Even though general accounting programs such as Quickbooks were not specifically designed for legal billing, law firms can still use these programs to create legal bills that show the date, time spent, a description of services, the rate per hour, and calculate the total amount charged for each entry.[1] Some of the more sophisticated desktop accounting programs even allow employees … Read More
What is a journal entry and when do I need to use one?
are used to record a law firm’s business transactions onto its books.[1] The term journal entry comes from the times before computers existed, when businesses recorded their business transactions in a hardbound book called a journal. Each page in the journal was assigned to a different account, and every journal entry contained at least one debit and one credit and … Read More
What do "debit" and "credit" mean?
Journal entries, the entries recording the law firm’s business transactions on its books, are made up of at least one debit and one credit. A is the part of the journal entry that increases an or account and decreases a or account.[1] Accounts which increase when debited are found on the left side of the and the , and include … Read More
What is a chart of accounts?
The is a book that contains all of the accounts where business transactions are recorded. The list of all the accounts contained in the is called the and they appear in the order that they occur on the financial reports[1][2] as follows: Assets Liabilities Owner’s Equity Operating Revenue Operating Expenses Non-Operating Revenues and Gains Non-Operating Expenses and Losses When you … Read More
Can I transfer my data to a new accounting program?
The process of transferring financial data from one accounting program into a different program is called . The detailed steps for migrating financial data into a new accounting program are as follows:[1][2] Pick a cut off date – a date before which you will not make any further changes Decide whether you want to transfer your cleared transactions, your historical … Read More
What steps can I take to protect my firm from embezzlement?
You can protect your law firm from embezzlement by setting up , getting to know your employees, and looking for suspicious behavior. Setting up Internal Controls Internal controls are processes and systems businesses put in place to protect company assets, including bank accounts.[1] It is best to prepare written fiscal policies and procedures detailing the internal controls you want your … Read More
What is a profit and loss statement?
A profit and loss statement (P&L), also known as an income statement, sets out the revenues earned and the expenses paid by a law firm during a specific period of time.[1] The statement also shows the firm’s profit, the “net income”, which is calculated by subtracting the expenses paid from the revenues earned. Since the net income appears on the … Read More
What is the general ledger?
A general ledger is a grouping of all of the accounts that a law firm uses to categorize and track the firm’s business transactions.[1][2] The information found in the general ledger accounts is used to generate the firm’s balance sheet and profit and loss statement.[2] In the past, the general ledger was a book in which each account had its … Read More
What is in my law firm’s profit and loss statement?
A profit and loss statement (P&L), also known as an income statement, sets out the revenues earned and the expenses paid by a law firm during a specific period of time.[1] The statement also shows the firm’s profit, the “net income,” which is calculated by subtracting the expenses paid from the revenues earned. Since the net income appears on the … Read More
How do I track clients with overdue balances?
In a recent poll, small and solo attorneys named billing and collection matters as among the top three challenges in running a law firm. [1] Reports tracking clients with overdue balances, such as the aging accounts receivable report, are the starting point of all collection activities. [2] These reports allow law firms to print a list of past-due invoices for each client … Read More