At the end of each year there are various financial reports law firms should have to be in compliance and have the data they need to make strategic decisions for the following year.
Accounts Receivable and Collections Reports
Make sure all time and billing is up to date. For invoices that are past due, create a full list of any outstanding bills and then work to collect on them before the end of the year.
Trust Accounting Reports
Three-way reconciliations should be run in order to ensure the books are accurate and compliant, as well as complete reports for each individual client ledger. Records should be up-to-date and complete to make sure you close out the year’s books properly.
When reviewing client ledgers, be sure to check retainer amounts if you don’t have evergreen retainers set up. Year end is the perfect time to send out replenishment notices to make sure you start off the year with ready to bill retainer accounts.
Profit and Loss Statement
Evaluate the annual profit and loss statement, as well as monthly statements, in order to evaluate for trends as well as the firm’s overall financial stability.
Additional reports that can help give an overview of the firm’s financial position include Work In Progress (WIP) reports, the balance sheet and statement of cash flows. Your accountant can give you insight into what additional reports can provide your firm with the financial data it needs.
Sign up now to get more tips and news from CosmoLex
- 5 Ways To Use File-Sharing Tools at Your Law Firm
- Top 5 Best Family Law Software That Support Flat-Fee Billing
- Keeping Your Law Firm Safe in the Cloud (40:06)
- What Are the Best Criminal Law Software Options That Help with Collections?
- Updating Your Law Practice: How to Effectively Migrate to New Practice Management Software (26:04)