Automated prebilling for law firms: Improving proforma processes to prevent revenue leakage and accelerate the billing and collection cycle

A man working form home looks at data and charts on his tablet and laptop

For law firms without automated prebilling, proforma invoice creation entails a series of laborious manual tasks that create many opportunities for human error.

After collecting time-tracking data from timekeepers, billing teams categorize, consolidate, and apply time entries to the appropriate matters, rekeying the data to create bills. When those bills are ready for review, partners print them out for markup and jot notes on the hard copies. When those corrections have been addressed and the bills have been approved, billing teams then transcribe those paper bills into the firm financial management system, secure signoffs from partners, and send the invoices to the clients.

The inefficiencies are obvious, and the business implications are significant. Each manual step introduces the potential for errors and noncompliance, whether through rekeying errors, hard-to-read handwritten notes, or line items that don’t comply with outside counsel guidelines. And when clients find billing errors, they return those invoices unpaid — forcing lawyers to invest unbillable time into researching and rectifying the errors and negotiating discounts, write-offs, and write-downs to appease clients. How much they’re conceding isn’t always transparent, so before long, the matter in question can become unprofitable — and at scale, this is a huge problem for operations, finance teams, and the firm’s bottom line.

Intapp Billstream provides end-to-end coverage throughout this process, with dynamic workflows spanning the prebilling lifecycle from timekeeping to proforma invoice creation. Powerful editing, search, summary, and quick-action capabilities ensure billing teams have the tools they need to succeed.

Contending with the burden of disconnected processes

During the pandemic, many firms evolved their proforma processes to a file-share solution with rudimentary workflows — a logical next step since they needed to act quickly to support their remote teams. Although this approach offered some improvement over fully manual processes, they were essentially recreating electronic versions of their paper processes without much progress toward greater efficiency, visibility, or acceleration of the billing and collection cycle.

Today, many legal billing teams continue to struggle with tracking progress and gleaning insights. This is largely attributable to disconnected processes: Their firms’ timekeeping solutions don’t integrate with their billing systems, and there’s no closed-loop compliance layer embedded in the cycle — increasing the likelihood of costly billing errors that result in revenue erosion. Disconnected proforma processes also limit your team’s ability to support growth initiatives, because as your firm grows, the quantity of bills increases, requiring more resources for manual transcription and data processing.

If your firm isn’t considering adding the automated prebilling capabilities that Intapp Billstream provides — including always-on visibility into your proforma processes — you’ll have to invest in additional headcount to handle the increased workload. Intapp Billstream builds intelligent workflows that streamline and build important connectivity to previously disconnected processes, eliminating the need to add additional resources to support growth. Providing full visibility into proforma and invoice progress, your billing team is empowered to produce timely and accurate proforma invoices at scale.

Addressing revenue leakage and discounts

Revenue leakage — which refers to uncollected revenue related to timekeeping and billing inaccuracies — can significantly impact realization rates and profitability. Leakage starts with timekeeping issues: missed or under-recorded time, noncompliant time entries, and lagging time entries, which are often attributable to lawyers reconstructing their timekeeping data days after the fact and without real-time guidance for compliance requirements.

As the timekeeping data moves through the proforma process, noncompliant time entries land on the prebill, compounding other errors and irregularities associated with inaccurate time and effort insights and bills that don’t make it through the e-billing process. Often, partners fielding unhappy calls from clients contesting their bills make concessions to keep the relationship on track. Without automated prebilling, these discounts, write-downs, and write-offs are untracked, which means firms don’t have visibility into why or how much revenue has leaked as a result of timekeeping and billing errors.

Firms using Intapp Time already benefit from automated activity capture, embedded compliance, and desktop-level mobile features that accelerate and ease the burdens of timekeeping. Intapp Billstream adds additional value by converting that data into billing — and, critically, establishes accountability for discounting. Because Intapp Billstream automates change tracking throughout the billing cycle, with options to add alerts and escalations for discounts that exceed established thresholds, your firm is protected from revenue leakage that might otherwise go undetected.

Accelerating the work-to-cash cycle

If you’re not using an integrated compliant time and billing solution to create invoices, you’re dealing with process gaps that extend the duration of the billing cycle — and that means you’re not getting paid as quickly as you could be. Too often, prebills are managed via a disconnected process — usually between billing teams, lawyers, and legal project management staff — and these protracted billing and collection cycles impinge on realization rates.

With Intapp Billstream, your billing team can automate proforma processes with seamless integration to and from your firm’s financial management system. Partners have unfettered, always-on access to their proformas, with built-in firm-specific workflows to facilitate reviews and approvals. There’s no need to track down partners for their signatures since they can provide approvals inside Intapp Billstream. The right-back to the financial management system eliminates the need for billing teams to interpret, confirm, and rekey data.

Because Intapp Billstream applies an integrated and automated approach to extend the compliance and accuracy from time entries via Intapp Time while achieving continuity in prebilling, your firm can accelerate billing and collection cycles, keep up with non-standard billing cycles, and meet your clients’ expectations.

Leveraging integration and automation to deliver compliant time and billing

To prevent revenue leakage and improve realization rates, your firm needs purpose-built automated solutions designed to work together to deliver on compliant time and billing.

Intapp Terms gives you the visibility you need to manage increasingly complex and demanding outside counsel guidelines, empowering you to promote enforcement with confidence. Because the solution centralizes and streamlines storing, categorizing, and approval-routing for client mandates, your firm remains continuously in compliance.

While Intapp Terms addresses the compliance piece of compliant time and billing, Intapp Time provides a comprehensive, cloud-based solution that helps you optimize timekeeping practices to improve realization rates, reduce leakage, and honor client commitments. Capturing time for both billable and non-billable work, Intapp Time also ensures compliance to billing terms at the point of time entry.

Intapp Billstream completes the billing cycle by generating accurate prebills, accelerating billing cycles, and improving realization rates. Offering a modern, cloud-based automated proforma invoicing solution, Intapp Billstream intelligently addresses gaps in your existing billing software and processes, solving billing challenges throughout the engagement lifecycle to ensure that clients receive the bills they expect.

To learn more about Intapp Billstream, schedule a demo.

Written by:

Shishir Shetty

Vice President, Intapp Billstream

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