People tend to use the terms bookkeeping and accounting interchangeably, but bookkeeping is actually just the first step in the accounting process. It involves recording and classifying financial transactions, preparing bank reconciliation, and tracking all income and expenses. Pricing your work as an expert professional requires careful consideration of various factors. Remember, pricing is an art form that requires continuous evaluation and adjustment. As you gain experience, you will find the right balance that maximizes your profitability while offering fair value to your clients.

Maintain Detailed Client Ledgers

Virtual CFOs offer flexible availability that matches business cycles and often work on specific projects like funding preparation or month-end reviews. A seasoned CFO commands a salary between $150,000 to $250,000 yearly. The total cost climbs above $200,000 annually after adding benefits and overhead. Virtual CFOs offer the same expert law firm bookkeeping financial guidance at significantly lower costs.

Bookkeeper: Day One

Start with a virtual assistant or contract paralegal before committing to full-time staff. Payroll taxes (if you hire staff) Employer taxes add 7.65% on top of wages for FICA, plus state unemployment insurance. A $40,000/year paralegal actually costs $43,000-44,000 with taxes and benefits. Small firms with physical offices and staff hit $7,000-10,000/month easily. LAA Audits focus on whether claimed costs were actually and necessarily incurred, and whether the time was recorded precisely.

Keep track of expenses

• This helps you anticipate slow periods, plan for hiring, and make informed business decisions.
• It delivers the compliance foundation required for IOLTA trust accounting while providing financial clarity for business decisions.
• Failure to keep accurate records may lead to sanctions for your firm, even if the mistake is the fault of your bank or accountant.
• By doing so, your law firm can easily keep track of accounts receivable and the status of your clients’ accounts.
• Get a bookkeeping system built for law firms – before you need damage control.👉 Schedule a consult — get it right from day one.

These professionals are years experienced and have worked as executives at bigger organizations. Their background in multiple industries helps them apply proven frameworks that add value right away. The fractional CFO model works perfectly for growing law firms, especially those reaching USD 2-3 million in revenue. It gives them expert help at an affordable price during this crucial growth stage. Small practices with attorneys can now get senior-level expertise that used to be available only to firms with 50+ lawyers. This setup helps firms save about USD 150, ,000 each year compared to hiring a full-time executive.

• • Virtual CFOs bring diverse industry experience and specialized legal expertise, including trust accounting compliance, IOLTA management, and legal-specific financial tools.
• Automating these processes not only saves time but also reduces the likelihood of compliance violations resulting from data entry mistakes or inconsistent records.
• Debits and credits are used to show where the money comes from and where it goes, thereby forming a complete financial picture.
• Law firms now embrace remote financial leadership because traditional CFO roles haven’t kept pace with the profession’s development.
• Late payments, delayed invoicing, and excess overdue payments make it challenging to financially operate.
• Look for features that support trust accounting, automated invoicing, financial reporting dashboards, and compliance with bar rules.
• For a CPA to work effectively, they will need you to provide accurate, up-to-date financial statements.

We can help you determine what’s appropriate for your current situation. Maintaining accurate ledgers and routinely reconciling accounts can also take up a lot of time. For example, you must maintain an accurate ledger for each client in case they ask for their account’s status.

Virtual vs. In-House CFO: Which is Right for Your Law Firm?

The annual CT600 filing must reflect this carefully timed revenue recognition. Due to the complex, staggered nature of LAA payments and the potential for mixed receipts, Bank Reconciliation must be performed, at least every five weeks, as required by the SRA Accounts Rules. Every transfer between the Client and Office Accounts must be tied back to a specific bill, client matter, and LAA payment notification. Disbursements are external costs paid by the firm on behalf of the client (e.g., expert fees, court fees).