It is very easy for an active law practice can get their bookkeeping shed in the hustle and bustle environment. The accounts of the law practice can be left in a constant state of neglect without a specialised bookkeeping function. Most attorneys are reluctant to maintain an endless stream of financial documents when they already have too much on their hands.
Despite the reluctance, the attorneys are well aware that keeping the accounts in proper order is vital in compliance with the regulations. It also provides a clear assessment of the law firm’s efficiency to the management for the sack of planning future ventures. Let us look at how law practice can maintain proper bookkeeping practices.
A simple method where law practices can enhance the accuracy of the financial statements is to regularly reconcile the accounts (Also see What Do You Need to Know About Bank Reconciliation?) instead of making it a yearly affair. All the transactions shown in the bank statements, whether a deposit or payment, must be identified and recorded. The key to properly maintain updated financial statements is self-control as you can imagine the disastrous situation when you need to clear up the books after years (Also see Importance of Information Management System in Organisation). Identifying the party, reasons and details of year-worth of transactions is naturally more challenging than splitting the load into months.
Time Cost Management
The number one measure that should be taken by the law practices are to maintain their accounts using sophisticated accounting workflow with strong accounting controls to ensure the accuracy of the figures. The nature of the law practice business itself is the obstacle in recognising the revenue of the practice. The wide range of services a law practice renders such filing charges, consultations and court sessions can increase the complexity of the bookkeeping work.
Robust internal controls will undoubtedly permit the management to effectively keep track of the expenses incurred as well as income generated. One of the most critical control in such nature of business is the time spent on each assignment. The time cost is the core factor throughout all services supplied by law practice as it is a human-oriented business (Also see The Characteristics of Different Cost Accounting).
Appropriate documentation on the time cost allocated to each assignment will make the bookkeeping process much simpler. Proper recording of time spent on assignments can provide a helpful indicator when it comes to the billing to clients and identifying revenue that yet to be billed to clients. Appointment calendars, receivables ageing report, and assignment time cost summary the key source of information for the law practice when maintaining the bookkeeping records. Contrary to common beliefs, a record of cases-in-progress is required to summarise on-going work.
Outsource to the Accounting Experts
Finally, the most no-brainer but ideal way for law practice would certainly be to engage bookkeeping services in Johor Bahru. Even the small accounting firms in Johor Bahru provide bookkeeping services, leveraging their experience to ensure their customer’s accounts are kept in excellent order. Despite this might add on costs for law practices, the benefits in return can be quickly offset. In most situations, an attorney’s hourly charges are higher than an accounting professional. So, it makes total sense to save time and generate more revenue using the time saved.