How to tell if your Law Firm needs an Accountant
If you find yourself in any of these situations, you need to consider start looking for accounting/bookkeeping help:
Thinking about your accounting stresses you out
You never have a true sense of where you stand financially
You can’t pull a Profit & Loss on demand
You look at the balance of your bank account to make financial decisions
You are doing double-entry for your transactions
You don’t have financial goals and a clear path to get there
Talking to your bookkeeper (if you have one) without getting a clear response on the matter
You have no idea if you are in compliance with your Trust Accounts
Let’s be honest, this list can go on and on.
The main reason Lawyers look for accounting help is because they find themself in a stressful situation when dealing with their own books. They’ve been avoiding it for so long just because this was the only way they knew and at least they have control over it. Or perhaps they were not ready to invest in fixing their books thinking this is going to cost too much. The truth is, having a messy accounting in Law firms can cause you your entire business.
Now let’s break down the true cost of the mess and how it’s negatively impacting your business today.
This is costing you time and money
This is the biggest pain point for many Attorneys. Having to spend so much time on accounting tasks is what frustrates them the most. This is time that you could otherwise be spending working with clients, networking to generate business, or simply relaxing and enjoying life.
It also costs you money. Lawyers need to track and reconcile so many things for each client that it is easy to mess up your books and lose track of your numbers. You might have an A/R issue you don’t know, billable expenses that were never billed, work completed and the money is still in Trust accounts, and so much more.
Your business is suffering and can be at risk
A proper accounting system is the foundation to know your numbers inside and out, and this is key to the success and continued growth for your business. When lacking good accounting systems you miss the ability to see the big picture about your finances. It stops you from knowing if you are financially capable of hiring a new employee or investing in marketing, or even if you have enough cash to cover your expenses during difficult times. Besides, mishandling trust funds is the main reason to not be in compliance with the Bar Associations guidelines and it can cost you your license.
It's time to change this! Get the proper help from an accountant that knows the in and outs of Law firms requirements and get a good system in place for your bookkeeping and your internal processes. Trust me when I say, this will reduce your anxiety, will save you time and money, and it will give you the opportunity to grow and expand.
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