Firm Finances: Bookkeeping, Accounting, and KPIs 2023

bookkeeping for law firm

Law firms use trust accounts to hold client funds and keep them separate from the law firm’s funds. Accounting and bookkeeping happen at different stages while managing your small law firm’s finances. Bookkeeping is the process of tracking law firm bookkeeping the cash coming into and out of your business, and it’s the foundation for proper legal accounting. Typical bookkeeping tasks are (1) recording financial transactions, (2) creating and sending invoices, and (3) running payroll.

  • Once law firms start using our system, our in-house support team is always available to provide training or onboarding or simply answer specific questions about our products and services.
  • Whether you need just a little bit of hand holding or more, we are here to help your law practice!
  • Yes, QuickBooks lets you customize invoices to reflect your practice’s logo, information, and billing rates.
  • Here are some reasons why accounting is key to your firm’s success.
  • Some firms will also intentionally use their IOLTA accounts to hide assets, or will leave funds in their IOLTA even after they’ve been earned, using it as a savings account.
  • Soluno’s cloud platform enables your law firm to work whenever you want, from wherever you are without jeopardizing your crucial data.

Their assistance during a critical time was invaluable, and they have continued to deliver value since day one. Find help articles, video tutorials, and connect with other businesses in our online community. As long as you have an internet connection, you can access QuickBooks anytime, anywhere on your device of choice. Learn more about what billable hours are, how to track them, and what kinds of time you can and can’t charge. Terms, conditions, pricing, features, service and support are subject to change without notice.

What to look for in a legal accountant

Managing your books via accounting software may get you started as a solo attorney. But, if you want to spend your time focused on practicing law rather than deep in the weeds of your firm’s finances, you’ll likely want to consider hiring help. One (or more) of these professionals can greatly assist with your law firm accounting.

Your financial strategy will help you plan, strategize, and shift as you need to, helping you grow a financially healthy law firm. Each month, take some time to reconcile your budget compared to your reality, making changes that benefit your bottom line. As a solo attorney, managing your books via accounting software may get you started.

What to look for in a legal bookkeeper

Over that period, Lohn Caulder has consistently rendered professional accounting services to the highest standard of competence and professionalism. We have no doubt that Gordon and Kelly’s innovative and comprehensive “outside-the-box” thinking and advice to our firm and its partners over the years has been a major reason for our continuing success. LeanLaw is the legal billing software for law firms built on QuickBooks Online that makes running a profitable law firm straightforward and simple for everyone involved. PracticePanther is the leading legal practice management software. Start a free trial today and discover the power of automation at your firm. You’re busy providing legal services and developing business, so that Uber expense to meet a client sometimes falls through the cracks.

bookkeeping for law firm

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). When a business expense gets lost in your personal account and you don’t claim it on your tax return, that’s a tax deduction you’re missing out on. And if your CPA has to spend time separating your personal expenses from your business expenses, you’ll end up paying them more in accounting fees.

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