By Micky Deming from Kahuna Accounting
In a small law firm, nothing is more important than maximizing your time. Anything that can be streamlined and automated represents a tremendous weight off your shoulders and a better opportunity for growth and billable work.
Accounting is an area where law firms have significant room for improvement. For many firms, accounting is tedious, time-consuming and not helpful for overall results.
But today, with technology advancing and cloud accounting creating new opportunities for productivity – lawyers have the ability to make accounting fast, lean and a driver for the firm.
Here are 5 ways cloud accounting can simplify your life and drive your law firm forward.
- Integrated, Specialized Systems
With the rise of mobile, we are seeing an increase in specialization in apps and software. Many law firms and businesses are opting for lean, specialized tools rather than a big, bulky system that tries to do everything.
To make this work, integrations are very important. Now as one example, you can have Clio for practice management and invoicing, Gusto for payroll, Xero for accounting, LawPay for accepting payments and Google Apps for your docs and email and all of these integrate together.
This means you are getting top-notch quality at every level, and lean systems that are always improving and developing much faster than one gigantic system.
- No Data Entry, No paper
These integrations and the speed of technology is dramatically reducing the amount of paper and data entry involved in organizing a law practice.
When you think of bookkeeping, entering data and capturing paper are almost synonymous with the term. But for most of our clients at Kahuna Accounting, there is very little data entry.
Xero integrates with bank feeds and credit card feeds, pulling in all the transactions. Client invoices sync over from Clio. And bills can be scanned and dropped in or even submitted by taking a photo of a receipt. Then you can throw away the paper!
- Professional Collaboration in Real-Time
The traditional model of accounting involves information moving slowly. Uploading reports, mailing receipts, exporting to a thumb drive, then meeting in person or on the phone is the normal pattern for working together.
This is mess, counter-productive and doesn’t lend itself very well to collaboration. What cloud accounting does is organize all your financials in a single place with access for you, your firm partners, your bookkeeper and your CPA.
So at any given time you can get real time advice just by logging in, and you’re looking at the same information.
This is incredibly important for a lawyer, because you are a professional lawyer but not a professional accountant. You need to surround yourself with professionals on the financial side and minimize time wasted on administrative activity.
The cloud allows for immediate feedback and interaction from professionals.
- Real-time Forward Looking Information
Another problem with traditional accounting and bookkeeping is it’s always looking backward. Most law firms can’t pull a relevant profit and loss statement right now.
Most wait until the end of the month, quarter or even year, to gather all of their information together and pull together financial reports.
This causes a lot of stress, because things fall through the cracks and this also hurts the business because you aren’t able to do anything about the information looking backward.
With the cloud, you can get information in real-time which allows you to make proactive decisions and look forward instead of backward.
- A Second Set of Eyes
Your practice management system is a great place to track time and billing and client management. However, on its own you don’t have a great way to check that the information tracked in the practice management system is accurate.
This is very important when it comes to trust accounting. If you book a transfer in your practice management system, but forget to actually transfer the funds, how do you know?
A cloud accounting system can connect to your practice management and to your bank accounts and you can use it for a second set of eyes to ensure everything ties out perfectly. If things don’t tie out, you have a mistake and now you can find it.
Too many law firms are struggling along with a mediocre accounting system that adds to their stress and does nothing to help them build a successful law firm.
The truth is, it doesn’t have to be that way. With new technology and firms like Kahuna who specialize in setting up systems and managing them, a lawyer can focus on being a great lawyer and building the business, while having real-time financial information at their fingertips.
The right accounting system will save time, provide insight and an incredible peace of mind about what you are building.
About the Author: Micky Deming is the Director of Marketing at Kahuna Accounting. Kahuna has helped hundreds of lawyers across the country transition from a place of financial fear and uncertainty to clarity and confidence. To find out more, head to their site and fill out the form to meet the team and see if they can help. http://kahunaaccounting.com/