Legal accounting can be a major waste of time for lawyers, especially in small law firms and solos. This may seem like a rash statement, but it rings true for the majority of firms due to their current accounting infrastructures.
Solos tend to be just that. Solo. Many small law or resource-limited firms often rely on a spouse or themselves to take care of their books, trust accounts, and day-to-day expenses. This can often be a waste of time and lead to errors.
On top of that, accounting, for the average Joe, is a source of anxiety. For lawyers, the added onus of trust accounts, an arduous tax season, due diligence, and actual business viability can take away from the qualitative practice of law.
This is definitely not ideal. Optimizing time by the minute is key for lawyers. Billable time should not be spent chasing receipts, sitting in confusion, or worrying about misunderstood accounts.
The best way to solve the confusion surrounding your accounting woes is to address the issues and swiftly identify a strategy that suits you.
How to Simplify Your Legal Accounting
Legal accounting tasks should be organized and delegated so that they do not impact the day-to-day running of your firm. What is the best way to achieve this? According to Mickey Deming of Kahuna Accounting, there are three key ways to fix the flawed infrastructure of small firm accounting and integrate a seamless system in its place.
1. Identify the necessary tasks, prioritize them, and integrate them into your practice.
Organization, integrated workflows, and consistent task management eliminate all anxiety related to firm accounting and ensure your time is structured and optimized. The “perfect” accounting system should include year-round expense reporting, accurate trust accounting capabilities, and automated data entry.
2. Build a strong accounting infrastructure by utilizing the right technology.
Changing your perspective regarding the cumbersome elements of accounting can be done simply by integrating the right tools into your practice. Legal-specific accounting tools such as Xero are easy to use, mobile, and can easily be integrated into your legal practice management software to track client payments and invoices.
3. Get professional help
Many lawyers rely on additional assistance from a spouse or partner to manage their bookkeeping and accounting needs. Though helpful, they may not be fully qualified and able to provide you with the right business insight and overall strategy a professional can. Address your needs and bring in a professional, preferably those who understand accounting in a legal context can eliminate the majority of anxiety linked to this issue.
Simplified legal accounting will provide you with peace of mind, a seamless tax season, greater business insight and strategy, and allow you to focus on maximizing your time and practicing law.