Firm Finances: Bookkeeping, Accounting, and KPIs 2023

When it comes to accounting for law firms, there’s no one “right” method (though you may be required to take on the accrual method). Some software platforms allow you to use accrual-based books for monthly management of the firm while also creating cash-basis statements for preparing tax returns. Look into the pros and cons of both methods for your firm, then be consistent going forward to ensure your records are accurate and easy to track.

SLC Bookkeeping’s team brings deep experience in legal accounting to your practice. Set up your brand new law office accounting system with our guidance and learn why QuickBooks for law firms may benefit your practice. Our bookkeeping team for law firms gives you the expertise of a CFO but at a fraction of the cost of a full-time employee. Spend less time on your books and more time with your clients when you partner with SLC Bookkeeping. Bookkeeping might seem tough for those new to law firms, but it’s vital for success.

Final thoughts on accounting and bookkeeping best practices

The reliability of online bookkeeping services is further underscored by its automated backup features. Ensuring no data loss, these platforms routinely save and backup financial records to secure cloud storage. Even in events like system crashes or unexpected disruptions, the financial integrity of a law firm remains intact, allowing seamless recovery and continued operations. Whether you run a solo practice or have several employees, balancing your legal work with your other responsibilities can be time-consuming.

• It can be checked with accounting software or checked manually.
• Choosing the right one is like hiring for manager-level positions within a company—employees will be working with the technology on an everyday basis for just about every task.
• If you own a small law firm, you need to understand the basics of accounting for law firms, why bookkeeping and accounting for law firms are so essential, and the best practices for law firm accounting.
• This is a list of all your firm’s financial accounts, giving you a framework for where to record every transaction.
• This can cause serious issues and stunt your firm’s growth (more on that later).
• If for any reason you make a mistake (such as depositing a personal check in your business account), make sure to track it in your books.
• Something critical to every law firm’s success is practical legal accounting.

This connection means it can integrate with the company’s other products, offering scalability as your business grows. Wave Accounting emerges as a top choice thanks to its comprehensive yet user-friendly approach. Despite its zero-dollar price tag, it stands out for offering a full suite of accounting features. Our tax center can give you a hand with calculators and refund tracking tools. We provide our clients with the highest quality of service, confidentiality, and attentiveness to our clients’ needs. You should hold on to these supporting documents for the specified time required by the IRS.

Accurate Tracking

Law firms can access their financial data from anywhere, collaborate with remote teams, and integrate with other digital tools seamlessly. Moreover, software like QuickBooks and Xero often come with enhanced security features, ensuring that sensitive financial data remains protected. Once you grasp these basic methods, we recommend bringing in an expert bookkeeper to help you keep the most accurate books. Hire a tax professional like a CPA to help you with your business taxes. Bring in a legal accountant to help you strategize how to help run your business through financial reports. Although you may be just getting started in legal accounting, it does not have to be a foreign language.

It also paved the way for Dawgen Global to expand into information technology audit, international taxation, risk advisory, and legal services. We offer an accounting newsletter with timely tips for growing your business. We have the experience, the expertise and the resources to prepare your income tax return accurately with a solid financial record support. Tax return preparation requires a solid understanding of the uniqueness of the legal industry and skills to cut through the complexity of the bookkeeping records.

Monthly financial statements

It involves a ton of inefficient, manual work—involving a lot of spreadsheets, paper invoices, inputting data entry, and struggles with collections. As businesses grow, the ability to integrate accounting software with other systems, such as payroll, banking or CRM software, becomes increasingly important. Integration capabilities ensure seamless data flow between different business functions, enhancing bookkeeping services for law firms overall efficiency and accuracy. ZipBooks is tailored specifically for contractors and small service-based businesses. It distinguishes itself with project costing and time tracking features, which are essential for contractors managing multiple projects. Plus, the software’s simplicity in design and focus on essential functionalities make it an excellent choice for those in the service sector.

It involves recording and classifying financial transactions, preparing bank reconciliation, and tracking all income and expenses. If you’re looking to move outside of the Quickbooks universe, Xero is a fast-growing and popular online software option. Xero is substantially cheaper than Quickbooks, so it might make sense if you’re just getting started. While it’s essential to understand the fundamentals of accounting for law firms, you still aren’t an accountant or bookkeeper. Hiring professionals is common for law firms, and it’s an easy route to peace of mind.