The balance sheet[1]shows only those general ledger accounts that track the law firm’s assets, liabilities, and equity as of a specific date. The trial balance shows all general ledger accounts on one page, with the accounts that increase when debited shown on the left side and the accounts that increase when credited on the right side.[2] The total amount of … Read More
How long does it take a check to clear the bank?
A check clears when the money from the check writer’s bank account is actually moved into the account where the check was deposited.[1] Because it can take as long as several weeks for a check to clear, federal laws require banks to make funds available for withdrawal before a check has actually cleared.[1] But, if the check fails to clear, … 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
Why do employees embezzle from their employers?
Employees embezzle company funds for a variety of reasons[1][2] such as: They think that their employer wronged them somehow, e.g. passed them up for a promotion, or treated them unfairly, etc. They think that they are not being compensated fairly for the services they provide to the employer. They think that the theft won’t hurt the employer because the employer … Read More
What is the purpose of a balance sheet?
All businesses, including law firms, use three reports to analyze their financial position – the , the , and .[1][2] The purpose of the balance sheet is to capture the law firm’s financial position at a specific instance of time and is used to evaluate the firm’s financial health.[2] The balance sheet shows all of the law firm’s and as … Read More
What goes into a law firm’s disaster recovery plan?
A (a “DRP”) must be flexible enough to address all sorts of disasters that can affect a law firm’s ability to function whether it affects IT infrastructure only, IT infrastructure and the physical premises, the ability of key personnel to provide services to the firm, or the safety of physical premises when occupied by firm personnel.[1] The ABA and most … Read More
Does my law firm need a disaster recovery plan?
Many law firms believe that they do not need a , a plan to get the firm up and running after a disaster strikes, because they do not operate in an area affected by hurricanes, tornadoes, earthquakes, or floods. But disasters come in all shapes and sizes, and can include smaller things such as fires, cyber attacks, theft, unexpected loss … Read More
Can I use a general accounting program like QuickBooks for timekeeping?
Many general accounting programs like QuickBooks allow companies to track the time each attorney spends billable activities for a given client.[1][2][3] You can then use the time entries to generate an invoice.[5][6][7][8] References 1. Time Tracking Invoices in QuickBooks 2. Tracking Time in QuickBooks 3. Accounting Software just for Law Firms 4. How to Include Billable Time on an Invoice … Read More
Can I use a general accounting program like QuickBooks to track reimbursable costs?
There are two types of reimbursable costs, and . Soft costs are those costs that the client’s fee agreement allows your firm to bill for even though your law firm doesn’t write a physical check to a vendor for the item. These include items such as copies, general postage, facsimiles, etc.[1] Hard costs are those costs attributable to a specific … Read More
Can I email invoices to legal clients?
Since legal invoices are communications between lawyers and clients that may reveal an attorney’s strategy or legal advice, some states consider them to be privileged. [1][2][3] Therefore, law firms should check with their state bar association to determine what they need to do when emailing privileged information to clients, as those requirements could apply to emailed invoices as well. Most billing … Read More