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4 Best Ways to Stay Compliant with Legal Accounting Rules

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Lawyers have had years of training to excel in the legal field. They are experts at handling complicated cases, managing and resolving client’s concerns and handling trusts. However, lawyers do not have the expertise or the time to maintain their professional legal accounting standards. For that reason, they need to get professional accounting assistance.

Accounting and taxation laws keep changing with time. Every state has its own set of requirements that small-medium businesses need to fulfill. Similarly, lawyers or law firms also need to maintain their business accounts in the most professional and updated manner. The best way to stay compliant with the latest laws is to hire an accredited accounting firm.

Hiring an accredited accounting firm will help lawyers or small law practices professionally maintain their business accounts and increase CRM. Like every business, lawyers also need to invest in client relationship management. Lawyers need to spend more time helping and satisfying client’s queries by maintaining strong credibility in the legal market. It not only assists in their work but also increases their chances of business growth. Thus, lawyers should hire the best available law firm accounting services in their town.

Other than that, here are some amazing ways to stay compliant with the legal accounting rules,

  • Balance Books Regularly
  • Update Clients on Trust Funds
  • Use Legal Accounting Programs
  • Conduct 3-way Reconciliations

Balance Books Regularly:

Lots of business transactions take place daily. Not all cash flows are recorded properly in the books. Especially, if lawyers are maintaining accounts themselves, then there are more chances of mistakes. Lawyers are so engrossed in their work, that they can not record all transactions, or keep track of all receipts. Therefore, they need to look for a dedicated person to record all cash flows.

Cash flows are an essential part of any business. Proper recording of a cash transaction is extremely important. It helps people to analyze where the money is coming from or where it is going. Therefore, cash transactions should be recorded accurately on all business accounts. This process is known as bookkeeping. Bookkeeping is the first step to stay compliant with the accounting system.

Lawyers should hire dedicated bookkeepers, who will keep track of all business transactions and, client’s funds accurately. Your bookkeeper should be familiar with the latest accounting laws and should use the updated legal accounting program.

Update Clients on Trust Funds:

Lawyers should implement strategies to increase client’s trust and credibility. Increasing focus on CRM will help them to gain a positive name in the legal market. Furthermore, lawyers should always update their clients on their trust funds status. They should use such accounting programs that automatically update their client on funds status.

There are strict laws in the protection of the client’s property. In case of any mistake, lawyers can be charged heavily or with harsh penalties. Therefore, trust accounts should be handled by legal accountants. Small law practitioners can hire online accounting services for lawyers to keep a proper check on client funds. This will reduce the chances of violation and ease the lawyer’s stress.

Use Legal Accounting Programs:

Accounting is the key to business growth. All businesses depend on accounting operations to plan their next move. Similarly, law firms also require some financial and analytical insight into their business accounts. However, legal accounting is a little bit different than business accounting.

In legal accounting, the accountants should have prior experience in managing legal accounts, funds, and client’s trust. There are special accounting programs designed to assist legal accountants. Such programs need training and expertise to handle everything professionally. Therefore, lawyers should check the work history of an accountant before recruitment. Otherwise, consulting an accredited accounting firm is a wiser option.

Conduct 3-way Reconciliations:

Businesses conduct bank reconciliations at the end of each month to avoid errors. Law firms should also do the same. But instead of two-way bank reconciliations, law firms have to do three-way bank reconciliations. These reconciliations take place between the firms, bank account and client’s accounts.

Trust reconciliations allow lawyers to check the money lending status. This also helps to check the money statement on client trust accounts. Reconciliations help businesses to monitor the cash flow activity and avoid any frauds.

Hence, it can be stated that the ideal way to stay compliant with the legal accounting system is to hire an accounting firm. An accredited accounting firm will provide professional, full-packed and affordable services at once. You will not have to worry about any bookkeeping, accounting or auditing stuff. This will make your legal accounting procedure more compliant and fully integrated.

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The ideal way to stay compliant with the legal accounting practices is to hire professional law firm accounting services. This will increase your credibility and reduces accounting errors.