Paul W. Carlson, CPA (00:02):
Hey, this is Paul Carlson, CPA with Law Firm Velocity. We have two or three key tools that we use to drive revenue and profitability for hourly based firms. One of those leading tools is this weekly billable dollar dashboard that we create in Google Sheets, and the office manager then updates and mails out to the entire firm every week.
(00:28):
The idea is to monitor weekly billable dollars, so the value of time entries that go into MyCase every week, and compare those to goals for each timekeeper. And these goals are also tied into firm revenue goals. So if this firm has a monthly revenue goal of $45,000 a month, then hey, we're on track and everything's great. If the firm has a monthly revenue goal of $100,000, the firm needs to have billable time of $25,000 a week, that we're very far behind and there's something seriously wrong and we're not going to make those goals.
(01:14):
So the trick to this is creating a financial statement forecast where we know the revenue goal. Then we come back in and set goals per timekeeper that will allow us to make those monthly financial goals. And then we just need to run this every week.
(01:34):
So the trick is once we have this set up in Google Sheets ... And if you need this for your firm, if you're one of our clients, let us know and we will gladly put this together for you, and then your team can update it. That we need to get these weekly billable dollar values from MyCase so we can update this sheet every week.
(01:55):
To get those values, we go into reports, firm time and expenses. We set our reporting week. I like to look ... As you're getting used to this, let's look at the detailed version first, which we have here. And so what this shows is that Jane Austen had $0 of billable flat fees and $3,440 in billable time for the week. And here we can see the detail behind those time entries. And then I didn't work as much as I should have and I only have $500 a billable time for the week.
(02:36):
So at this point, we can take these numbers and go add them and populate them into that Google Sheet. A couple of cautions with MyCase is if users are entering flat fee rates, the flat fee appears here, and this total billable amount appears here. That this word total, they're just messing with you, that this is hourly only and this is flat fee only. That if you have a mix, you have to add these two values together when you're updating that Google Sheet.
(03:12):
I like to look at this in the detailed view when you have a mix of time entries and flat fees, as the first couple of weeks, you're getting used to this, because it doesn't make sense that you'd have to add these two numbers together. But when you look at it in detailed view, you can see that, oh yeah, we really actually have to manually add those together. If you want the sum review, we can do sum review. And so once you have this process nailed down and you're up to seven timekeepers, this is going to be much quicker for time entry.
(03:47):
Let's go back to the Google Sheet and talk through some nuances. So first, so time goes through three phases. So billable, billed, and collected. I actually need to get a tattoo with these terms. Billable is the value of time entries that go into the system, billed is the amount that we actually bill to clients, and collected is the cash received by the firm. When we're looking at these numbers, these are billable time entries, that there's a lot that happens between a billable time entry and actually getting paid. So just keep in mind that these numbers are typically going to be higher, which is why we have this collection rate reduction within the sheet.
(04:33):
Late time sheets will make these values move. We update these for a couple of firms, and we will typically update the last two weeks every week, because there's always a couple of good time sheets that are missed. And so this number will jump a bit and then we'll add values for the new week.
(04:52):
And then we prefer to use a Saturday to Friday reporting week for this type of work. The idea here is everyone's supposed to have their time in by the end of day Friday, which means we can come in and start populating this sheet on Monday morning. That if the cutoff is Sunday night, it just means people aren't going to enter their time until Tuesday or Wednesday of the week, which makes this report late.
(05:16):
All right, so I guess bigger picture, without this tool, firms will have a low cash month or two and they're surprised because collections have dropped. Well, what's happened is a month or two before that low cash month, billable time entries dropped. So we're trying to short-circuit that two-month delay where suddenly cash is short because time entries declined six to eight weeks ago. With this, we're seeing time entries on a weekly basis, and it's fantastic to watch this as firms mature and learn how to use this, that when they miss these targets, it's immediately a instant management discussion and they jump on it and they correct course.
(06:08):
All right, thanks.
