Law Firm Accounting and Bookkeeping: Tips and Best Practices JurisPage Legal Marketing

FreshBooks provides the accounting support you need and takes care of the data entry and migration from QuickBooks Online, Word, or any other accounting systems or bookkeeping software. Accept all credit cards and free bank transfers, right in the invoice. Track status, send reminders, and have payments matched to invoices for you. Anna DiBella has held senior leadership roles at aggressively growing law firms in the Vancouver area, helping them to envision long-term goals, and implementing processes to achieve them. Lawyers use the term “partner” more liberally than accountants. Some firms promote lawyers to a partner title without making them a part owner in the business.

This means that attorneys have to take extra care when selecting a merchant processor for their business. Setting up and recording the chart of accounts for law firms isn’t just suggestions, they are requirements. An accountant who specializes in accounting for law firms is beneficial. law firm bookkeeping Your best bet is likely to hire both a legal bookkeeper and a legal accountant. The chart of accounts for law firms should include the IOLTA or trust account, as well as a trust liability account (to offset and show that the funds in the IOLTA account are not the law firm’s).

FINANCIAL SOLUTIONS THAT GROW YOUR FIRM

It’s recommended to find a merchant processor that works mainly with law firms to avoid breaking certain trust accounting rules. Regardless of the size of your law firm — even if you’re a solopreneur — it’s important to know accounting and bookkeeping basics. By learning the fundamentals of accounting, you can make sure your firm is compliant with ethics rules while finding ways to optimize your cash flow. Regardless of the size of your law firm, it’s essential to understand the best practices of accounting and bookkeeping to ensure that your business is on the right track.

• And you can’t do that if you’re not gathering and sorting it on a regular basis.
• Get in touch today to get started on building a financial strategy that helps you take your firm to the next level.
• 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.
• Your business operates as its own entity with its own credit rating.
• Double-entry bookkeeping or double-bookkeeping accounting is a method that keeps track of where your money comes from and where it’s going.
• Supporting Strategies can evaluate your day-to-day operations and suggest improvements that have the potential to transform the financial management of your law firm.
• At its core, you must always know who’s entitled to the funds in your trust account and give it to that person.

And you can’t do that if you’re not gathering and sorting it on a regular basis. IOLTA accounts are designed to keep client funds separate from your typical business or operating account—where you are allowed to accrue interest. Without proper attorney bookkeeping, it’s impossible to track what money is coming (and leaving your firm). This can cause serious issues and stunt your firm’s growth (more on that later).

How to hire the right legal accountant and bookkeeper

Our core purpose is to enable collaboration between quality member firms to win, retain and serve clients with pan-national, international, and multinational needs. We create a community for firms to collaborate on maximising opportunities and address the challenges they face in a constantly changing professional services environment. 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. You can also schedule invoices to be generated and emailed at certain dates or intervals. Emailed invoices have a Pay Now button so that clients can pay online with cards or bank transfers.

• You’ll be able to visualize what you’re spending money on and what’s bringing in revenue, so you can pinpoint what’s working and what isn’t.
• Whenever you manually enter data into the books, you leave room for errors like a duplicated entry or a wrong number.
• Keeping your firm professional in all matters goes a long way toward attracting new clients and high-quality employees.
• Most lawyers do so with the help of law firm accounting software.

QuickBooks is the ideal software for lawyers to spend less time on busywork, and more on real work. If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee. Biglaw Investor is helping thousands of lawyers manage and eliminate student loans and make great investment decisions.

Open a checking, savings, and IOLTA account

At Lawyerist, we firmly believe in the benefits of automation for accounting and bookkeeping. That’s why we’ve taken it upon ourselves to review a wide range of tools for you, so you don’t have to. You’ll find more at our Accounting, Billing & Finance review portal.

This way, you can focus on working with the kinds of clients that bring in the most money. At its core, you must always know who’s entitled to the funds in your trust account and give it to that person. Accounting is a world of numbers, and, for law practices, it helps efficiently manage the money flowing in and out of business. Before meeting with a bank representative, call ahead and ask what paperwork you need to bring to your initial appointment.

For over 15 years, Supporting Strategies’ locally owned and operated offices have served thousands of companies. Working with us eliminates the need to hire a controller, an HR administrator or an accounts payable manager. We can fill all those functions, giving your firm one comprehensive, cost-effective, long-term solution for your back-office needs. As a result, you and your team can focus on what you do best.