Can new products and upgrades lighten your workload? How close are your timekeeping, billing, and accounting programs and practices to the current state of the art? How can you make your clients happier and pay your bills faster? Find answers to these questions and more in this discussion of ten attributes of state-of-the-art back-office systems.
I will mention a few products and services for illustration. This does not means that those mentioned are the only state-of-the-art products available. Excellent new back-office solutions come on the scene each year, and long-standing products add and improve functionality each year. No one product has every attribute. The intent here is to provide a look at the attributes that comprise a high level of functionality and innovation so that you can see how your systems measure up—and consider changes that will benefit you and your clients.
Cloud-Based or Hybrid Cloud Systems
Today’s state-of-the-art back-office systems operate at least in part in the ubiquitous cloud. This alone does not make the product state of the art. Other attributes must be present. Operating your billing and accounting system in the cloud has its advantages and disadvantages. The feature sets of fully cloud-based back-office products are not yet as robust as the mature desktop products. Web interfaces may be more cumbersome to navigate, especially for those of us who are proficient at using keyboard shortcuts. Customization options are limited. Nevertheless, there are compelling advantages to operating in the cloud.
Save the time and expense of in-house software and hardware management. Instead of installing applications onto your own computer, they run on a shared data center server. When you use an application that runs in the cloud, you just log in with your web browser and start using it. You don’t have to install the software to each computer. Updates just happen. This means you will save time getting up and running. Cloud applications require only an Internet connection, so they can be run from a variety of inexpensive desktop computers, laptops, and, in some cases, handheld devices.
Platform and location independence. Cloud-based systems typically operate on any device with a browser—PC, Mac, smartphones of every type, tablets, pads—anywhere you can connect to the Internet.
Reliability and security. The cloud model provides for redundancy. If a server has a problem, your data is still available because it has been stored on multiple servers in the cloud. Cloud security is as good as or better than that of traditional networks. Solos and small firms often don’t have the resources for maintaining in-house network security. Although the cloud offers sophisticated security technology, users have no way to verify that their cloud data is secure. According to the 2011 ABA Legal Technology Survey Report, only 16 percent of firms surveyed are using cloud-based systems. Nearly half were concerned about security and control. When you store your data in the cloud, you trust the data centers to meet your security requirements.
Pay as you go. Subscriptions to cloud-based applications are typically priced monthly. This will help you get started if your budget is small (but it will cost significantly more than desktop software in the second year and beyond).
Hybrid cloud solutions. Using a traditional desktop billing system with a cloud-based add-on gives you the best of both worlds. Nearly every popular desktop time and billing system offers a cloud-based time and expense entry option. Timekeepers connect to a website to enter time and periodically import the records into the firm’s main billing database. One of the earliest hybrid cloud back-office solutions was Sage Timeslips’ eCenter. Some other hybrid cloud back-office systems are RTG Timer Online and LexisNexis FirmManager. Although they offer a convenience to timekeepers away from the office, they are disconnected from the main database. You must diligently synchronize your cloud data with the local database. Other hybrid cloud systems such as Time Matters Mobility and PCLaw Mobility and Amicus Mobile send data directly from the cloud to your server as you work (for more, see Mobile Time Tracking, below).
Hosted desktops. Another twist on cloud-based technology is desktop hosting. Vendors such as KubeLegal offer hosted desktops that work like a traditional PCs but, in the words of this company, “instead of residing locally, all software and data resides at state-of-the-art data centers.” KubeLegal provides the Microsoft Office suite (Word, Excel, Outlook), firewall, anti-virus, and backup software. You install your own back-office software. For $98 per month per desktop, you remove the burden of managing individual desktop environments in-house. Some service providers host single applications. Trapp Online will host QuickBooks for $49 per month for a single user. Other advantages of desktop hosting are access to your programs and data from any web-connected computer, as well as maintenance of the software and data (backup) being handled by the hosting company.
Automatic Time Capture
In her book, Minding Your Own Business (ABA Publishing, 2010), Ann M. Guinn warns that if we fail to record time contemporaneously, “we always underestimate the time it took to do something.” This can be costly. Just six minutes lost each day at $200 per hour is $4,792.50 lost per year.
Automatic time-capture software can help you avoid these losses. Such software monitors your computer activities and captures and categorizes your time. Chrometa captures and uploads your computer activities to its cloud servers hourly. After time away from the computer, Chrometa welcomes you back and allows you to categorize the away time. Do you tend to forget to start or stop the timer in your billing program? No problem. Chrometa has an excellent timestamps report that lists chronologically the starting and ending time for all of your activities. It’s a great report for reconciling time you’ve manually entered (or should have entered) into your billing program. Chrometa exports the captured data to Excel for import to any billing program. It also includes its own invoicing tool and integrates with Basecamp and FreshBooks. (For a full review of Chrometa, see the June 2010 issue of GPSolo)
WorkTRAKR by Proximiti does for communication equipment what Chrometa does for computers. It records your use of phones (both office and mobile) and integrates with several popular legal billing programs. It also captures computer activity.
Mobile Time Tracking
Although vendors have long provided mobile time- and expense-tracking solutions, adoption has been slow. Difficulty navigating small mobile screens and other user experience deficiencies have rendered mobile-device timekeeping impractical for many attorneys. The greatest drawback is that some of these add-ons require synchronization to the main database, an often-cumbersome task that consumes otherwise billable time. iSlips, an iPhone app for Timeslips users, lets you enter time and expense charges on the iPhone and transfer them wirelessly to Timeslips. The data is stored on the iPhone, so frequent synchronization is recommended. A more state-of-the-art solution is direct-to-database entry from the mobile device. Products with this feature can help you to capture time and save directly to the main database. I recently introduced an attorney to the new PCLaw Mobility add-on. She was intrigued by the concept, but execution was awkward. Because it is a website and not an app, you must open the browser, log in to the Mobility site, navigate to the matter via search, then click the time entry icon, enter your time, and so on. Cloud-based solutions such as Bill4Time offer mobile apps that send your time entries direct to the database from a mobile phone. Because most of us have become proficient at sending e-mails from a mobile device, an alternative is to e-mail time entries. Most billing systems integrate with Outlook and with a click or two can convert an e-mail to a billing entry. Timeslips will even scan your Outlook inbox for messages formatted as time entries (according to rules that you set) and automatically convert them to slips.
Hassle-Free Electronic Bill Delivery and Retrieval
Paperless billing. It has been predicted that by 2016, more bills will be presented electronically than in paper. If you are not providing this option to your clients, it will take you longer to get paid. Your billing system should make it easy to e-mail PDF copies of bills. It should also automatically create an appropriate e-mail message with the PDF bill attached as it processes your bills. For example, Tabs3 lets you create e-mail message templates containing appropriate text, including tokens from the database (invoice number, client name, matter name, etc.), and delivers the statement direct from the program via e-mail.
If you have clients who require invoices in LEDES98B or other auditable formats, the state-of-the-art systems will generate these automatically. Some vendors charge an additional fee for these formats.
Easy storage and retrieval. All bills, whether e-mailed or snail-mailed, should be easy to retrieve so it is no hassle to provide the client with another copy of a “lost” bill. Timeslips recently added a client folders option that will automatically store the PDF copy of the client’s bill in the folder you have designated for the client’s documents. So you no longer need to step through the Timeslips reprint bills interface. The bills are there where you want them. Tabs3 automatically creates a statement folder with subfolders by date. LexisNexis Billing Matters can automatically add a profile for each bill to the Time Matters document management system for easy retrieval. With Clio you can make your clients’ bills available to them in an online folder (see Online Payment, below).
One way to make it easy for your clients to pay is to accept online payments. Cloud-based back-office systems are naturals for online payment handling. With these systems, everything is online, so why not receive payments online, too?
With Clio, you set up your online payment method (PayPal, LawCharge, or LawPay), run your bills, and with two clicks notify your client from within Clio that a new bill has been generated. Clients receive an e-mail with a link to their Clio Connect page containing the bill, prior bills, and other documents from their file that you have chosen to share with them. From here clients open the bill, click “Pay Now,” and you’re paid. No more taking calls regarding past bills, reprinting bills, or rifling through files for copies of bills. This one-stop handling of the bill and the payment makes state-of-the-art use of the cloud environment.
For desktop billing systems, you may set up your e-mail message template to include a link to your online payment page in the e-mail.
Integrated Credit Card Processing
If you receive credit card payments in your office, save processing time by using software that handles the credit card transactions. Here are the typical steps for firms working without integrated credit card processing:
- Swipe the client’s credit card, or key in the information to a card reader if the card is not present.
- Print the receipt from the card reader.
- Hand-write a receipt, using a carbonless copy system.
- Staple the card-reader receipt to the handwritten receipt and give it to the client.
- Enter the payment into billing system.
Here are the typical steps with integrated credit card processing:
- Start entering a new payment in the billing system selecting “credit card” as the payment method.
- Swipe the client’s credit card, and the information is captured by the billing system. If the card is not present, key the information into the payment screen.
- Click “OK,” and a receipt prints for the client.
Tabs3 includes integrated credit card handling, allowing you to quickly process a card and give the client a receipt. It handles both general payments and trust account deposits. The latter requires Tabs3 Trust Accounting software. Timeslips and PCLaw offer similar functionality. To use integrated credit card processing, you will need to establish a merchant account with the company providing the in-program processing for your software.
A state-of-the-art billing system can merge billing-related correspondence such as fee agreements, invoice cover letters, and past-due letters. Timeslips recently added a custom template development option for letters to clients. And don’t forget the most important document: the bill. A state-of-the-art system will present multiple, easy-to-select bill formats and provide an intuitive tool for modifying the format, if needed.
The QuickBooks Connection
Guinn recommends monitoring your firm’s financial health by regularly reviewing reports such as annual gross revenues, hours billed per day, effective hourly rates, and overhead-to-income percentages. Some reports can be derived from your billing system; others will come from your accounting system. Most solos and small firms use QuickBooks for check writing, managing payables, and communicating their financial activities to their accountant, so the state of the art has been and continues to be connectivity to QuickBooks. Bill4Time connects to QuickBooks, including the online version. Clio can export bills and transactions to IIF format for import into QuickBooks. Even systems such as PCLaw, Tabs3, and Amicus Attorney that contain full accounting functionality also offer a link to QuickBooks. The key is to understand which financial information is available in your billing program and which is available in QuickBooks and to connect the two in an efficient way. Links with QuickBooks may include sending transactions to QuickBooks and receiving payables or check information from QuickBooks for billing to your clients.
Online Payables Management
Save on checks and printing costs by handling all your payables online. Sites such as Bill.com provide web-based centralized management of all your electronically paid vendors. Bill.com integrates with QuickBooks and Peachtree, and the mobile version loads automatically when you access Bill.com from your smartphone. For vendors that require a check, Bill.com will send a check for you.
Optimal User Experience
The top legal billing vendors invest in product development largely in response to user demands for an optimized user experience. That’s jargon for “make this thing easier to use.” Ease of use can mean anything from how many clicks it takes to print a bill, to how well the program uses color coding, to technical stability. State-of-the-art functions are wasted if they are not accessible to you. This is obvious, but optimal user accessibility has taken time to achieve, and it is still developing.
Key information at your fingertips. Seattle attorney Will Crowley likes the reporting capabilities of Timeslips because the information he needs to know is presented automatically on a dashboard when the program starts. There’s no need to work through report menus, submenus, and template options to get to critical data. The built-in dashboard selections include clients with overdue balances, recently entered time, and recent payments. You may develop your own dashboard selections with a little learning or by engaging a consultant to develop them for you.
Simplicity. A state-of-the-art user experience does not require the latest in graphical effects. Seattle attorney Evan Loeffler has used the low-cost, no-frills RTG Bills for years and loves it. Why? Because “it works, it is very stable, the customer support is timely and helpful, it has excellent documentation, and it is intuitive.” The makers of RTG Bills have provided the options most often used by solos and small firms. The easy-to-follow rate table tool, for example, handles only timekeeper rates, the most common rate type. The rate table window is uncluttered and easy to follow, containing instructions so that you can’t go wrong. The bill format choices are clearly explained and easy to implement. If there is a billing system that you and your staff can learn to use on your own, this is it.
So, how do you transition your back-office systems from meager to state of the art?
Upgrade required. I’ll start with the obvious. You won’t have a state-of-the-art system if your billing software is several versions behind. Upgrade to the current version. Don’t expect to achieve state-of-the-art back-office management by moving your years-old software to a new computer. Be sure your software upgrade helps to close your productivity gaps. If you are diligent about timekeeping but become bogged down when it comes time to invoice your clients, the upgrade should include functions that will help you to deliver bills to your clients more promptly.
Fit your practice. The ten state-of-the-art attributes listed above are not all found in any one program, and all ten are not all necessary for every firm. Weigh the value of each for your firm, and plan an upgrade with the functions most beneficial to you.
Latest-and-greatest syndrome. By the time this article is published there will likely be more state-of-the-art characteristics on the market that aren’t mentioned here. It is acceptable to be a few months or even a year behind the latest version of desktop back-office software. (Cloud-based upgrades are automatic and part of your subscription.) Simply having the latest and greatest software does not make your practice state of the art. Putting it to effective use does. Take time to learn all the capabilities of your software. Prioritize your requirements. If you decide to implement new back-office systems, consider all the costs of migration. Talk to others in your practice area who use the system you are considering.
Most of all, remember that software is just a small part of your practice. Your clients, your staff, and the service you provide are the big parts. Your software should serve these, not vice versa.