Law firms are among the most client-driven businesses around. Every day, attorneys are focused on doing the best they can to advance their clients’ interests. While meeting client needs should always be a top priority, small and mid-size law firms also face the challenges common to most small and growing businesses. They include:
- Managing cash flow
- Staying in compliance with regulations
- Tracking hours for client billing
- Invoicing clients and tracking accounts receivable
- Managing vendors and tracking accounts payable
- Marketing, business development, operations, human resources, and all of the other tasks involved in running a small or mid-size business
To get ahead in a competitive marketplace, forward-thinking law firms manage these competing priorities by outsourcing some of these tasks. Although many law firms already see the value in hiring a specialist to, for example, create or update their websites, some firms still do their own accounting. In doing so, they are missing out on some great advantages.
Top 4 benefits of outsourcing your firm’s accounting
Partnering with a reputable accounting firm that specializes in professional services businesses can offer significant benefits for small and mid-size law firms.
- It saves money
There are many ways accountants can help you save money – it’s what they do best. To begin with, none of the hours you spend on bookkeeping, taxes, accounts payable, and accounts receivable are billable. Just by taking over the accounting workload, you’re able to do more billable client work. In addition, your accountant may be able to suggest a more favorable business structure for your firm, help you increase your business’s deductions, and set up systems like automated invoicing to speed up client payments.
- It saves time
As an attorney, you’re much more efficient conducting legal research, formulating advice, and preparing documents than your clients would be, because you’re an expert. For that reason, it makes sense for your clients to trust you with those tasks. The reverse is true with accounting tasks, however. It’s most efficient to hand off accounting and tax services, rather than spending time figuring it out yourself.
- It protects you
A reputable accountant is an expert who knows how to meet reporting and tax requirements for federal, state, and local governments. Firms that choose to go it alone risk missing important nuances of the IRS’ regulations.
- It moves your business forward
As your accountant gets to know your business, he or she can find ways to streamline your firm’s financial processes, from billing and invoicing to cash flow management. A good accountant is a key business advisor who can help your firm grow.
In summary, a good accountant can be a great advocate for your firm’s interests – and let you keep your focus on the clients you represent as your business grows.
Joe Gibbons, CPA is managing partner of Gibbons & Gibbons, P.C., a Northern Virginia-based accounting and business advisory firm that specializes in working with law firms and other professional service providers. Contact him today.