Firm Finances: Bookkeeping, Accounting, and KPIs 2023

For example, in order to ensure that client funds are not comingled with operating funds, attorneys must maintain a separate bank account for these funds. This is just one of the many compliance regulations that law firms must adhere to. The benefits of bookkeeping for a law firm include having accurate financial data, staying compliant with regulations, and being able to track finances. An accountant or bookkeeper can help a law firm by providing experience with the WSBA and getting their bookkeeping in order. Double-entry bookkeeping or double-bookkeeping accounting is a method that keeps track of where your money comes from and where it’s going. Every financial transaction involves at least two accounts, including debit and credit.

Not only can you ensure a seamless installation process by hiring us, but we’ll set it up to serve your business optimally and ensure you have a good understanding of how it works. To ensure you can use QuickBooks to its fullest potential, we’ll also train you on the intricacies of the software. Grow Law Firm is a professional law firm digital marketing agency with the sole mission of helping law firms take their operations to the next level. Call today for a free consultation and learn what Grow Law Firm can do for you. Sage Accounting is most suitable for smaller law firms and sole proprietors.

QuickBooks Online: Cloud Accounting

As a business owner, you’re required to keep your law firm compliant. You must follow the ethics regulations governing law firms in your area. Every lawyer that manages trust accounts should know what three-way reconciliation means. Even if you master the basic principles of legal accounting, you’re still not an law firm bookkeeping accountant or bookkeeper at the end of the day. To do this, legal accountants capture expenses, provide financial forecasting, and prepare financial statements. Legal accountants look at the bigger picture, using the data your bookkeeper provides to determine how your firm can improve its financial health.

It’s important to remember that a standard payment processor will keep a certain percentage of each transaction as a fee. Because of this, you run the risk of breaking certain trust accounting laws (those transaction fees need to be immediately paid back into the trust account). For a CPA to work effectively, they will need you to provide accurate, up-to-date financial statements. Whether you’re good with numbers and spreadsheets or not, every lawyer needs to understand the basic role that bookkeeping plays in their business. Accrual accounting records revenues and expenses when they are earned and incurred, regardless of when the money is actually received or paid.

Open a checking, savings, and IOLTA account

And an accountant who specializes in tax planning and compliance can ensure that the firm is compliant with all applicable laws and regulations. When choosing an accountant for a law firm, it is important to look for someone with experience working with law firms, good references, and familiarity with the firm’s accounting software. It is also beneficial to ask around and check references to ensure the accountant has expertise in this field. Additionally, it is prudent to select someone who has decision-making skills that are tailored to legal bookkeeping.