Law Firm Cash Flow Template

Getting started takes about 15 minutes. Download the .xlsx file and open it in Excel or Google Sheets. Begin with the Accounts Receivable Aging sheet — enter your current outstanding invoices with client name, invoice date, and amount. The sheet will automatically sort them into aging buckets. Then move to the Monthly Cash Flow sheet and enter last month's actual collections and expenses as your baseline. This gives you a real starting point rather than projections built on guesswork.

Once baseline data is in, open the WIP & Billing Pipeline sheet and log your current unbilled time by timekeeper and matter. This is the step most firms skip — and why they're caught off guard by cash crunches. The sheet converts your WIP to a projected billing schedule based on your typical billing cycle. From there, use the 12-Month Projection sheet to set assumptions for the months ahead: expected new billings, your average collection lag (usually 45–75 days for well-run firms), and any planned changes to headcount or overhead.

Review the Dashboard weekly and the full template monthly. The aging report is worth checking every week — a client moving from the 30-day column to the 60-day column is a collections call waiting to happen. At month end, enter actuals into the Monthly Cash Flow sheet and update your WIP balance. The projection will repopulate automatically. Partners who stick with this process say the biggest benefit isn't the spreadsheet itself — it's the discipline of knowing exactly where every dollar is in the billing-to-collection cycle.

Law firm cash flow is fundamentally different from most businesses because of the lag between work performed and cash received. An attorney bills 100 hours in January, sends the invoice in February, and collects in March or April — sometimes later. During that window, payroll runs every two weeks, rent is due on the first, and malpractice insurance doesn't care about your receivables balance. This timing gap is the single biggest source of financial stress for small and mid-size firms, and it's almost entirely invisible without a structured cash flow process.

The metrics that matter most in legal cash flow are the ones most firms track least consistently. Collection rate — the percentage of billed fees you actually collect — should ideally land between 90–95% for healthy firms. Anything below 85% signals a problem with billing practices, client selection, or collections follow-up. Realization rate — the percentage of worked hours that actually get billed — is the upstream indicator: if attorneys are writing off 20–30% of their time before the invoice even goes out, no collection process can fix the underlying revenue leak. This template tracks both automatically, so you can see where in the pipeline cash is being lost.

The practical workflow is billing-first, cash-second. Your WIP balance tells you what cash is coming; your receivables aging tells you when. Model your forward cash position using both, and you'll never be surprised by a slow month again. Firms that run this process monthly can make partner draw decisions, hiring decisions, and credit line decisions with confidence instead of gut feel. The template is structured to support exactly this cycle: log hours, bill promptly, track aging, collect systematically, and forecast what the next 90 days look like before they arrive.