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Importance of the Finance & Accounting department in Law Firms

Accounting & Book-keeping for law firms is different than ordinary financial accounting. Law firms have some inherent features which an accountant needs to cater to, like budgeting, bookkeeping, financial statements, insurance coverage, billing and collections, funding & taxes.But, why accounting is so important for law firms?

In the legal world, compliance is very important. Failing to follow rules or maintaining the standards can result in stiff penalties for law firms or cancellation of licenses for its lawyers.

“A small leak can sink the whole ship”. If the firm’s accounting is not up to the mark, chances of leakage go high. This means that the firm’s income is prone to compromises. Based on poor accounting practices, they will have no record but a vague payment log that could lead to legal challenges.

“What you focus on, is what that multiplies”. Maintaining the inflow and outflow of money will not only help you keep proper records but will also help you to analyze clearly where to invest next and what resources to use to ensure the overall growth of the firm. 

Targeting overall success of the client’s firms, CPA firms stay under substantial pressure to maintain the quality of their services and are expected to deliver results in the areas listed below in accordance with the updated policies and technology:

1.Account Receivable & Payable

·       Preparing Debtors Aging Report & 3-way match accounting    

·       Extracting Unpaid Bills Report 

·     Raising Sales order and purchase orders, Invoice Processing & Recording-  

·       Credit card transaction reconciliations

2.Financial Accounting and Reporting

·       Preparing P&L statements, balance sheet & Data entry

·      Cash Flow Statements

·       Preparing Fixed Asset registers and Accumulated depreciation reconciliations- 

·       Prepaid Schedules and deferred revenue schedules

3.Tax Preparations

Processing and tracking Audit trails

·       Filling 1099 returns for the vendors.handles.

Furthermore, firms in the US must also meet their responsibilities as set out by the AICPA, state societies, state boards of accountancy and various other regulatory agencies in terms of ethics, integrity, public interest, independence,  objectivity, and due care. The benefits US-based Law firms get if they outsource their booking and Accounting services to Indian companies:

  • The costs related to building infrastructure and manpower that are involved in setting up the division for outsourced activities will be borne by the Indian outsourcing firm  
  • Because of India’s advancement in technology, Outsourcing companies will tend to offer various software options including QuickBooks, XERO, MYOB, Quicken, Peachtree, Sage, IRIS, LaCerte, etc. This gives the firms opportunities to service clients using different software platforms.
  • Skilled accountants and bookkeepers are usually available in India at very short notice.
  • Costs can be cut by 40% to 60%, increasing margins, specifically when compared to hiring in-house.
  • Employee turnover in India is low, ensuring consistency and reducing costs related to training and set up.

At CNS Comnet, we maintain state of art tech standards in communication and reporting and are efficient in using tools like QuickBooks, AbcusLaw, Bill4Time, Clio & Tally.

We have been working in this industry for the past 14 years and have worked with thousands of firms. With a strong pool of experienced charted accountants, finance graduates and project managers, we assist you to your all accounting needs.

Why CNS could be the ideal choice to outsource your Law firm’s F&A services:

  • CNS works with small to medium-sized law firms, providing online remote & virtual accounting & bookkeeping services.
  • Our accounting services for law firms are designed to help law firms meet their goals for include bookkeeping, financial reports, annual financial roadmap, and business plan preparation.
  • We believe in sticking to timeline & furnishing quality works because we look forward to building a long term relationship with the law firm.
  • We understand business-specific needs and that no two law firms are the same. We provide tailor-made solutions.

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