Bookkeeping and CFO Services for Law Firms Home Page

The tax implications of this method also allow your firm to pay tax on income once it’s received and in the bank. Interestingly, tax deductions can ease the burden when used correctly—yet not all lawyers are up-to-date on their tax deductions. Many lawyers go to one law firm bookkeeping or the other extreme—they either claim everything (and possibly more than they’re allowed to), or they’re so afraid to overstep they miss out on tax deductions. Entering numbers manually often leads to mistakes and duplicated data entry in the accounting process.

This is important because it can save time when preparing tax returns or other financial reports. Furthermore, the accountant can offer suggestions on how to improve the bookkeeping system. This can save the firm money in the long run and help to maintain accurate records. Finally, an easy expense reimbursement system can help employees and partners feel more comfortable using company credit cards for business expenses. In addition to thinking about expenses, it’s also important to project future revenue when setting a budget for a law firm.

What is Law Firm Accounting Software?

Growth for accountants and auditors is expected to continue for the next several years. The Bureau of Labor Statistics (BLS) expects 6% job growth in this field from 2021 to 2031. This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein. Check out our helpful guide for deciding when is the right time for your business to invest in hiring a bookkeeper.

Larger companies often have much more complex solutions to integrate with their specific reporting needs. Large accounting solutions include Oracle, NetSuite, or Sage products. A major component of the accounting professional is the “Big Four”. These four largest accounting firms conduct audit, consulting, tax advisory, and other services. These firms, along with many other smaller firms, comprise the public accounting realm that generally advises financial and tax accounting.

Mismanaging trust accounts

(Really!) At best, they have financial information but it’s too late to do anything. Accounting is a world of numbers, and, for law practices, it helps efficiently manage the money flowing in and out of business. You create an asset account called “Advance Client Costs or Client Advanced Costs.”  You use that item or category in the transactions. You do not book this as “professional fees.” You book this to the Advance Client Costs account. Hiring a bookkeeping service is about more than just finding someone who can use a calculator and understand QuickBooks. You want a full-fledged team that has the professional background, training, and experience to really benefit your business.