This is because a professional legal bookkeeper and accountant can help you manage your firm’s revenue and ensure your firm’s financial transactions are handled ethically and accurately. 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. Whenever a client pays an invoice, you must allocate the payment to the incurred costs of a matter first.

When it comes to our record-keeping, the handling of our Trust account was and continues to be most important. Now that we work with Lescault and Walderman, they are responsive to our needs. Keeping client funds separate ensures the money isn’t inadvertently used for your business or personal expenses.

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For example, say you deposited a check for $10,000 to the trust account on December 30 but the deposit didn’t clear the bank until January 2. The December 31 bank statement shows a balance that is $10,000 less than your books or the client’s trust ledger due to a timing difference. You would note this in your reconciliation report and ensure your January 31 bank statement includes the deposit.

• Beyond knowing how to assign billable hours and ensuring that invoices are sent and paid on time, take advantage of budgeting and financial analysis services.
• Unsurprisingly, having to deal with a combination of all these factors can eat away at precious time that would better be spent on clients.
• While bookkeeping is more transactional and administrative, accounting is more subjective, giving you insights into your law firm’s financial health based on legal bookkeeping information.
• Boosts Productivity
  Relying on spreadsheets and manual data entry tasks are tedious and prone to human error.
• Only a small mistake or duplicated data entry may result in wasted time, mismatched records, billing complications, and even compliance violations.

We want to help you achieve maximum billing efficiency and increase your overall profitability with the best law firm accounting software. People tend to use the terms bookkeeping and accounting interchangeably, but bookkeeping is actually just the first step in the accounting process. It involves recording and classifying financial transactions, preparing bank reconciliation, and tracking all income and expenses.

Accounting

With client accounts being updated on a real time basis now, our income, therefore, follows a structured flow. This has given the firm’s partners good freedom to take important decisions of expansion and vertical integration. Outsourcing legal accounting services to Cogneesol will wipe out problems with staff turnover, management’s law firm bookkeeping effort, and time used on employing, training & handling employees. With expertise in every accounting software and platform, our team of highly skilled professionals offer fast learning curves and swift implementation of solutions. I helped switch us from Quicken (the PERSONAL accounting software) to QuickBooks Online.

Great legal accounting software should enhance your existing operations with minimal disruption. Beyond that, integrations give your firm more flexibility to make changes or embrace new technologies without having to tear things down and start from scratch. So when evaluating different options, make sure to find a legal accounting provider that supports integration with your existing software. It is imperative that law firms keep their client’s sensitive information secure. While there is a lot of accounting software on the market, not all are equipped to handle the unique security and compliance requirements needed by law firms.