Lawyers are not accountants. Lawyers need accountants to manage their books, accounts and payments carefully. Lawyers do not have the time and experience to manage all of the accounting tasks. They are so busy in their hectic routine that they can not spend hours maintaining their daily cash flows and preparing financial reports. In case they need a loan from a bank, they need to consult a professional accountant, needs projected financial statements and projected Cashflow statement. it is better to hire an accounting firm to manage all of this.
Law firms and lawyers require professional accounting expertise. But they are also looking for ways to cut their costs. Hiring law firm accounting services from a well-known accounting firm will help in saving money. It will provide professional accounting services at an affordable rate.
Moreover, other than reducing expenses, there are some other practical reasons also to hire an accounting firm.
- Expense Tracking
- Legal Specifics
- Trust bank Accounting
- Expert Accounting
Lawyers incur multiple costs while working on a case. Similarly, law firms can not keep track of each penny spent on solving a client’s problem. They need to track their expenses properly. Tracking expenses is not an easy task. It requires a daily recording of transactions. Most importantly, business transactions should be recorded separately from personal ones. This is time taking and exhausting job to do daily. Thus, hiring an accountant to record each transaction will save you from this mess.
If your law firm is interested in hiring a part-time controller or a full-time bookkeeper, it will cost you more. It will also require accounting knowledge and training to operate it yourself. Thus, the most ideal solution is to hire an accounting firm.
Some lawyers tend to record each transaction on a piece of paper or ledger books or on an excel sheet. It is not a safe option to record transactions or keep receipts in a book form. As it can be easily destroyed or burnt. Therefore, it is important to record each transaction in an accounting program, specifically PC Law, Clio etc; These programs are specifically designed for Law firms.
Most businesses buy and use accounting software themselves. But some can not afford to buy it or manage it regularly. Law firm’s accounting software is different from the basic ones. Some accounting options are not available in other accounting programs like QuickBooks. This means that law firms have different accounting needs and they require a separate accounting program.
Professional accounting firms use PCLaw or other legal accounting software to provide professional accounting services for lawyers. This allows the law firm to record multiple transactions in a month according to the requirement of the Law Society of Ontario. It also produces the reports required by the Law Society of Ontario for spot audits. Thus, hiring a professional accounting service provider is quite useful for lawyers.
Trust Bank Accounting and Reconciliation:
The major responsibility of an attorney is to manage trust bank accounts. Trust bank accounts are very crucial to manage. It comes along with a set of responsibilities and Law society guidelines. Thus, it very important for attorneys to use professional accounting software to manage the client’s trust bank accounts.
Using an appropriate legal accounting program to record, manage, collect and reconcile all money is dependent on the firm’s accountant. Thus, lawyers need to be sure of their accountants are experts and must hire an accredited accounting firm.
Lawyers and law firms require professional accounting services not only to manage their client’s data but also to run the firm’s operations smoothly. Law firms need professional accountants to manage their company accounts, employee payrolls, prepare financial reports, bank reconciliations and future growth plans.
Professional accounting firms are not only experts in providing bookkeeping, accounting and financial reporting, but they also provide tax services. Lawyers and law firms need to file their taxes on time. They require expert tax services to prepare and file taxes on time. Thus, hiring an accounting firm that also provides tax services will assist them a lot.
So, it is immensely important for lawyers to consult the right accounting firm that is capable of providing all these expert services.