best bookkeeping pratices for small law firm

Following appropriate financial management practices allows law firms to maintain consistent profits and overall practice success. However, to successfully address these financial-based initiatives, you must understand the various operational components that drive an effective financial strategy. Those who have worked in other types of businesses may be unprepared for the volume of financial activities required by a law firm.

You will also steer clear of the frustration that comes with trying to manage every aspect of your firm’s operations — a choice that can lead you to burnout and potentially even lost revenue. ProLaw is robust practice management, document management and accounting software for law firms. It’s the only legal software platform that includes all three of these main pillars to running a law practice.

Law Firm Accounting: The Main Definitions

When this happens, there could be duplicate transactions in your records, which can create errors in the profit of the business. PCLaw is an all-in-one accounting software for law firm use, suitable for large companies with more advanced needs. Built by LexisNexis, it integrates seamlessly with other LexisNexis products. It comes with a good deal of features to help you manage matters, track time, pay vendors, accept online payments, and manage trust accounts. You can even track time on the go with its mobile timekeeping app, PCLaw Go.

best bookkeeping pratices for small law firm

Bringing in an expert will help you with accounting tasks, accounting processes, business decisions, bookkeeping tasks, and more. Do not be afraid to bring in an expert to allow you to focus on things you are better at, like solutions for your clients’ legal problems. If you are still inputting numbers manually, you are probably finding that it is leading to mistakes or duplicated data entry. These mistakes waste time, create mismatched records, create billing complications, and potentially compliance violations. Using a 3-way reconciliation is a great way to check and verify your financial data periodically. Every business gets busy, and it is easy to get distracted by the work you are doing for your clients.

QuickBooks for Lawyers

Most practicing attorney’s record these advanced costs into the system in a similar fashion to other accounts receivables. Regardless of whether bills are based on a specific retainer, annual retainer, contingent fee or referral fee, your fee is based on time spent law firm bookkeeping on your clients’ projects. That is the reason why attorneys usually maintain detailed records to track the time spent on cases. Clear financial data reporting and analysis provides confidence in operational decision, management, transparency, and partner trust.