Accounting can be intimidating even for the most seasoned attorneys. Law school might teach about torts and statutes, but there are no classes for accounting or bookkeeping. Whether you have a small firm or large corporation, accounting is vital to keep your books compliant with ethical rules and prevent you from leaving money on the table.
What Can an Accountant Do?
Accountants play a vital role in almost every business. Law firms are no exception. Many lawyers don’t want to handle monetary transactions or keep up with their financial records. For that reason, they often hire someone to manage those accounts. While you could hire a part-time bookkeeper, law firms should look for an experienced and trusted accountant to address these financial matters.
Legal accounting includes recording and analyzing the financial transactions of the law firm in an accurate manner. These professional accountants can help in other ways as well. They can act as an advisor and interpreter. An accountant needs to have strong attributes like attention to detail, an understanding of business ethics, and excellent monetary skills. These professionals can help finish audits, ready tax returns, and investigate fraud. A legal accountant has many different roles in a law firm.
Legal accounting contributes to the success of the practice. All financial statements need to be accurate, up-to-date, and complete. Your law firm can meet all of those obligations to your clients, partners, and the state bar with a clear financial picture. With all that in mind, here are some of the major roles that accountants can play in your law firm.
Provides Professional Financial Advice
If you are searching for financial advice, a trusted accountant can help with future plans. Accountants track your expenditure and revenue trends. In addition to that, they can help your law firm make important decisions, such as taking out a loan. If there are irregularities or discrepancies in your financial records, an accountant will straighten out those problems.
Helps With Taxes
No one wants to deal with filing taxes, especially busy attorneys. Hiring a professional accountant can help this stressful process become a little easier for your firm. Everyone knows that tax preparation can be a headache, especially if records are not appropriately managed. As a result, your practice might face penalties from the state and federal tax departments. With an accountant, you can ensure that all tax returns are filed and completed accurately and timely. You will not have to worry about missing out on deductions or paying extra penalties.
Deals With Outside Parties
Law firms have to deal with outside parties on a day-to-day basis. An accountant will act as a firm representative while speaking to tax authorities or loan officers. By allowing the accountant to handle these tasks, law firm members can focus on those other duties within the practice. Plus, an accountant can smoothly move these financial issues through the appropriate processes without any snags.
Handles the Law Firm’s Payroll Process
When you have employees, they will expect to be paid promptly. Payroll is a critical process for any business, especially legal practices. With an accountant, you can have a professional manage these processes to pay all your employees correctly and on time. An accountant can also take care of other payroll aspects of your law firm’s business.
Chooses the Right Financial Tools
There are so many choices on the market for accounting tools. It can be challenging to choose the best accounting software option for your law firm. An accountant will help with these decisions. Your accountant understands the needs of your law firm, and they are better equipped with financial knowledge. With that guidance, the accountant can help you find the best software for the practice.
Accounting Practices for Your Law Firm
Need to find a great accountant for your law firm? Before you begin the search, you must understand some basic accounting practices. With this basic knowledge, you can keep an eye on your financial records and understand the processes in your practice. There are plenty of functions that an accountant will handle on a day-to-day basis, including reconciliation and reports, accounts payable, invoice accounting, and financial compliance.
Why You Need a Professional Accountant
You can streamline your books and not worry about those financial inaccuracies when you work with an accountant. Hiring a professional accountant just makes sense for your law firm. As an attorney, there is enough on your plate. You don’t want to add the title of accountant or bookkeeper to your list of responsibilities. Outsourcing these duties helps your law firm focus on growing your practice and assisting the local community.
As you can tell, a professional accountant goes beyond just checking your books. These professionals will ensure that your paperwork and finances are ready for tax season. They can advise you during the process for a bank loan, and accountants are a great option to help with office tasks, such as payroll and revenue tracking. When you need help with those financial records in your law firm, make sure to hire a trusted and experienced accountant for your practice.
Let Us Help With Your Legal Accounting
You want to find the right accountant for your legal practice. Thomas M. Ditullio has nearly 40 years of experience offering small business accounting services. He has built a solid reputation throughout Gloucester County, providing services for businesses and individuals. At TMD Accounting, you can access a wide range of services, including financial management, tax services, and payroll. If you would like to schedule a consultation, please give us a call at 1-856-228-2205.