Bookkeeping for Solo and Small Law Firms

We recommend QuickBooks Plus and Advanced in order to get the most from your legal billing software. Both plans allow you to get a more granular view of your practice and track billable hours by client, case, and employee. Monitor and manage Trust/IOLTA accounts and client trust liabilities to meet strict state bar regulations. Hiring myself as a bookkeeper would be an expensive waste of resources. Would you hire someone who has mediocre recordkeeping skills to manage your books for $300/hour? If that’s your billable rate, then that’s what you’re effectively doing.

Send invoices from the app and get alerts the moment they’re paid. Accept all credit cards and free bank transfers, right in the invoice. Track status, send reminders, and have payments matched to invoices for you.

What are the benefits of effective bookkeeping for a law firm?

Your business’s accounting method will affect cash flow, tax filing, and even how you do your bookkeeping. Manage business revenue in your checking account, and set aside money you’ll need at a later date (for emergencies, to pay taxes, etc.) in a savings account. Even https://goodmenproject.com/business-ethics-2/navigating-law-firm-bookkeeping-exploring-industry-specific-insights/ though interest rates on business accounts are traditionally low, having a cash surplus in a business savings account can improve your likelihood of being approved for a loan. It’s also a good place to store money you’re setting aside for taxes and emergencies.

Why has accounting for law firms traditionally been such a hassle? It involves a ton of inefficient, manual work—involving a lot of spreadsheets, paper invoices, inputting data entry, and struggles with collections. Every law firm has a responsibility to stay compliant with ethics regulations, and your firm is no exception. Ethics rules vary in each jurisdiction, but there are definitely some basics when it comes to accounting for law firms. Bookkeepers record the financial transactions and balance the financial accounts for your firm. Legal bookkeeping takes place before any accounting can occur and is an important administrative task for any law firm.

Invite Your Accountant

One key part of the accounting process is analyzing financial reports that provide you with a better understanding of actual profitability and awareness of cash flow in your business. Committing to accounting for law firms will allow you to be better equipped to identify growth opportunities. You undoubtedly have more pressing matters than organizing your financial statements or A Deep Dive into Law Firm Bookkeeping monitoring your books. When you partner with Lescault & Walderman, enjoy the luxury of accruing more billable hours and scaling your law firm and less time worrying about your financial data. Our law firm accounting services are designed to automate your bookkeeping capabilities, manage your IOLTA accounting, and provide analytical insight to reduce overhead and increase profits.

It’s best to work with a CPA who has experience working with law firms. Ask other attorneys you know or ask your State Bar for referrals. Any CPA should be willing to sit down with you for a free consultation. We strongly recommend that you contact Free Cash Flow (FCF) if you need assistance with Bookkeeping for the law firm. Having worked with law firms for years, FCF has a wealth of experience in this field. Make sure to keep all of your records organized and in one place.