In this YouTube video, a seasoned industry professional with nearly 25 years of experience shares ten practical bookkeeping and financial‑management tips aimed at law firms seeking cleaner books and higher profitability. The presenter emphasizes moving from desktop QuickBooks to QuickBooks Online for real‑time accuracy, reconciling all accounts monthly, aggressively managing accounts receivable (including using credit‑card payments), tracking time and expenses with dedicated legal billing software (LeanLaw, Clio), reviewing all financial statements each month, monitoring and planning cash flow while parking idle cash in high‑interest savings accounts, staying current with bar‑association regulatory changes to remain audit‑ready, regularly revisiting firm goals and budgets, and finally, recognizing the value of professional bookkeeping support versus DIY approaches. Throughout, the speaker stresses the importance of timely, accurate data as the foundation for sound financial decisions and invites viewers to ask questions, seek assistance, and subscribe for future content.
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We made it to April. Yay! So you probably already filed your personal tax returns or you went on extension. Today we're going to really discuss 10 tips that I have as a person that's worked in this industry for a very long time, almost 25 years. Next year will be 25 years. Oh my goodness. And just some things that really is for any business, but for law firms specifically, we've got some things that I think will really be helpful if you want to have clean books. So we get a lot of clients that come to us and they're like, my records are a mess, the bookkeeper messed up my records, whatever. And we just find that these are things that you really want to continue to do once your records are cleaned up so that you can keep accurate books. And the most important is to, if you're on desktop, move to QuickBooks Online, get yourself in a place where you've got accurate, up-to-date records. You're not digging through the old days of going back. Say you come out in January and you have to rebuild an entire year. That's, that's really like doing your business with blinders on. It's not a great way to, to work, right? You don't know where you're at if you're never looking at it. Yes, you can look at your checkbook balance, but it's really not a good gauge to let you know how the business is doing. So remember that if you can keep on top of your records in a timely way and keep them accurate and up to date, Accuracy is important, which leads to the next tip is reconcile your records regularly. Don't do it quarterly. For goodness' sakes, don't do it annually. You really want to start reconciling reconciliations every month, and I mean all the accounts— advanced client costs, your credit cards, your bank accounts, your trust bank accounts, your savings, your checking, your loans, everything, your payroll account, all of them reconcile them. and keep it reconciled all the time so that way you know that your books are accurate. Just because you batch bank feeds doesn't mean the books are accurate. So remember that and make sure that you do reconcile and keep on top of reconciliation as a process to close out your month each month. Managing accounts receivable is number 3, and I almost think with law firms I want to make it number 1 because it's one of the tasks that lawyers are great at billing, and then they just kind of drop the ball when it comes time to collect. And if somebody hasn't paid, if you've got an AR kind of based firm, obviously with trust you apply the trust and then you're all set. But with an AR-based firm, if you have invoices out there and the clients aren't paying you, and then you're writing it off, you're losing a lot of money. And the Clio Trend Report had a good statistic on how that just affects your realization rate and your your rates overall. If you start to write things back, write things down, even your utilization rate, you wanna start to take a look at those numbers. If you're writing down or writing off hours and just writing off bills, it's not going to be a way to run a profitable business, especially if you took the time to do that billing and you billed those hours and then the client's not paying you. You really wanna get on top of that. You don't wanna let it wait too long. And you also should be thinking about maybe other ways that you can be paid so that that money starts to come in the door. So in other words, getting— maybe using credit cards. It's worth the credit card to, instead of getting zero, get paid something. People are less likely to fight over a bill if it's just less painful to them to pay you with a credit card. The next thing is make sure that you track your time and expenses accurately. And over the years, talking to different attorneys, I've seen some crazy ways people have tracked their time. In a spreadsheet. They write it down on a piece of paper, then they write their end time down. Very backwards ways. That's why you want great software to do your billing and, and make yourself produce a, a professional-looking invoice. But you're also able to track your time right inside it. We like LeanLaw and Clio. Both of them are great tools for tracking time hourly and billing. And I think that that's one of the better ways. You wanna stay on top of that and stay on top of the expenses. Don't let any get missed. You want to make sure that none of them are not captured, that you have to bill back. You want to make sure they're all captured so that when you bill back to the client, you're not missing any, because if you do, that's a firm expense. And now that's money off of the top of the job that you're doing. So you want to make sure that the case or the matter has all the expenses tracked by the matter. And then when you bill it back to the client, you add those back in and bill them back to the client. So that's a pretty important step that can sometimes I see that when clients say they can do all their bookkeeping themselves, they actually cost themselves a lot of money because they're not capturing all those expenses and they're not tracking the billing time very well. They're using some free app software on their phone. It just doesn't work. Well, reviewing the financial reports monthly is the next one, number 5, my tip. And it's also something I discussed last week. I went into detail with all the different financial reports. It's really important to take a look at all of them. Don't just look at that bottom line on the profit and loss. You want to look and review your financial statements monthly and you want to stay informed about where your firm's financial performance is. You want to stay informed on that. You don't want to neglect looking at the financial information and it makes it more difficult to find these problems that come up, especially if the trust gets unbalanced. You want to know when that happens, not a year down the road when it's 5 or 6 things that are in there that are not balanced. You want to find that right away and fix it. You won't be able to find that if you're doing that 3-way reconciliation quarterly. It's harder. You want to keep on top of it, reconcile, get everything tied up in a nice beautiful bow, and then you have good accurate records. Like we always say, garbage in, garbage out. You want to look at good records to be able to make good financial decisions. And mentioned earlier, you want to look at those reports regularly. And regularly meaning you want to look at them on a regular cadence. Don't look at them in June and then not look at them again until September. It's really important, especially if you're goal setting and you want to track things in a budget. If you're only looking at them randomly or sporadically, it's very hard. And how do you know if you go back to the goals if you're really working towards the goals? I've seen that a lot of times where we'll set goals with a client and they never revisit the goals down the road. You want to follow through and really look at those goals. You want to keep an eye on cash flow for sure. Look at it, plan for it. If you need to buy a big piece of equipment or something that's gonna be expensive, you wanna plan for it. Put money away for that rainy day. We never know when it's going to come, and just have something stored on the side. And something we're telling our clients now, if they have a savings account already, maybe go to their bank because interest rates have really jumped, and they've jumped on savings accounts, and we've seen a few good firms out there right now, good banks. that are offering rates of like 4.5, 4.6%, you wanna start looking at a place that you can put that money where it's not making 0.0001. You wanna— if you're gonna hold onto that money, you might as well make some interest on it. The next tip that we have is to review the regulations with the bar. So the bar association sometimes changes things. They're usually pretty good about sending messages out, but we just had that happen in California. for 2023, where they're requiring everybody to produce this report, and it shows what's in the bank at a specific time and what's all behind it, what's all the transactions. They actually formally want this now. It's required. And you want to stay on top of that, those kind of things. When things change, you want to stay in compliance. I think compliance is one of your bigger items that you definitely want to stay on top of. And I think that if you look at it from that perspective, you want to make sure that you've got your records in a good place. So that the records are good. So you never get an audit. You never get an audit. If you do get an audit, you're able to stand tall and firm in your audit, and everything balances out. And it's very much less stressful if you've got your records put aside and together in that place. Of course, more detail, it's in the article that's attached to this video. If you wanna learn more, please feel free to ask questions, reach out. If you need help with this, we're just a phone call or a contact form away. And on that note, I hope you subscribe, and we'll see you all next week. Bye now.
