When lawyers think of all the daily tasks on their to-do list, invoicing accounts may not immediately come to mind. But without efficient legal billing and payment processes, busy lawyers and law firms will end up struggling to get paid for the hard work they do each day.
Whether you’re scaling your business or looking to upgrade your current billing and payment solution, it can be challenging to determine which software will work best for your firm. Intuit QuickBooks is a popular accounting software option for businesses in various industries—but is it the best option for law firms?
Let’s compare the functionality of QuickBooks to the billing and payment capabilities of a legal-specific software solution like CosmoLex.
Online payment processing
Client payments keep the lights on, so ensuring you make the payment process as simple as possible for clients is essential to getting paid reliably. According to a survey by the Federal Reserve, 80% of consumers want faster payment methods, including recurring payments and online or mobile payment methods.
Both CosmoLex and QuickBooks meet customer demand by providing a variety of payment methods, including online credit card payments, eChecks, and automated clearing house (ACH) payments in addition to traditional checks and cash payments. But the comparison stops there: CosmoLex’s expanded payment capabilities provide a host of additional benefits to law firms, while QuickBooks’ limited functionality costs firms time and expensive fees.
QuickBooks can’t properly process partial payments, so it proportionately allocates partial payments to costs and expenses instead of applying them directly to costs. As a result, attorneys must manually track client payments to reapply partial payments correctly, a time-consuming and error-prone process. QuickBooks also charges a host of payment processing fees depending on the payment method used and the way the payment was accepted.
Since these fees come out of your pocket, they reduce the amount you earn on each payment and require time-consuming verification to ensure accounts are properly balanced.
On the other hand, CosmoLex’s in-house credit card processor, CosmoLexPay, charges a low, flat fee for most credit and debit cards, and a predictable fee for ACH transfers. CosmoLex also provides in-depth analytics, a secure client payment portal, and fast, fee-free funding, so law firms can access their payments as soon as possible.
Effective software solutions should minimize the time spent on administrative tasks, not increase it. While QuickBooks and CosmoLex each have helpful invoicing features, only CosmoLex intuitively automates time-consuming administrative functions, creating more space in your workflow for billable legal tasks.
QuickBooks and CosmoLex both allow law firms to establish recurring invoices and automatic invoice reminders on past-due bills. They also allow firms to easily customize each invoice with the firm’s logo and color scheme. However, QuickBooks doesn’t connect payments made with invoices submitted.
That means each payment must be manually reconciled to the appropriate invoice every day to ensure accounts stay balanced and payments are appropriately allocated.
Unlike Quickbooks, CosmoLex connects invoices, expenses, and payments in one integrated software solution, it automatically reconciles all payments received with the appropriate client account. It even allows attorneys to generate invoices in a click based on time recorded on each matter throughout the month.
CosmoLex is also designed specifically for law firms, which means it provides valuable functionalities for retainer accounts. Low retainer reminders can be sent automatically, and retainer replenish amounts can be added to invoices to maintain a retainer balance that allows firms to stay up-to-date on work.
QuickBooks is accounting software, so it should provide top-notch legal accounting services, right? Wrong—if you purchase QuickBooks for legal accounting, your accounting software’s capabilities are going to be severely limited.
QuickBooks’ biggest limitation for law firms is that it has absolutely no functionality for trust accounting. Because trust accounts are subject to tough compliance scrutiny from legal regulatory authorities, as we’ll discuss below, law firms using QuickBooks must manually run reports, enter payments, and sync data.
For instance, creating a payment from a trust account in QuickBooks is a complex process requiring multiple workarounds. Because QuickBooks has no built-in trust accounting functionality, manual processes are required to transform payments into paid invoices.
With CosmoLex, trust account payments are applied to the right client invoice in just one click. CosmoLex reconciliations are also automatic, even on complex trust accounts, ensuring law firms stay compliant while saving time.
Integration with other legal software tools
If your firm uses multiple software solutions, you want to ensure the different tools will integrate. Software integration helps prevent the need for duplicate data entry, because data is automatically synced across tools (again, important information such as financial data must be double-checked for accuracy when synched automatically).
CosmoLex and QuickBooks both integrate with many software solutions commonly used by law firms. The difference is that QuickBooks requires integration with other software tools, while CosmoLex offers users expansive functionality, and no additional software is required.
QuickBooks integrates with software solutions that extend its functionality, like timekeeping software, legal practice management software, and business reporting software. It also integrates with commonly used tools like Microsoft Office, Salesforce, and Hubspot. Without these integrations, QuickBooks could only perform billing and payment functions. It would not help attorneys with marketing, business analytics, or client relationship management (CRM).
To access a full practice management suite of tools that integrate with QuickBooks, your firm must purchase dozens of additional software tools with additional monthly subscription fees. Because data will be separately housed in each tool, it will constantly need to be synced between different software.
Additionally, to gain any actionable insights from all the data you collect, like your most profitable cases, most productive employees, or most costly administrative tasks, you must manually pull data from each applicable software solution into a spreadsheet and analyze it yourself. Finally, if you need help integrating QuickBooks with other software tools, you’ll have to pay a fee to access support.
CosmoLex integrates with many software tools, including GSuite products, Microsoft Office, and DropBox. But because CosmoLex has such robust functionality, no other software solutions are necessary. CosmoLex’s suite of features include legal CRM, project management tools, eSignature and secure document sharing, automated time tracking, and document automation, all for one low monthly subscription fee.
Finally, because all functionality works from one central data set, there’s no need to sync data between programs, and actionable reports can be generated in just a few clicks.
Ensuring legal compliance
If lawyers don’t maintain compliance with state and federal legal guidelines, they risk being sanctioned, fined, or even disbarred. Legal-specific software solutions like CosmoLex have built-in features to ensure law firms stay in compliance at all times. QuickBooks, on the other hand, requires attorneys to manually ensure compliance on all legal accounts with complicated, time-consuming workarounds.
For instance, CosmoLex has built-in protection that prevents overdrafts on trust accounts. They also ensure that trust funds don’t commingle with general firm funds, and no fees or interest are charged to trust balances. When it comes to verifying trust accounts with three-way reconciliation, CosmoLex keeps things simple with one-click reconciliation reports.
Conversely, because QuickBooks doesn’t provide this level of protection and functionality, firms handling trust accounts are constantly at risk of a compliance breach.
For comprehensive legal project management support, choose CosmoLex
Unlike Microsoft QuickBooks, CosmoLex was designed with specific functionality for law firms. With easy-to-use billing and payment capabilities, legal-specific business and trust accounting features, and efficiency-boosting features like automatic time tracking, secure file sharing, legal CRM software, and more, CosmoLex simplifies lawyers’ daily administrative tasks and gives them more time to devoted to complex legal matters.