Why Law Firms Should Outsource their Bookkeeping

Hi there, Linda Artesani, Artesani Accounting. This week I'm going to tackle the big question, why should you outsource your accounting? There's tons of reasons, and I'm going to tell you exactly why you need to hire a firm that isn't just doing accounting for every industry, that you want to find someone who, like our firm, we specialize with working with attorneys. all we do day in and day out. We're in the IOLTA, we're in the Advanced Client Calls. We can help you understand and get your records and get your firm to a higher level because we know all the tricks of the trade. We've been doing this for a while. Outsourcing is important because a lot of times you'll see in the bigger firms, they'll start to have somebody in place inside the firm that handles all the bookkeeping. And I've seen some pretty creative ways that the attorneys will rename some of the categories because they don't want that— maybe that staff bookkeeper or the bookkeeper that works inside the firm to actually know what they make. So they'll have an outsourced payroll company. Maybe they'll connect it, maybe they won't. Maybe the accountant will handle that, the tax professional will handle that at the end of the year. And then they'll have it maybe feed in, but they'll call it something else like cost of goods sold. I don't know, they'd pick a name. And then when we get involved, if they give us a call because something's not working right, we'll look at it and they say, what the heck is this? And we very quickly figure that out. So working in that way, a lot of times the attorneys don't want the people who work in the office to know those details, so they'll kind of mask that inside the chart of accounts. Another big reason you would want to outsource your accounting, besides having that kind of hiding— not so much hiding, but keeping those details out of the inner office where people work day in and day out— is how much each attorney makes, but also accounts receivable. Now, this is an area that we find when I start to do a discovery call, with a law firm, we start to dig in and look at the records. I see a lot of times that they, they're not good about collecting their money that's due to them. They'll maybe invoice the client once, they don't follow through. And those are the things that we can help with because we're not in the mix. We're not in the firm where somebody's walking in the door. We're not— we haven't had that face-to-face with the person. So we can handle it on a very professional level for the law firm. We just take that piece out of it. And then we find a lot of times that the attorneys don't want to deal at all with trying to collect that money. And in fact, most of the times, if it's in that over 90-day column, they'll just say forget about it. And we have another firm that we work with that will also, if it gets to the point where it's so old, we'll work on trying to collect that as a collection agency. But it's a professional one, one that deals only with law firms and architect firms. So it's very professional services. That's their, that's their gig. They're very good at it. And they do it in a way that the law firms would respect and really like to see. So those are the main reasons you want to outsource your accounting. You want to keep maybe that in-person person sitting at the desk not seeing it. Doesn't mean that their job will be replaced by us. A lot of times we work hand in hand with that person that's sitting inside the office. We're freeing up their time. A lot of time they're an admin or a paralegal that's doing the job of the bookkeeping. It's a role they got handed to them, and this is a way to get them out of that role that they really— most of the times when we talk to them, they don't like. And we help assist them in maybe making sure the transactions are getting properly put into the file. We help them with learning how to use the software. We'll help them with the complex compensation reporting that also goes hand in hand with a lot of the bigger firms. So we work with bigger firms as well, mid-market, larger firms, as well as a solo. But in this case, this is probably more of the larger firm, although we can help with working exactly with the smaller firm where that's the solopreneur that's doing it all, wearing the marketing hat, the sales hat, all of that. This will help get that part off their shoulders. Because for the most part, when we get to talk to those people and we get those discovery calls, we find that those attorneys are doing that work at 10:30, 11 o'clock at night. No good work comes at that time of the day when you're just so tired. So I hope that's helpful in helping assist you in maybe thinking about, maybe planting the seed to think about possibly outsourcing your accounting work. It's something that we do at our firm, and we'd be more than happy to look at your records, maybe get them in the right place. Save a little money when it gets pushed over to the tax accountant. You're not paying the tax accountant to fix it. It'll be— you'll be handing over really good records. And then we work with you one-on-one during the year. So throughout the year and helping you make decisions, we work with so many firms, we maybe have some good tips of maybe a vendor that would be better for you, or even just in tips and workflow because we design workflows for attorneys. I hope that's helpful. Please reach out if you want to hear more. Subscribe on the YouTube channel. I'd love to have you continue with me on this journey of talking about law firm accounting. If you're a bookkeeper or an accountant that has these clients and just doesn't know how to handle them, join our Facebook group, The Accountant's Law Lab. We'd love to have you there as well. Have a great day, everybody. Bye now.