Improving your revenue cycle is about more than billable hours, accounts receivable, and on-time payments. But there are small adjustments throughout the WIP-to-cash process that could improve your profit margins.
Re-examining every step of the process
When Jennifer Garner and John Foraker set out to make WIC-eligible organic baby food, they had a problem. Their product, baby food from Once Upon a Farm, was too expensive to be covered by the government-run supplemental nutrition program.
Slashing the cost of the product wasn’t an option, so they re-examined every step of the supply chain.
Where was packaging made, and how could it be made more efficiently? How far were materials shipped, and how could they reduce that distance to bring the cost down? On and on they went, scrutinizing every step of the process, until they were able to trim enough expenses to make their products WIC-eligible.
Helping law firms examine their processes — and improve the margins
Most law firms aren’t shipping products around the world, but the lesson is the same. If you want to improve your profit margins, it’s important to examine every step of your process.
Aderant and ClientPay partnered to create a whitepaper on that topic. Download the paper — Beyond Billable Hours — to examine five core areas where most law firms can operate more efficiently, and in the process, improve their WIP-to-cash cycle.
5 challenges that affect the WIP-to-cash cycle in law firms
1. Cultural clashes
Becoming most efficient starts with a tough task — getting approval from all the stakeholders at the firm. One of the biggest challenges there is the clash of cultures between the traditional corporate and legal cultures.
The corporate culture is driven by innovation, mobility, and agility. By contrast, the legal culture tends to be process-driven, cautious, and concerned about reputation.
Today, the most successful firms meld caution with innovation, agility with process.
2. Inefficient operations
Law firms face increasing pressure to demonstrate more value and deliver services more efficiently. Often, however, corporate structures and ineffective recruitment hampers that. Firms that are loyal to a “this is how we’ve always done it” mindset can be slow to change inefficient operations.
One major way to improve efficiency can be updating your operations.
3. Too much technology
Technology can make your process more efficient. But the opposite is also true. When you need to move between too many technology systems, it feels like a chore. It detracts from the practice and business of law, rather than adding to it.
Too many technology systems — especially systems that don’t talk to each other — leads to aversion. This delays time entry, bill editing, collections, and ultimately holds up the entire process of converting WIP to cash.
4. Inefficient processes
Process improvements can be one of the easiest and least expensive ways to improve the bottom line. For example, mapping out the entire billing process can highlight inefficiencies and opportunities for automation.
The right technology can eliminate redundancies immediately and provide ongoing data for continual improvements.
5. Moving the wrong tasks to mobile apps
As lawyers do more work on the go — whether that’s at home on the weekends, on the bus to their offices, or in the Uber on the way to client meetings — they need more elements of their work available in mobile apps.
One mistake some firms make is trying to convert every element of the job to mobile apps. In reality, some work needs to be on a desktop or laptop computer. Tasks that should be available on mobile apps include:
- Obtaining client information
- Managing expenses
- Initiating and approving billing
- Reviewing, editing, and approving pre-bills
Learn how to optimize the entire WIP-to-cash cycle
It takes time, patience, and effort to examine every step of your process. But the reward — the improvements in the WIP-to-cash cycle — can be worth it. Interested in learning how to operate as a more modern and efficient organization?