Best Legal Bookkeeping Softwares for 2024: The Ultimate Guide for Law Firms

Law companies use this information to determine whether they need to hire lawyers, update software, or expand their target audience. Assessing the effectiveness of such actions is impossible without financial records. It’s easy to record all deposits to bank accounts as income, but deposits made to IOLTA accounts aren’t income for your law firm—they belong to your client. If you’re trying to handle bookkeeping on your own in addition to putting in all those billable hours, it’s easy to overlook workflow steps or make mistakes. Within each of those categories, you may have dozens of general ledger accounts. For example, you might have an operating account, lawyers trust accounts, accounts receivables, and fixed assets within the assets category.

• Remember earlier when we discussed setting up a Chart of Accounts in Chapter 1?
• Remote CFOs handle financial due diligence, review feasibility and risks, structure deals, and ensure smooth post-merger integration during M&A activities.
• Tell us your practice areas, fee structures (hourly, fixed, contingency), trust accounts, and staff.
• It also helps you stay compliant with professional conduct rules that hold attorneys personally responsible for client funds and accurate financial reporting.
• This includes managing operating accounts, handling client trust funds, tracking expenses, and ensuring all billing and reporting practices adhere to legal and ethical standards.
• They also compare multiple periods to learn about performance patterns and see how financial decisions affect liquidity.
• Juris comes in two packages, Juris Core (it’s more entry-level product) and Juris Suite, it’s more comprehensive edition.

Tax Preparation

Every business is different, and the “right bank” for you will depend on the nature of your practice and the way you prefer to get your banking done. If you’re serious about growing your business, you need to team up with a Certified Public Accountant (CPA) early on. Many small firms find that outsourcing law firm bookkeeping their bookkeeping functions is a great first step in delegating work off the owner’s plate. With all the options available, we know it’s difficult to choose which software is the best choice for your firm. After all, you have to sift through the options alone, convince your partners to agree, and pray that it works as it should.

Trust accounting

This cost-effective solution relies on digital communication and document sharing, potentially streamlining your operations. Failing to meet tax obligations can result in penalties and interest charges. Regularly reconcile bank statements with your internal records to identify discrepancies and prevent errors from snowballing. Allocating expenses between different clients and matters can be complex, especially with multiple attorneys or clients involved.

The Main Benefits of Professional Bookkeeping for Law Firms

Tell us your practice areas, fee structures (hourly, fixed, contingency), trust accounts, and staff. We pair you with a specialized accounting + operations team trained in legal workflows, and compliance. At OBG Outsourcing Private Limited, we specialize in bookkeeping and accounting for small law firms, ensuring every aspect of your practice is compliant and audit-ready.

• The development of these skills is integrated with the use of technology.
• You will learn auditing, financial recording, taxes, payroll, financial planning, and other essential accounting principles while preparing for the CPA or other licensing exams.
• But they do not provide the “rest of accounting” and instead integrate with applications like QuickBooks to complete the picture.
• By leveraging their expertise, firms can stay compliant, improve cash flow, and reduce the risk of costly financial mistakes.
• It helps you track trust and operating accounts, automate reconciliation, manage expenses, and generate financial reports—all within the same system you use to manage your cases.
• Create recurring invoices and customize templates to represent your brand consistently.

You can research this on your state government’s website, and consult with your CPA. Ask a CPA to help you determine which accounting method is best for your business, and stick with it. Once you’ve chosen a bank to work with, you’ll want to open a business checking account, a savings account, and an IOLTA (Interest on Lawyers Trust Account). First, let’s review typical accounting and bookkeeping functions that need to happen regularly so you can make sure you’ve got these covered.

Then, you’re ready to evaluate the top accounting platforms for law firms. Choose wisely—and don’t be afraid to test demos or request consultations. The future of your law firm’s financial health depends on the tools you adopt today. When you take funds out of your business for personal use, it can either be classified as a capital withdrawal or as a payment for salary.

Interest earned on IOLTA accounts is sent directly to local Bar Associations to support charitable legal services. Plans start at $6.30 for the Lite plan, which allows users to send invoices to five clients, track expenses and other basic accounting work. More robust features are available in higher-tier plans, starting at $11.40 per month for the Plus plan. Unlike general accounting software, Clio Accounting is built with legal professionals in mind.