Accountants play an important role for every business irrespective of what industry it belongs to. The legal firms are not certainly left of it. The scope of work in accounting for law firms includes gathering, sorting, recording, and analysing the financial data (which comprises financial transactions, invoices, etc.)
Further, an accountant or an accounting firm can be an interpreter and advisor to the stakeholders to understand the key financial insights, which can be helpful in decision-making. Their advisory and consultancy along with the subject matter expertise can also be used for handling outside communications like financial institutions, government, customers, vendors, etc.
The need for an Accountant is evident in the following matters:
- Huge Volume of Financial Transactions: Various kinds of financial transactions occur in law firms whether it is processing the staff’s payroll, sending invoices to the clients, or clearing payments of the vendors. An accountant or outsourced accounting firm can take care of all. It can ease the law firm’s burden to record, sort, and analyse all the receipts, invoices, transactions, and reconciling with proper charts of accounts. Accountants make sure that the financial statements are prepared at regular intervals of time, thereby allowing the other staff to focus on the organisation’s core business.
- Selecting Right Resources, Tools & Infrastructure: Choosing the right accounting software for your law firm can be a game-changer for your business. An accountant is equipped with all the accounting experience and better understand your firm’s needs; thus, they can guide you to choose your law firm’s right software. Any outsourcing accounting firm must help in finding/selecting the right resources, tools & infrastructure, making working easier for owners/management of the law firms. From suggesting the right accounting software to elevating the automation to leveraging the AI in data analysis/analytics. The accounting firm is equipped with all the right experience, understanding, and expertise.
- Advice for Sound Financial Decision-Making Process: Accountants or Accounting Firm can help lay down the foundation stone for database insights to help businesses in future financial planning. They can advise on matters like current revenue streams, credit cycle periods, how to reduce them, expenditure trends, and many more. They are also helpful in liaisoning work while the organisation needs loans. Any irregularities and discrepancies related to finances can be dealt with.
- Taxation Advisory for filing and reporting various taxes: Tax calculations and returns filing are essential functions of law firms, but not the core ones. Tax calculations and Return Preparations can be very tiresome. If not handled or managed professionally, it may attract penalties from the state department or the ATO. Outsourcing accounting or hiring professional accountants online can ease the process and efficiently get the job done. An outsourced accounting firm will take full authority to file tax returns in a precise and timely manner. They will make sure that you don’t have to pay any penalties and miss any concessions or deductions.
- Payroll Calculation, Processing & Management: Paying salaries on time for the employees in any law firm is a necessary process. The accounting firm can manage this process and ensure that all the staff gets paid timely & accurately. Further, they can handle all other financial aspects related to the organisation’s employees like expense approvals, claim settlements, leaves management, etc.
- Act as a Mediator: Your accountant or outsource partner can represent you while dealing with suppliers and clients for accounts receivable and payable. This helps you maintain a good business relationship with your supplier and clients. Not only this, but your accountant can also help in dealing with external parties like banks, ATO, and other authorities.
While having an in-house accountant or an outsourced accountant will lessen your woes for the various tasks; however, we always recommend that you have a basic understanding of your business finance. Doing so will enable you to monitor what’s wrong or what’s right. Another important task to do is choose the right accountant, and you choose to either hire an in-house accountant or opt for an outsourced accounting services provider. If you are confused between the two, you can read our article, which has a detailed analysis of an in-house accountant or outsourced accounting services. Make sure to opt for specialised law firm accounting services