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What Is Legal Bookkeeping and Why Is It a Service Worth Outsourcing?
Legal bookkeeping is a service that includes recording and monitoring financial transactions while following specific laws and regulations. While legal professionals can handle bookkeeping services independently, it’s a time-consuming, tedious task that most don’t have time for because of their busy, hectic schedules.
For that reason, they often look for a bookkeeping specialist who understands the legal requirements for financial reporting and tax compliance and can handle recording and monitoring their transactions.
Why Is Legal Bookkeeping So Important?
Legal bookkeeping is vital to the success of any law firm or legal organization because it ensures that the business is fully compliant with the specific laws regarding financial reporting, taxes, payroll, and more. Without keeping a record of these financial transactions, companies wouldn’t necessarily know how much they’re bringing in, how much they’re spending in business expenses, what their employees are making, or how much money they’re paying in taxes.
What Will a Legal Bookkeeper Do for Their Clients?
A legal bookkeeper can create and maintain financial records, prepare statements, and even assist in the process of filing tax forms. While the exact services provided vary and may depend on the specific needs of the legal business in question, these are just a few of the many legal bookkeeping services offered to keep organizations compliant.
Recordkeeping
Recordkeeping is one of the most important services a legal bookkeeper provides. If not for keeping track of financial records, businesses could find themselves non-compliant, which could cause them to incur costly penalties and fines. In addition, legal bookkeepers have the responsibility of accurately recording any and all financial transactions, which may include classifying transactions, posting entries to ledgers and journals, and monitoring bank statements.
Financial Statement Preparation
Another standard service provided by legal bookkeepers is financial statement preparation. This service prepares financial statements for a legal organization, including income statements, cash flow statements, and more. These statements are a must-have for businesses of all sizes because they offer key insights into the overall financial health of that business. Without these statements, a business owner might not know where the money is going or if the company is in good financial standing or not.
Tax Compliance Overview
An additional service provided by legal bookkeepers is a tax compliance overview. When businesses aren’t compliant, it puts them at risk of dealing with serious and unfortunate legal issues that could eventually cause their organizations to shut their doors for good. Because lack of compliance is such a significant issue, legal bookkeepers will be responsible for using their extensive knowledge of tax laws and regulations to assist their clients in meeting their specific tax obligations. In order to do that, the bookkeeper may be responsible for preparing and filing tax returns, remitting taxes, and even responding to any possible inquiries or audits from tax authorities.
Managing Payroll
Many legal businesses have multiple people on their payroll. With that in mind, a bookkeeper can handle the payroll to ensure everyone gets paid correctly and on time, every single time. Bookkeepers will typically assist with calculating and paying employee salaries, taxes, and benefits while handling any specific steps involved in the preparation of required payroll reports. Because legal professionals are often too busy handling cases and working with their own clients, it helps to have someone else provide such an important service.
Budgeting Assistance
The legal bookkeeper can often assist with budgeting because of their knowledge of the business and its current financial situation. It’s not uncommon for legal bookkeepers to help their clients plan for the future by preparing budgets and financial forecasts. By providing such valuable information to their clients, legal business owners can make the most well-informed decisions about future expenses and investments.
Support with Audits
There are times when audits occur at random. While the thought of dealing with an audit is often frustrating and stressful for most legal organizations, having an experienced bookkeeper by their side eases that frustration. It provides more peace of mind, which is important for these businesses. A bookkeeper can assist with any auditing procedures by taking the time to provide accurate and up-to-date financial records. This can help to ensure that a company or firm stays compliant with legal requirements.
The Advantages of Outsourcing Your Bookkeeping Services
If you’re an attorney or owner of a legal firm, utilizing legal bookkeeping services will save you time and effort, freeing up more space on your busy calendar for other tasks you may need to complete. You can easily outsource the bookkeeping services you don’t want to do or don’t have time for and depend on a professional and reliable bookkeeper to handle the workload for you, completing tasks as assigned so that you’re never stuck waiting for what you need.
Save Money in the Long Run
You can save money by outsourcing your bookkeeping services. Rather than hiring in-house staff, you can depend on someone to complete these services for you on demand, whenever you need to have them done.
Eliminate Errors with Better Accuracy
Without extensive knowledge and experience in the bookkeeping department, it’s easy to make minor mistakes that can turn into larger problems in the future. Avoid dealing with possible discrepancies by outsourcing the work to a professional who can ensure accuracy while providing you with the financial statements and records that you need.
Enjoy Greater Flexibility
Choosing to outsource your legal bookkeeping allows you to scale your organization’s services as your needs change, which can be especially beneficial during busy periods or when dealing with more complex projects that require extra eyes and assistance.
Legal bookkeeping is an important service provided to legal organizations that want to keep their financial and tax-related information in order. If you have a business in the legal industry and have been trying to take care of bookkeeping on your own but are struggling to get it done and could use some assistance, enlist the help of a legal bookkeeper. You can outsource the services you need help with to save time and money while staying compliant.
