No, we’re not talking about a warm, fruit-filled pouch of dough. We’re talking about how to increase the dough in your pocket from your practice by increasing your billing turnover rate.
Your billing turnover rate is the length of time, on average, that it takes for a bill to be sent to the client after the work has been done. The figure is determined by dividing your current work in progress (WIP) figure by the average amount you have billed monthly during the preceding 12 months. For example, if a single lawyer averages billing $20,000 per month and has $60,000 worth of unbilled work (WIP) on the books at the end of the year, his billing turnover rate would be 3 months ($60,000 ÷ $20,000 = 3 months).
Some types of work are customarily billed only at the end of the matter, so if you do this type of work it can throw the numbers off. Nevertheless, the lower your billing turnover rate, the more quickly you are getting your bills out and, assuming that you have engaged in appropriate client selection and the bills are paid as sent, the better off you will be financially. Clients can’t pay your bill if you don’t send it, and the sooner they get it, the better the chance that it will be paid promptly.