To put it simply, cash flow is the movement of money into and out of a business. In a legal setting, this could refer to expenses, client payments, and more. Improving your cash flow is an essential step to running a successful business. It helps you maximize your earnings and invest more money into the firm itself. Conversely, poor cash flow management could lead to financial struggles and company closure.
The importance of proper law firm cash flow management has been made only more apparent during the COVID-19 pandemic. Many companies have had to reassess their finances to avoid closure. Furthermore, as the financial impact of the COVID-19 pandemic is likely to be long-lasting (affecting consumer spending habits significantly), all law firms should be on the lookout for ways to improve their cash flow.
With that in mind, here are some simple ways in which you can improve your law firm cash flow.