How Law Firms can Maintain Proper Bookkeeping
Proper bookkeeping can get lost in the hustle and bustle of a busy law firm. For law firms without a dedicated bookkeeping department of personnel, their accounts and books can be left in a constant state of neglect. Keeping records of an endless stream of numbers is a job few lawyers would want to add to their already full plates.
However, keeping the accounts and books in proper order is crucial to staying on the correct side of the law. It also provides business development leaders a clear assessment of the law firm’s performance to plan out future endeavors. Today, we look at how law firms can ensure proper bookkeeping habits.
Using Time as a Control
One way law firms can maintain their books is having a proper system with strong accounting controls to ensure the validity of their numbers and proper double entry accounting posted. It can be hard for law firms to keep track of their revenue simply due to the nature of their work. Filing charges, appointments and court sessions are standard practices for law firms, and having a wide range of services can complicate bookkeeping.
Strong internal controls will allow you and your client to properly account for costs incurred and revenue generated. One such control is time spent for each client. Time is a constant across all services provided by law firms, and properly maintaining records on time spent on each client will remove any doubt from your bookkeeping. Detailed ledgers of time spent with each client will allow you to accurately calculate your revenue, including revenue yet to be collected from your clients. Appointment books, accounts receivable journals, and time summary reports are common place for law firms doing their own bookkeeping. Naturally, a record of cases-in-progress is necessary to summarise any on-going work.
The second way law firms can ensure proper financial accounting is to constantly reconcile their accounts, instead of leaving it to the year’s end. Every cash movement, whether making or receiving a payment, should be categorised and followed. Your financial accounts demand discipline: constantly updating and following up every payment means you can handle one payment at a time. In contrast, leaving your accounts untouched till the years’ end will result in a huge mess! Matching up a year’s worth of payments and the respective documents will be much more difficult and stressful than simply tracking each payment as it comes.
Seek Expert Assistance
Finally, an obvious and best solution for law firms would be simply to hire accounting firm in Singapore. Many accounting firms provide accounting and bookkeeping services, utilising their expertise to ensure their client’s books and accounts are kept in good order. This may incur additional costs for law firms. Even so, the extra costs can be easily offset. In almost all cases, an attorney’s hourly charges are higher than an accountant’s. Freeing up more resources from bookkeeping within your company and handling more clients will easily overcome the extra costs of hiring accounting services in singapore.