At the Bellingham, MA accounting firm of Ann Irons, CPA, we understand the unique financial challenges faced by lawyers who specialize in real estate. From trust account reconciliations to keeping abreast of regulatory requirements, attorneys have little room for error in their practice management.
If you find that accounting and payroll tasks take up too much of your valuable time, consider outsourcing these functions. Until then, here are a few tips to make financial matters more manageable from day to day.
Managing Cash Flow
Timely analysis is the key here. Avoid waiting until the end of each month to examine expenses, billable hours, accounts payable, and receipts. Irons recommends performing the analysis mid-month. This allows you to respond quickly and effectively to any discrepancies you find. By taking action before the issue has time to adversely impact your financial standing, you begin each new month with a clean slate of sorts. Otherwise, minor problems may snowball to create serious headaches at the end of the quarter or year.
Budget Wisely
Always be aware of how much things cost—maybe not down to the dime, but certainly within range. A good rule of thumb is to review both variable and fixed expenses on a period basis, assuming the standard one-year accounting period. Review your budget monthly, and use it to make important decisions about your firm. This is less risky than acting first, then discovering that you lack the financial means to follow through with your plans.
Accounts Receivable
Most clients are willing and able to pay for your services, but not all will do so without being prompted. Always provide an engagement letter outlining the agreed-upon scope of services and payment terms, and have each client sign one. This affords legal protection for both your practice and the other party. If a client’s payment is past due by 30 days, send a written reminder. Repeat this at 60 and 90 days, or as stated in your accounts receivable policy. At some point it may be in your best interest to terminate relationships with clients that cannot or will not fulfill their obligations.
Need help sorting out your finances? To learn more about our accounting, tax, and payroll services for law firms, or to arrange a meeting with Ann Irons, CPA, LLC, contact us at (508) 966-0700. We welcome law offices, businesses, and individuals based in Bellingham, Woonsocket, Milford, Medway, and the surrounding areas.
Ann spent over 25 years in the financial service industry, gaining knowledge and experience that allows her to provide an array of tax, bookkeeping, and accounting services for her clients. Relying on a stringent code of ethics and a dedication to maintaining the highest industry standards, Ann works hard to ensure her clients receive the quality service they’ve come to expect. A member of AICPA and MSCPA, Ann has also had an article featured in the renowned publication, Banker and Tradesman. 
