams into independent businesses was enabled by advances in technology. Even more, the explosion of self-run legal service niches resulted from workplace paradigms elevating women by empowering them to leave behind male-dominated offices to strike out on their own.
To attract new business, legal services companies willingly extend longer payment options for potentially lucrative contracts. Extended payment terms on invoices can range from 30, 60, 90, or even 120 days or longer, depending on the demands of the clients.
You might think that every client would want to ensure they pay a legal service firm on time because, well, they are experts in the law. But, the topsy-turvy, inflation-driven, post-pandemic global economy has turned that idea on its head as more companies begin to pay slower or default on invoices entirely.
How Unpaid Invoices Act as a Barrier to Liquid Cash Flow
When your business conducts transactions with a business client or a government agency, they often ask for extended payment terms. You then meet the client’s request and bill them with an account receivable invoice, which serves as the bill telling the customer how much to pay by a specific date. That could be 30 days, 60, 90, or longer, as it would benefit both businesses.
The problem these days is that extended payment terms on client invoices put legal services business owners at risk of a major cash flow crunch just when you need liquid working capital most.
- When unpaid invoices begin to accumulate, it means that you’re doing your part as a business but not being paid until far down the road. In an uncertain economy, three months of waiting can mean the difference between a $10,000 invoice having $10,000 in purchasing power versus having far less purchasing power because inflation is driving up prices.
Loss of purchasing power is just one of the financial threats facing legal services companies that wait weeks or months to get paid. One example of this risk is the skyrocketing cost of maintaining a vehicle fleet because of haywire gas prices.
- Rising files of unpaid invoices can serve as an advance warning that your inbound cash flow stream is gradually being choked off to a mere drip. That means it’s harder for your business to pay for staffing needs, equipment, supplies, and extra inventory (when needed), and it can even prevent the business from growing because you don’t have the working capital to pay for the necessary logistics to compete for newer, larger contracts.
- The high inflation, high-interest rate, and pandemic-challenged economy make extending long-term payment plans riskier because so many companies are having a tough time making payments on time. The COVID pandemic’s effects on business worldwide are still being felt heading into 2023, with record numbers of business doors closing. A client who burns through thousands of dollars of your services might poof into thin air within a short period of recessionary predictions come true within the next couple of years.
Extended payment invoices essentially turn you into an unsecured lender, and if a client pays slowly or defaults, your business is left to carry the financial burden.
Despite still wanting to remain competitive by offering extended payment invoicing, finding the fastest way to get paid far earlier than agreed is an innovative, strategic financial move. Imagine how much easier your business life would be if you could issue payment terms but get your money within a few days without impacting the client’s agreement!
While other businesses struggle to generate cash flow by letting invoices stack up, your legal service company can become exempt, bypassing long waits to get paid right away on invoices. Here are a few options to help bypass lengthy payment waiting periods and open the floodgates of liquid working capital.
Quicker Invoice Payments: Three Top Options.
- Accelerated Invoice Payment System. As the best of three options, this ultra-modern financial network technology is the hands-down favorite for busy, independent-minded legal services entrepreneurs. Invoice payment technology has undergone a revolution that allows companies like yours to do extended-term invoice transactions while still getting paid almost immediately.
The way it works is simple and easy. After a fast prequalification, you can upload select invoices of your own choosing for conversion into working capital. The revenue is then deposited directly into your business bank account. The digital financial network that makes this possible is NowAccount.
- Invoice Factoring Services. With invoice factoring, a company will accept your invoice in exchange for a reduced price. You may not get the full value of your invoice for months after you trade it in and could be held liable if the client pays too slowly or perhaps defaults.
Some factoring firms charge hidden interest and bury unseen costs in their fine print, which, in the end, can be more expensive than a standard bank loan to your bottom line. The best approach to factoring companies is to approach them cautiously and investigate thoroughly.
- Invoice Purchasing Programs. Large corporations seek profitable invoices from your Account Receivables. Heavily laden with high-powered attorneys, invoice purchasing operations are sometimes aggressive and overreaching. After all, some, like Meta (owners of Instagram), are worth billions, and any business you conduct is to their advantage rather than yours.
Discounted invoice buying programs may demand access to your whole list of clients and, if there are any problems with the client, not only insert themselves into the business relationship. They may come after your business if they cannot collect payment.
Entrepreneurs tend to be independent, flexible mavericks who know their business thoroughly and who don’t like being forced to do anything outside the lines of the vision they hold. Any invoice payment system you choose to make drastic cuts in the time you wait to get paid has to allow the same kind of independence and flexibility, fostering trust between you and your payment provider.
By avoiding the pitfalls of invoice factoring or invoice purchasing, you can make the smartest financial decision by choosing the NowAccount Accelerated Invoice Payment System.
How Rapid Invoice Resolution Benefits Your Legal Services Business
NowAccount was built from the ground up to be the perfect fit for legal service companies ready to stop putting their business at risk and enthusiastic about getting invoices converted into working capital as quickly as technology allows.
- By registering and uploading your unpaid client invoices into your account, the first thing you find out is just how convenient and brief the pre-qualifying process is. Within minutes, your account can be set up and ready to begin submissions.
- When you upload your first invoice, you’ll find that each transaction is a no-interest, one-time, small flat fee that’s like taking a simple credit card payment. There are no hidden fees, disguised charges, or other costs involved. It’s your money, and you’ve earned it.
- NowAccount pays you the full value of the invoice minus the one-time merchant fee (yes, easy, just like a credit card). There is no ‘hold back’ – and no waiting weeks or months to get a leftover remainder after your client pays off the invoice. That’s no longer something you have to worry about. You get paid, and your NowAccount handles the rest.
- Assistance is easy to get to, thanks to your own dedicated account manager who will work with you to smooth out any hiccups and help you process invoices more efficiently for rapid payment so that there’s no additional delay on your money.
- After you have been compensated for the invoice, NowAccount will never bother you or your company to collect payment from the client. The client won’t even know that you’re getting paid right away while they still enjoy extended payment terms. Everybody’s happy in that win-win scenario.
- Your company can compete for more business and larger contracts because you’ll have the liquid capital to acquire any logistics, supplies, and personnel needed to meet the demands of a competitive bid. Getting paid quickly gives you a decided advantage over competitors forced to wait for the money to arrive.
With the NowAccount accelerated invoice payment system, you’ll reduce stress, enjoy more entrepreneurial freedom, delight in unrestricted cash flow, and place your business in a working capital position that can sustain it for years to come.
Take Your Legal Services Company to the Next Level with NowAccount.
There is no longer any reason for your legal services business to suffer through painful invoice payment waiting periods that can drag on for months. Empower yourself and your company by making the most brilliant financial move possible for a B2B or B2G provider:
Start getting paid almost immediately with NowAccount to grow and scale your business fearlessly. Easy, fast qualifying, secure, private, low cost, and transparent. Release the brakes on your cash flow and build solid working capital from this day forward.