Accounting for Law Firms

Accounting for Law Firms

Accounting firms help many individuals and companies make financial decisions. No matter what kind of business you run, an accounting firm can offer advice and assistance to help your company set financial goals and develop budgets. 

If your law firm seeks dependable financial advice or wants someone to handle your weekly payroll, an accounting firm may be the right choice for your organization. To help you make your choice, we have developed a list of tips for choosing the best accounting firm for your law firm.

Tips for Choosing the Right Accountant for Your Law Firm

Are you wondering how to choose an accounting firm? Your law firm can greatly benefit from hiring an accounting firm, but first, you need to know where to start your selection process. Follow the tips below for guidance in choosing the right legal accounting for your law firm.

1. Review the Company’s Industry Experience

How long has the company been working in the industry? Accountants generally specialize in certain industries to offer clients improved, personalized service. For example, a retail accountant may not be the best choice for a client in the agricultural industry. Ensure that the accounting firm you choose has experience working with law firms. 

At Marshall Jones, we have more than 30 years of experience providing professional accounting services to various clients, including law firms, consulting agencies, marketing firms, ad agencies, construction companies and non-profits. We also offer tax planning and preparation for law firms.

2. Consider How Much Control the Firm Has

What level of service does the accounting firm offer? How much control over your bookkeeping do you want to keep or relinquish? If you want comprehensive bookkeeping services, ensure that you find a full-service accounting firm. These firms employ bookkeepers who handle the everyday client transactions. Accounting firms that do not employ bookkeepers may charge more if you need a CPA to handle your routine bookkeeping tasks.

3. Determine Whether the Firm Provides Audit Support

When dealing with the Internal Revenue Service (IRS), it can be reassuring to know your trusted accountant is at your side. An IRS audit can happen to any business or individual, but facing one can be an incredibly stressful situation. An audit is a review of your firm’s financial data, and our audit and assurance services at Marshall Jones will ensure your financial data is accurate.

With some accounting firms, you may be able to use their offices for audit purposes. An accountant will also be present to represent your interests. At Marshall Jones, we can offer your firm feedback for improvement, drive growth, reduce expenses and identify potential new ways to increase your firm’s profitability. 

4. Determine How the Firm’s Payments Work 

Fees vary from one accounting firm to another. Some accountants charge by the minute, and each phone call between you and your accountant can raise your bill. Other accountants charge a predetermined rate for every financial task performed, like preparing profit and loss statements, filing income tax forms or compiling net worth statements. 

5. Ask Fellow Law Firms If They Have Worked With the Company

Finally, ask for references from other law firms. When it comes to receiving references for accounting firms to partner with, nothing beats word-of-mouth. Word-of-mouth is just as valuable today as it has ever been. Speak with business associates and friends to learn which accounting firms they use and whether they would recommend those firms to other law firms. 

Why Is Accounting So Important for Law Firms?

Law firm accounting professionals can help your law firm operate more efficiently. An accounting firm can help your attorneys and managing partners get a better grasp on your business, affecting your cash flow, client profitability, staff efficiency, attorney compensation and compliance with your state’s bar association about how you manage your funds. 

The role of a professional legal accountant includes the collection, interpretation and use of financial data to help your law firm grow and stay compliant. An accounting firm can handle:

  • Completing payroll
  • Recording expenses
  • Completing tax returns
  • Managing financial data
  • Accounting for case costs 
  • Distinguishing between income and revenue

An accounting firm can help you systemize workflows in your law firm, such as tracking billable hours versus non-billed hours. You may also want to consider fixed fees versus hourly fees, as this can create flexibility for your clients and help your attorneys determine the best way to bill clients for affordability and profitability. 

Additionally, an accounting firm can help you select the right accounting method for your law firm. 

  • Cash accounting: You may want to choose cash accounting if you want simplicity. With cash accounting, you can easily determine when transactions have occurred, and there is no need to track payables or receivables. 
  • Accrual accounting: The other accounting method you can choose is accrual accounting. You may want to choose accrual accounting if you want a more realistic idea of your expenses and income during a certain period. This form of accounting records expenses and revenues when they are incurred and earned.

Outsource Your Accounting to Marshall Jones

Outsourcing to an accounting firm like Marshall Jones will give your law firm the amount of control over your finances that you desire and take away the hassle of having to do it all yourself so you can spend time working billable hours instead of doing non-billable administrative tasks. For more than three decades, our certified public accountants and advisors at Marshall Jones have been serving the individuals and businesses in Atlanta. We provide exceptional client service with complete integrity and the highest levels of technical competencies. At Marshall Jones, we will:

  • Provide your firm with a customized experience: We will strive to learn as much as we can about your company and its business goals, which allows us to offer the services you need, like tax-minimizing suggestions and strategic planning. Our flexible strategy ensures that we can deliver the level of service you need, whether that is seasonal help or full-time bookkeeping. 
  • Save your law firm time and money: Our team will handle the time-consuming aspects of bookkeeping, allowing you to focus your time and efforts on running your business. When you work with us, you will not need to recruit, hire, train or onboard an in-house bookkeeping professional.  
  • Allow you to retain control of your firm’s bookkeeping: With Marshall Jones, you can retain the level of control you want when it comes to your firm’s bookkeeping. Whether you want to receive regular reports or leave the details to us, we can accommodate your wishes for control over your bookkeeping. 

Contact us today to outsource your accounting to Marshall Jones or to learn more about the outsourced accounting services we offer.

Sources

  1. https://marshalljones.com/industries/professional-service-organizations/
  2. https://marshalljones.com/services/audit-assurance/
  3. https://marshalljones.com/contact-us/
  4. https://marshalljones.com/services/outsourced-accounting-services/