Law firm accounting: The steps to a successful law firm

by Joseph Marie General You may encounter some difficulties as a lawyer. That is why you will need help with your law firm accounting to keep things running smoothly. With a law firm services company, there are a team of experts who will be able to help you with consulting, tax, and accounting services for anyone who works in the legal field. You will benefit from the assistance of an accountant who has the knowledge, experience and intelligence to help your firm succeed.

Why Would You Need Help With Accounting?

You will get help with:

•    Partner compensation systems

•    Profitability improvement studies

•    Mergers and acquisitions analysis

•    Firm restructuring and dissolution Analysis

•    Partner withdrawal and retirement issues

•    Firm-wide strategic planning

•    Forecasts and budgets

•    Internal control reviews

•    Capitalization structure and financing analysis

•    Tax planning

•    Review and compilation of financial statements, and

•    Operational reviews

There are tax accountants who work with many law firms, such as two-partner emerging practices, to regional firms that have hundreds of partners. They have the ability to pinpoint any red flags you should watch out for, and issues that can negatively impact your law firm. Moreover, it is a holistic approach when designing your accounting firm. Law firm accounting services will even do a monthly check up to see how the system is being implemented. They will be able to provide:

•    Financial statements that satisfy industry-specific standards

•    Accurate billings and accounts receivable aging that will enhance cash collection management

•    Accounts payable bills that are approved at certain times

•    Cash flow analysis and management

•    Payroll and related tax filing, and

•    Account reconciliations and general ledger maintenance

Business tax accountants serve customers in many niches including law firm accounting, and they are knowledgeable in emerging tax issues. They will work diligently to develop solutions in order to maintain your business or financial goals.  This is done by minimizing your tax liabilities, in order to sustain your profits.

How can you make your accounting more efficient?

According to LawBiz, there are two ways you can monitor your law firm accounting, which are accrual and cash accounting.  In accrual accounting, you will be able to keep track of billings, work in progress (work that is completed, and not billed) and accounts receivable (work that is billed, but it has not been collected). Additionally, cash accounting (as the name suggests) includes collections only, and does not include billings or work in progress.  The website also explains that you will normally have to look after cash and accrual records, and how income statements are a reflection of how your firm is doing.  Furthermore, if you practice in a small firm, cash flow is integral to the efficiency of your accounting. It involves financial analysis, and expenses such as:

•    Staff, including their salaries and taxes

•    Occupancy such as rent, taxes, and utilities

•    Equipment (including depreciation)

•    Malpractice insurance, and

•    Professional services outside of your law firm

You will need a tax professional who will have the skills to help you achieve law firm accounting solutions to issues that you might face in your law firm. That is why a law firm services group is trained to satisfy these needs.

RBZ, LLP is an accounting firm that does law firm accounting for many law professionals.  To know about the responsibilities of a law accounting firm, you may also visit jeff231.wordpress.com.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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