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What are the Major Roles of Accountants for Law Firms?
Accountants have an important role to play in almost every business. Accountants for law firms are not an exception in this regard. The basic functions of accounting for law firms are accumulating, recording, and analyzing the financial transactions of an organization in an accurate manner.
Moreover, an accountant can also act as a monetary interpreter and advisor. They can also be used for dealing with outsiders like vendors, customers, and financial institutions.
Accountants’ Contributions to Law Firms:
1. Financial Data Management
In a law firm, various financial transactions take place, like payroll expenditure of lawyers, payments received from clients, etc. An accountant can maintain a proper record of the financial transactions related to a law firm. It can help in maintaining proper records of expenses and revenues.
Accountants will ensure that the financial statements are prepared at regular intervals of time. This allows the other staff to concentrate on the core activities of the organization.
2. Offer the Right Financial Advice
Accountants can create a database that can help in future business planning. They can offer vital advice on matters like revenue and expenditure trends. They can help in making important decisions like hiring, outsourcing services, taking loans, etc. Any discrepancies and irregularities related to finances can be dealt with.
3. Helpful in Tax Filing
Tax filing is one of the essential functions of a law firm. But it is certainly not the core function. Hiring professional accountants can help in making this process easily manageable. Tax preparation can prove to be extremely stressful if not managed properly and could lead to penalties from the state tax department.
An in-house accountant will take full responsibility for the filing of tax returns in an accurate and timely manner. They will ensure that you don’t have to pay any penalties and miss out on any deductions.
4. Dealing with Outside Parties
An accountant can act as the representative of the law firm while dealing with external parties like banks for loans, taxation authorities, etc. By performing these tasks in an incredible manner, accountants allow the other members of the law firm to perform their main duties in a diligent manner.
5. Handling the Payroll Process
Payroll is an important process in a law firm. The accountant can manage this process on their own and ensure that all the employees get paid on time. They can handle all other financial aspects related to employees of the organization.
6. Choosing and implementing the right tools
Choosing the right accounting software for your law firm can be challenging as you lack knowledge and skills. Here comes into play your accountant.
Your firm’s needs are better understood by your accountant, who is equipped with all the necessary accounting experience. Therefore, he or she can actively guide you in selecting the right software for your law firm. However, some of the common accounting tools used by law firms are AbcusLaw, Bill4Time, Clio, etc.
Best Accounting Practices for Law Firms
You prepare a checklist of accounting practices that are best for your law firm’s growth in the market. This will help you gain basic knowledge about accounting that will further help you to keep an eye on your accountant and their work. You can consider this step as a preventive measure against accounting fraud in your law firm.
Focus on the following steps and systemize them today:
- Invoice accounting
- Accounts payable
- Reconciliation and reports
- Financial compliance
One more viable for law firms to streamline their accounting books is embracing outsourcing law firm accounting services. Going through the above-mentioned information can encourage law firm management to consider hiring professional accountants for their firm.
Cogneesol has emerged as a leading provider of accounting services to law firm organizations from all over the world. When you hire outsourced accountancy services from Cogneesol, be assured of premium services. They have access to highly accomplished staff and the latest software for performing these tasks.
Moreover, it offers them the opportunity to concentrate on the primary functions and maximize their revenue-earning potential. For more information, contact us at [email protected] or call us at +1 646 688 2821.
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