It’s easy to make data entry mistakes that can result in time wasted, mismatched records and compliance issues. Accounting software for law firms makes it easier to prevent these errors by keeping costs and revenue matched up properly.
Legal accounting software includes tools for creating recurring invoices, tracking expenses, online payments and more. Plus, many of these programs feature IOLTA accounting that meets regulatory compliance regulations.
Automated Invoicing
As the largest accounting software provider for law firms, LexisNexis offers a wide range of legal billing tools. Their cloud-based software helps attorneys and staff record time entries, generate invoices, and collect payments, streamlining the entire billing process to minimize errors and improve efficiency. With a mobile version that allows users to work on the go, legal staff can easily create, review, and edit pre-bills while onsite or in the field. This allows them to send electronic bills to clients more quickly, which increases the likelihood of getting paid on time.
Aside from speed, other features that make legal e-billing software a better option for law firms include automated reminders and a simplified reconciliation of client payments. The latter is particularly important as unpaid invoices can wreak havoc on firm finances. It takes time to identify which invoices have gone unpaid, and even more time to follow up on them. Aside from being a hassle, outstanding bills can also reduce the firm’s cash flow and potentially damage their reputation.
Legal e-billing solutions like Clio Manage allow attorneys to track and report time, expenses, and costs on cases. This data is then automatically used to create and share professional invoices for each matter. These are typically customized to reflect the firm’s brand and include specific billing information. Attorneys can then review and approve these invoices before sending them to clients, ensuring accuracy and compliance with the firm’s billing policies.
In addition to streamlined invoicing, many legal e-billing platforms offer integrated credit card payment processing. This eliminates the need for a separate credit card processor and allows lawyers and staff to get paid even faster. This is a big deal in the legal industry where late payments and bad debts can ruin a practice’s reputation.
While there are a number of options for legal e-billing and accounting software, the best solution for your firm will depend on your unique needs and budget. Thorough research will help you determine the software that’s right for your practice. To ensure a smooth, seamless transition, consider opting for a phased rollout. This will enable your team to learn and adjust at a pace that works for them.
Time Tracking
Time tracking is one of the most important aspects of law firm accounting. It influences a variety of processes, including invoicing, expense reporting, determining rates, and more. Inaccurate time tracking can result in billing disputes, strained client relationships, and additional administrative work spent resolving discrepancies. It can also lead to underbilling or overbilling, resulting in lost revenue and reduced profitability for your practice.
To avoid these issues, you need to be sure your attorneys and paralegals are accurately recording the time they spend on each case. However, this can be difficult when your team members are working on multiple cases at once, switching between projects frequently, and working from locations outside the office. This is where lawyer time tracking software comes in. It helps you to streamline your workflows, boost productivity, and ensure that no billable minute goes unaccounted for.
When choosing a legal time-tracking tool, look for one with an easy-to-use interface that’s designed to be compatible with the devices your team uses the most. This includes computers, tablets, and smartphones. It should also allow your team to collaborate on projects and share reports in real-time, so everyone is on the same page when it comes to capturing billable hours. You should also make sure the system you choose is compatible with your existing chart of accounts, which is a list of the account categories used in your accounting system. This way, your bookkeeper can instantly import data into your accounting software and begin processing bills and invoices more quickly.
Lastly, look for an option that provides reports on the performance of your attorneys and their ability to meet deadlines and other requirements. These features can help you set goals for the performance of your team, both personally and professionally. This can include things like limiting vacation days, establishing IOLTA compliance, and increasing revenues for your firm.
Using a law firm accounting software to track billable hours can help you reduce your bookkeeping workload, increase accuracy in your billing process, and improve client satisfaction. It can also give you peace of mind that your firm is in compliance with ethical and legal standards, such as LEDES and trust accounting.
Reporting
Law firms need accurate data to make informed decisions, boost efficiency, deliver better client experiences, and reach optimal profitability. Using a legal bookkeeping software solution, such as the intuitive accounting software for lawyers at TimeSolv or Less Accounting, or even employing the services of thebottom-line.com, make this possible. The software automates processes, reducing manual effort and the potential for errors. It also provides valuable law firm reporting, including client payment data, matter profitability reports, and KPI dashboards.
Whether you use alternative fee arrangements or traditional pricing structures, law firm bookkeeping software can help improve cash flow. Automated invoicing helps ensure client payments are recorded quickly, while streamlined account receivable management helps reduce outstanding balances. These tools can also enhance the overall client experience and foster healthy client relationships.
A legal bookkeeping software solution can simplify the entire billing process, from preparing branded invoices to tracking and following up on payments. Adding an online payment button to your client invoices can make it even easier for clients to pay promptly, further streamlining cash flow and improving the overall client experience.
When choosing a legal accounting software solution, you should consider your goals both in the short term and long term. A more affordable solution may seem like a good option, but it might not be robust enough for your needs down the road or integrate with other legal software programs. A more expensive solution, on the other hand, will be able to offer a wider range of functionality and provide flexibility for growing law firms.
Comprehensive financial accounting tools for law firms can also streamline deposit reconciliation, giving you a clear picture of how your firm is performing each month. KPI reporting can help you monitor firm performance, while budget reports help you stay on top of budgets and financial forecasting. Expenses reporting can also help you keep track of every dollar that leaves your firm.
Regardless of which software you choose, it’s important to have a solid structure in place before starting to manage your law firm finances. Start by determining what your goals are for the practice and then build a system that will allow you to achieve those goals.
Integrations
Accounting for law firms requires special considerations. Legal billing is a critical part of this process, and the right accounting software can ensure that it runs smoothly. A law firm can boost productivity by automating time tracking and invoicing and avoiding the errors that can come with manual data entry. This is important because it allows attorneys to spend their time on more strategic goals like building client relationships and increasing revenue.
A comprehensive law firm bookkeeping and accounting solution provides a host of other benefits, too. For example, a legal accounting software solution can automatically sync client invoices and expenses logged in Clio with Xero—creating a seamless link between the bookkeeping and accounting processes. This eliminates double-entry and helps to ensure that both accounts are updated in real-time. It also makes it easy to run KPI reports and dashboards, providing legal professionals with valuable visibility into performance that drives impactful decisions.
The best law firm accounting solutions are backed by dedicated customer support, which is especially important if you’re not an accountant and you don’t have the time to learn how to use the program on your own. You should also look for a law firm accounting program that can accommodate your unique business needs, including the chart of accounts (which is a list of financial account numbers and descriptions). The right legal accounting solution will also include tools to assist with client trust accounting, meeting IOLTA requirements, and handling complex fees and billing.
When choosing an accounting for law firm solution, it’s important to consider how it will integrate with other solutions you might use, including case management and document automation programs. Look for a platform that offers a range of integrations, including e-signatures, secure file storage and sharing, and document management capabilities. This will allow you to streamline your legal accounting workflows and improve collaboration between attorneys, support staff, and clients.
The best law firm accounting solutions will enable you to streamline your legal bookkeeping and accounting workflows and help you get paid faster. The right legal accounting software will make it easier to track billable hours and generate professional, branded invoices that meet your clients’ expectations. In addition, it will provide you with tools to manage flat-fee, task-based, and split fee billing as well as contingency and retainer billing.
