Do you have a bookkeeper right now? Or is this another one of the many hats you wear in your practice? Do you feel, as many of the attorneys we speak to do, your bookkeeping needs are not at “the level” where you need assistance yet? Have you been burned working with a bookkeeper before and leery about starting a new relationship? Can you even imagine a world where you might be able to just practice law… and your law books take care of themselves? Or does it just seem too good to be true?
You may have questions simply focused on: What does a law firm bookkeeper do? And we are here to answer that question!
In short, a law firm bookkeeper is responsible for managing the financial records and transactions of a law firm, monitoring cash flow, reconciling accounts, chasing down late payments, and many other elements related to the financial health of the business. Law firm bookkeepers work closely with attorneys, partners, shareholders, and additional key staff members to ensure accurate financial management and reporting.
We know you may want to know the specific tasks you may want your law firm bookkeeper to handle and we want to share a few examples right here.
1. Record Keeping. Your law firm bookkeeper maintains accurate and up-to-date financial records for the law firm. This includes recording all financial transactions, such as client payments, vendor invoices, and employee expenses, into the firm's accounting system.
2. Accounts Receivable. Your law firm bookkeeper tracks client billing and accounts receivable. He or she can generate and send invoices to clients, record payments received, and follow up on any outstanding payments. Your law firm bookkeeper may also handle collection efforts for overdue invoices.
3. Accounts Payable. Your law firm bookkeeper manages the law firm's accounts payable. This involves reviewing and processing vendor invoices, ensuring that bills are paid on time, and reconciling credit cards and vendor statements with the firm's records.
4. Bank Reconciliation. Your law firm bookkeeper reconciles the law firm's bank accounts with the firm's financial records on a regular basis. This helps identify any discrepancies, errors, or fraudulent activities and ensures the accuracy of financial information.
5. Financial Reporting. Your law firm bookkeeper prepares financial reports, such as profit and loss statements, balance sheets, and cash flow statements, to provide the firm's management with a clear picture of the firm's financial health. These reports help partners and attorneys make informed decisions regarding the firm's operations and future planning. Your bookkeeper can also share insight into origination fees for specific attorneys and keep track of earned bonuses.
6. Connect with Your Law Practice Management Software. When you work with a law firm bookkeeper who has knowledge of law practice management, such as the Practice42 Premier Law Books Team, you can correctly connect your online bookkeeping with your law practice management software. This step will further the goals of a streamlined, efficient law practice with your law practice management software serving as your true hub of operations.
7. Payroll Processing. In some cases, you may want your law firm bookkeeper to handle payroll processing for the law firm. This includes calculating employee wages, processing payroll tax withholdings, and ensuring accurate and timely payment to employees, as well as working with contractors. This can help eliminate friction between team members and also help with ensuring privacy is maintained. There is so much your law firm bookkeeper can do for you! While each of these tasks is critical for the streamlined operation of your law firm, even more important is how a strong law firm bookkeeper can help you take back your time and keep your focus on what matters in your firm. Specific responsibilities of your law firm bookkeeper vary depending on the size of the firm, the complexity of its financial operations, and any specialized accounting software or systems used. We look forward to discussing your needs with you. We encourage you to schedule a free Strategy Session with the Practice42 Premier Law Books Team.