Mon Feb 21, 2022 | Alan Lefkowitz | CFO Services, Law Firm Accounting
Law Firm Accounting Services: A CFO Can Help
Finding the right accounting services for your law firm is critical in today’s legal arena. Law firms are still dealing with the fallout from COVID-19, so financial management is a challenge. Many lawyers are finding they have less and less time to spend on bookkeeping tasks, even though a law office is a business and must make a profit to survive.
Failing to address your law firm’s financial and business operations can cause significant trouble. One great solution for law firms is outsourcing accounting and financial reporting tasks. The market for outsourced law firm CFOs has grown over recent years. Before, most lawyers would hire an in-house bookkeeper or accountant. Now, outsourcing is the best practice. It lowers costs, streamlines operations, and lets you spend more time growing your business and focusing on your law firm’s clients.
At CFO Strategies, we provide law firm accounting services, including virtual accounting and bookkeeping. We help law firms and other businesses understand how the company is performing from a financial perspective. In addition, our team of senior professionals will manage your firm’s financial accounts, keep your books current, and handle the day-to-day accounting function so you can focus on building your law practice.
Our legal accounting process is critical for law firms to achieve growth and success in today’s fierce business world. We will explain why you should consider remote accounting and CFO services for your firm.
Why Are Legal Accounting Services and a CFO So Important for Your Firm?
A legal CFO’s job includes many tasks. CFOs are responsible for all aspects of a firm’s accounting and legal bookkeeping system. Some of these tasks include:
- Financial reporting
- Cash Flow Forecasting
- Accounts receivable and payable processes
- Standard Operating Procedures and Controls
- Obtaining Lending and Lines of Credits
Hiring a CFO is a good idea whether you are just starting as a law school graduate or already own law practice. Let’s look at the best benefits law firms with a CFO can enjoy.
1. Gain an Edge Over Your Firm’s Biggest Rivals
CFO services will help your firm stand out in today’s market, which is no simple task. With a more significant focus on technology in the legal industry, law firms that cannot grow will struggle to succeed. We stay current with the latest industry news and tech, giving your financial accounting system an edge and making it more efficient.
For example, most lawyers use the cash basis method instead of the accrual method. However, it often makes sense for law firms to run their books on an accrual basis. Switching from cash basis to accrual basis many times can give the law firm a better understanding of how it is genuinely performing financially.
When hiring a CFO or controller, typically, the first step is for that person or team to look at your financial data and records for errors. Your firm’s critical financial info includes its income statement, expenses, bank statements, daily balance sheet, cash flow, and statement of owner’s equity. That data is critical in understanding your firm’s overall health and areas where you can improve. If you currently do not have any of these financial reports, the CFO or controller will build them.
2. Use Advanced Technology
Does your legal practice automate billing? If not, you may spend more time on manual data entry than you should. Working with a CFO and professional legal accountant will give your firm access to advanced tech.
After all, your firm is a business. It needs to make money to survive. Using automation to simplify billing lets you get client invoices out faster for prompt payment. Automation also prevents human error within your legal billing process and reduces your office staff’s workload. It also ensures greater accuracy on your financial statements, which is vital during tax time.
3. Stay Ready for Tax Season
No one likes to pay income taxes, no matter how big their business bank account is. However, business taxes are complex. If you make a mistake on your firm’s tax returns, it could cause big losses in the long run. A CFO typically will work with your outside CPA so that you know your tax position and do not end up with surprises.
4. Pinpoint Weak Areas
A great CFO has the skills to inspect your financial records and accounting process to pinpoint weak areas needing improvement. They can identify needless expenses, help with time tracking, and run your business profitably.
5. Allow You to Focus More on Clients and Growing Your Business
Perhaps one of the best long-term benefits of working with a CFO is the extra time you get to spend with clients. If you don’t have a dedicated CFO or accountant, prepare yourself to spend hours looking at financial reports and doing your firm’s bookkeeping. Outsourcing frees up more time you can spend on core business processes and clients. Focusing on your clients also helps build trust and a good image of your firm.
6. Manage Your Money and Reduce Costs
Have you had trouble in the past with money? You may want to learn more about lawyers’ trust accounts, also known as trust accounting (IOLTA). With a CFO handling your firm’s cash, you have a professional to rely on for help and advice at any time.
CFO Services and Legal Accounting for Law Firms
At CFO Strategies, we offer professional law firm accounting services. Perhaps you only need a per-diem CFO, or you may have a large firm that requires a full-time accountant. No matter your needs, we have experts ready to manage your business’s finances for long-term financial health and success.
Ready to get started? Be sure to call our New Jersey office today at (855) 732-7861 to request your appointment and learn more about our legal accounting and CFO services.