Expert Bookkeeping Services for Law Firms – Streamline Your Finances

After you’ve established a strategy and budget, the day-to-day management work begins. It’s not a yearly ritual that you only complete during tax season to review your finances. To determine the state of your company’s finances, you must constantly monitor your numbers.

We’ll start off this chapter by discussing how to select accounting software. The people who should be on your financial team will then be discussed. We can deal with what to monitor and when once those things are in place. And finally, we’ll discuss some typical financial errors and how to avoid them.

Accounting is mind-numbingly tedious work. However, there are many tools at your disposal that can aid in getting you going. You cannot simply keep all your financial records for a year in an Excel spreadsheet. When used for that much data, it is cumbersome and deficient in features that you could use to enhance your reporting.

Finance, accounting, and billing must be done effectively for law firms to be successful, but these essential tasks necessitate a lot of labour-intensive, systematized workflow. With the growth of your law firm, you will probably find it difficult to handle the routine accounting on your own. Fortunately, there is a much better option than hiring an internal bookkeeper or perhaps a law office accounting specialist.

The successful lawyers around the world and their exclusive law firms are satisfied by the accounting, tax preparation, and business needs of our services’ law office accountants. We have a great deal of experience working with law firms and different types of attorneys to provide a wide range of accounting services.

Make sure a tool or piece of software will serve your needs before investing in it. It has been established through years of trial and error that a good accounting program for law firms needs to have features like:

1. Billing and invoicing
2. Bookkeeping
3. analytics and reporting
4. Tracking your expenses
5. Payroll
6. Tax prep

A mileage tracker, the capacity to accept payments online from your customers, timekeeping tools for keeping track of your time, bill payment, and the capacity for multiple users to access the tools may also be included in the software you choose.

Our Services for Law Firms includes

• When processes could be enhanced to lower risk or cost, we will do so. To assist you in solving any issues we uncover, we also bring creativity and resources.
• Technology stack that has been carefully chosen for your company’s size and type. We make sure you get the right solutions for efficiency and automation, whether we’re enhancing your current technology solution or building it from the ground up.
• Reporting Based on Your Unique Business provides you with the appropriate lens to evaluate your business so you can take more informed decisions that advance your enterprise. We record the necessary transactions to ensure that your accrual-based financials accurately depict the state of your company.

We will take care of your legal accounting and bookkeeping needs, manage your cash flow, prepare taxes, process payroll, and provide structured financial records regardless of whether your area of practice is in litigation, business, divorce, personal injury, or criminal law. To perform legal accounting tasks that are typically too expensive to hire staff for, you can access our talented experts who have years of experience in the field. You can improve your organization’s internal system and increase transparency by outsourcing law firm accounting to us.

How do accounting and bookkeeping differ from one another?

Managing the finances of your small law firm involves various stages of accounting and bookkeeping. The process of keeping track of the money that enters and leaves your business is known as bookkeeping, and it forms the basis for proper legal accounting. Recording financial transactions, creating and sending invoices, and processing payroll are all typical bookkeeping tasks. It all starts with bookkeeping.

Accounting is the process you use to prepare financial statements, complete tax returns, identify financial trends, and make forecasts using the financial data from your bookkeeping after you’ve established good bookkeeping practices. A typical accounting task would be to create monthly income and balance sheet statements, complete tax returns, and forecast future cash flow.

Now that you are aware that bookkeeping takes place before legal accounting, we advise you to consider how to handle bookkeeping before continuing with legal accounting.

Choosing between the cash and accrual accounting methods:

There are two methods of bookkeeping available to law firms: accrual accounting or cash accounting. Before you set up your bookkeeping, you must select an accounting method. Due to its simplicity, cash basis accounting is preferred by most law firms.

Cash accounting:

Your personal finances are managed through cash accounting. When cash is received, you record revenue, and when it is paid out, you record expenses. Because you only count the cash as it enters and exits your financial accounts, this method does not use more complex ideas like accounts receivable or accounts payable.

Another advantage of cash accounting is that you can always check your bank balance to determine how much money is available. Income taxes are not due until the money is in your bank account because revenue is not recognized until the cash is paid.

Accrual accounting:

A more sophisticated method called accrual accounting records income and expenses at the time they are earned or incurred, regardless of when you receive the money. This method has the advantage of giving you a more accurate understanding of the revenue and expenses of your law firm.

You’ll need to be careful about managing actual cash flow because the drawback of this strategy is that your company may appear to have more cash in its bank account than it does.

Which technique is best for you?

Most law firms ought to begin by using the cash basis of accounting. Once your annual income reaches $10 million, the IRS will require you to use the specific rules needed to implement the accrual method. Since using the cash basis of accounting is simpler and easier, you’ll have more time to focus on expanding your practice.

Conclusion:

To create finance and accounting solutions that will equip your business for scale and emerging technologies, we draw on our extensive industry experience and knowledge. Do you have specific inquiries, or would you like a tour of our services? Contact us today!