The Lawyers’ Accountants

Accounting for Legal and Professional Services

We offer monthly accounting for legal and professional services using integrated applications with QuickBooks that involves specific steps tailored to the unique aspects of the industry. Here is a summary of the monthly accounting cycle, highlighting some industry-specific accounting considerations:

Time and Billing Tracking:

Capture and record billable hours and expenses for each client or matter. Utilize integrated time tracking and billing applications that sync with QuickBooks to accurately track time spent on client engagements and generate invoices based on billable hours and expenses.

IOLTA Trust Accounting:

Manage IOLTA trust accounts, which hold funds on behalf of clients for future services or disbursements. We integrate legal practice management applications such as Clio, LeanLaw, and PracticePanther to accurately record and reconcile trust transactions within QuickBooks, ensuring compliance with regulations governing client trust funds.

Expense Allocation:

Allocate shared expenses or overhead costs among clients or matters. Use cost allocation methods to distribute expenses fairly and accurately. Customize expense accounts in QuickBooks to reflect industry-specific expense categories.

Retainer Management:

Track and manage client retainers, which are advance payments for future services. Utilize integrated practice management applications that sync with QuickBooks to record retainer receipts, apply them to invoices, and track retainer balances for each client.

Matter or Project Cost Tracking:

Track costs incurred for specific matters or projects. Assign costs to specific engagements or matters to allow accurate cost tracking within QuickBooks. Utilize integrated practice or project-management applications to track and analyze case or project-related expenses.

Expense Reimbursement:

Process and record employee expense reimbursements accurately. Implement expense reimbursement policies and procedures to ensure compliance with tax regulations and client billing guidelines. Utilize integrated expense management applications or expense tracking features in QuickBooks.

Income and Expense Categorization:

Categorize income and expenses accurately based on the nature of the services provided. Customize income and expense accounts in QuickBooks to reflect industry-specific categories, such as legal fees, consultation fees, court costs, or disbursements.

Cost Recovery:

Track and allocate expenses recoverable from clients, such as court filing fees or expert witness fees. Implement cost recovery processes and integrate cost recovery applications or features with QuickBooks to ensure accurate tracking and invoicing of recoverable expenses.

Retention of Client Funds:

Comply with regulations regarding the retention of unearned fees or IOLTA accounts. Establish processes to identify and record unearned funds accurately within QuickBooks, ensuring compliance with industry-specific rules and regulations.

Financial Reporting:

Generate financial reports specific to the legal and professional services industry, such as profit and loss statements by client, matter, or partner, and aging reports for accounts receivable. Customize reports in QuickBooks to provide insights into profitability, client performance, and financial health.

These are some industry-specific accounting considerations in the monthly accounting cycle for legal and professional services using integrated applications with QuickBooks. By leveraging integrated applications and QuickBooks, businesses in the legal and professional services industry can streamline their accounting processes, accurately track time and expenses, and provide transparent financial reporting to clients and partners. Consulting with accounting professionals experienced in the legal and professional services industry can provide further guidance in addressing industry-specific challenges and optimizing financial management for your business.