--- title: "Accounts payable processing for law firms" description: "Accounts payable processing for law firms: accounts payable outsourcing: invoice capture, coding, 3-way matching, approval routing and payment-run." url: https://ledgerbpo.com/industries/law-firms/accounts-payable/ updated: 2026-09-11 publisher: LedgerBPO (SS Support Network LLC) language: en-US --- # Accounts payable processing for law firms Accounts payable processing for law firms has to distinguish firm overhead from client disbursements before anything is paid. A filing fee, a medical records charge or an expert's invoice is a cost advanced on a matter and must be coded to the client so it can be recovered; rent, research subscriptions and malpractice premiums are firm expense. - Since 2020 - US · UK · CA · AU - Named accountant plus backup - Your software, no lock-in [Get a custom quote](https://ledgerbpo.com/get-a-quote/) [Book a 20-minute call](https://ledgerbpo.com/book-a-call/) Updated September 2026 ## How it runs for law firms and solo practitioners Our AP desk captures bills through Bill.com, Dext or the firm's inbox, codes each one to a matter or overhead account, routes it to the approving attorney or office manager and prepares the payment run. The firm releases every payment from the operating account; we never pay from trust and never hold signing authority. ## What is accounts payable outsourcing? Accounts payable outsourcing means a remote specialist runs the process from vendor invoice to approved payment run: capturing bills, coding them to the ledger, matching them to purchase orders and receipts, chasing approvals and preparing payments for release. The business keeps control of the bank account and the final release. The provider works in the company's own software. ## What we handle for law firms and solo practitioners - Capture vendor and disbursement invoices through Bill.com, Dext or the firm inbox - Code each bill to a client matter or to a firm overhead account - Route matter disbursements to the responsible attorney for approval - Prepare payment runs from the operating account for the firm's release - Reconcile costs advanced paid against costs advanced billed each month ## The KPI that matters here All bills coded and routed within 3 business days of receipt with every matter disbursement approved by the responsible attorney. ## Law firms compliance notes ### IOLTA and trust accounting (US and Canada) Client funds sit in a separate trust or IOLTA account with an individual ledger per client, and the firm may never hold its own money there beyond what the rules allow for bank charges. We support the supervising attorney by keeping the client ledgers current, preparing the monthly three-way reconciliation and flagging any negative client balance the same day. We never have signing authority on trust accounts and never move client funds; the attorney approves and executes every transfer. ### SRA Accounts Rules (UK) Firms regulated by the Solicitors Regulation Authority must keep client money separate, reconcile client account at least every five weeks, return client money promptly when there is no longer a reason to hold it, and obtain an accountant's report within six months of the period end unless exempt. We prepare the reconciliations and the working papers for the COFA and the reporting accountant; the firm remains responsible for the client account. ### Retainers, earned fees and transfers An advance fee deposit is a trust liability until the work is done and invoiced. We prepare the transfer schedule showing which earned fees may move from trust to operating after the invoice is issued and any required notice period, and the attorney authorizes the transfer. Revenue is recognized when earned, not when the retainer is received. ### Costs advanced and disbursements Amounts the firm pays on a client's behalf are recorded as a receivable from that client and matter, not as firm expense. In the UK, disbursements need correct VAT treatment depending on whether the firm acted as agent. We track each cost to its matter and confirm the VAT position with the firm's accountant. ## Law firms software we work in - [QuickBooks Online](https://ledgerbpo.com/software/quickbooks-online/) - [Xero](https://ledgerbpo.com/software/xero/) - [Bill.com](https://ledgerbpo.com/software/bill-com/) - Clio - LeanLaw - CosmoLex - PracticePanther - LawPay - [All 50 platforms](https://ledgerbpo.com/software/) ## More for law firms and solo practitioners Other services for law firms - [Bookkeeping](https://ledgerbpo.com/industries/law-firms/bookkeeping/) - [Invoicing and billing](https://ledgerbpo.com/industries/law-firms/invoicing-and-billing/) - [Accounts receivable](https://ledgerbpo.com/industries/law-firms/accounts-receivable/) - [Bank reconciliation](https://ledgerbpo.com/industries/law-firms/bank-reconciliation/) - [Month-end close](https://ledgerbpo.com/industries/law-firms/month-end-close/) - [Financial reporting](https://ledgerbpo.com/industries/law-firms/financial-reporting/) - [All law firms services](https://ledgerbpo.com/industries/law-firms/) Accounts payable in other industries - [Marketing agencies & consultancies](https://ledgerbpo.com/industries/agencies/accounts-payable/) - [Auto repair shops & dealerships](https://ledgerbpo.com/industries/auto/accounts-payable/) - [Behavioral health practices](https://ledgerbpo.com/industries/behavioral-health/accounts-payable/) - [Daycares, schools & education](https://ledgerbpo.com/industries/childcare-education/accounts-payable/) - [The full accounts payable page](https://ledgerbpo.com/services/accounts-payable/) ## Frequently asked questions ### How do you tell a client disbursement from firm expense? By the invoice content and the matter reference, checked against the firm's list of recoverable cost types. Court fees, experts, transcripts, process service and records retrieval go to the matter as costs advanced. Rent, software, insurance and staff costs go to overhead. When an invoice is unclear, it is queried with the attorney before coding rather than guessed. ### Do you ever pay bills from the trust account? No, we never initiate payments from any account, and disbursements from trust are the attorney's decision and action. Where a client's trust balance is designated for a cost, the attorney executes the payment and we record it on the client ledger. Our AP work covers operating account bills only, prepared for the firm's release. ### Can you handle vendor bills in the UK with VAT on disbursements? Yes, we record whether each disbursement is a true disbursement outside VAT or a recharge subject to VAT, based on the guidance your accountant provides. The coding carries through to the client invoice and the VAT workings. The client or the firm's accountant submits the VAT return; we prepare the workings. Next step ## Books closed. Invoices paid. Every month. Tell us what is going on with your books or billing. You will hear from a named person within 1 business day, with a custom quote and a plan for the first close. - Reply from a named person within 1 business day - No setup fee, month-to-month - Your software, your data, no lock-in Start with a custom quote [Get a custom quote](https://ledgerbpo.com/get-a-quote/) [Book a 20-minute call](https://ledgerbpo.com/book-a-call/) Or call [+1-657-777-0006](tel:+16577770006) during US, UK or Australian business hours. --- Source: https://ledgerbpo.com/industries/law-firms/accounts-payable/ · Contact: https://ledgerbpo.com/contact/ · Full site map for agents: https://ledgerbpo.com/llms.txt