With over 82,000 businesses using QuickBooks to do their accounting, it’s safe to say QuickBooks is a popular product. You may already use it at your law firm.
But “popular” does not always mean something is the right fit. In fact, popular generic software can pose a problem for law firms because they create compliance concerns, among other issues.
Legal accounting is fraught with difficulties that other small businesses don’t have to deal with. When you need specific features to handle legal-specific needs like trust accounting, QuickBooks simply doesn’t have the tools required. In fact, QuickBooks financials are error-prone in the legal industry because legal accounting requires a high degree of manual data entry.
Human error is the enemy of legal accounting, so it’s better to look to a more robust system made exclusively for lawyers. For a legal-specific account solution, consider CosmoLex. Here’s how QuickBooks compares to CosmoLex with critical features needed for legal accounting.
Recording time entries to properly bill clients at the end of the month is critical for a smooth billing process. When you use QuickBooks, you have to sync all information from your various software sources manually—and double-check all the work. Unfortunately, QuickBooks sometimes imports the same information twice, so it’s up to you to catch all the errors.
When you use CosmoLex, your entire system operates off the same data set. As cloud-based software, CosmoLex’s time tracking feature records time automatically on every matter, wherever you are, and whichever device you record it on. When it’s time to run billing, you can easily convert that data into invoices—no manual data entry involved.
Here are some of the benefits of CosmoLex’s robust financial data:
- No data sync needed
- No double data entry
- No data importing
Legal trust accounting is a complicated process. And with QuickBooks, there are no automatic trust accounting systems in place. The software requires manual workarounds to keep abreast of compliance requirements—and whenever manual data input is involved, it’s easy to accidentally make one of the four common trust accounting errors. QuickBooks offers no protection for overdrafts and posting funds in the wrong accounts, or any three-way reconciliation.
On the other hand, CosmoLex provides robust trust accounting solutions. It completes your trust accounting in the background while you work on other projects, automatically keeping you compliant. CosmoLex includes:
- Built-in protection for overdraft and commingling
- Automatic fund posting to the correct accounts
- One-click 3-way reconciliation that pulls in bank data for you
To understand your law firm’s bottom line, you need comprehensive software that handles both hard and soft cost tracking. QuickBooks offers few features with cost tracking, and the whole process requires you to type in the data yourself. Manual input makes cost recovery for direct and indirect reimbursements tedious. What’s more, when lawyers use QuickBooks, revenue inflates because it’s almost impossible to tell the difference between income and cost recovery in the software.
CosmoLex’s matter-centric system automatically tracks costs for you. This offers numerous benefits:
- The software checks that all funds are posted to the correct account and expenses separate into categories between firm and client, so you don’t have to do any cost entry yourself
- Built-in cost recovery reports show where your costs come from, allowing for better budgeting
- CosmoLex updates revenue automatically, so you always know how much is in your account
QuickBooks offers automatic payment tracking, which is a valuable feature for law firm accounting software. However, everything else needed to complete payment accounting requires a workaround. Partial payments require manual adjustment because they’re applied proportionately, and when you create payments from a trust account, multiple manual steps are involved to turn payments into invoices.
Online payments are the way of the future, and they make accounting easier for most law firms. When you use QuickBooks, online payments cause headaches because the software doesn’t track payments to invoices. You must reconcile them manually daily for your books to reflect recent payments.
CosmoLex offers legal-specific payment processing that simplifies the payment accounting process. The built-in online payment processing platform automates reconciliation by processing transactions from beginning to end. If a client pays partially, the money goes first to costs, then to fees. CosmoLex simplifies trust accounting payment reconciliation by applying them to the corresponding invoice with one click.
Productivity and profitability analysis
Productivity metrics are critical pieces of data to scale your law firm . You need to know how profitable your team is before you can grow. QuickBooks offers no intuitive features to analyze productivity and you can’t even do it online. You have to pull your data from QuickBooks into a spreadsheet offline and calculate the numbers yourself.
CosmoLex’s robust reporting means you can analyze your productivity and profitability automatically from the data in your software. Use CosmoLex’s reports on financial productivity to track and grow the needs of your firm.
Nothing eats up a budget faster than subscription fees. Every type of software requires a subscription fee, and QuickBooks only covers accounting, not any of the other features law firms need. If you need extra help understanding how to use QuickBooks, that costs extra. One guided setup session costs $50 out of the gate.
CosmoLex offers one flat fee for every software tool needed for your law firm. Our comprehensive legal software offers every tool you need, including:
- Legal billing
Every software you need is in one place, which lowers costs. CosmoLex is committed to teaching you how to use the software with unlimited free support and training. Every day of the work week, they offer classes to teach you how to get the most out of the CosmoLex system.
QuickBooks offers some workflow features, but you must pay for the advanced program. While their features are helpful, they don’t connect to legal practice management software. You have to use a separate program to create workflows for other needs at your firm.
CosmoLex offers effective legal practice management software that allows you to customize workflows for every need in your law firm. Organize workflows by matter and create your own web-based task workflows. Manage who on your team is responsible for each task so that remote workers stay in the loop on what needs to be accomplished in the work week.
Come to CosmoLex for all your legal software needs
While QuickBooks might be the right software for a small business, it simply doesn’t work for law firms. CosmoLex offers software solutions for every part of your practice, including:
- Legal time and billing
- Business accounting
- Trust (IOLTA) accounting
- Calendar and tasks
- Documents and email
Stop wasting time with manual accounting in QuickBooks and let CosmoLex automate tedious tasks for you. If you want financials that are always compliant with legal requirements, start your free trial with CosmoLex today.