How it runs for law firms and solo practitioners
The accountant prepares the monthly three-way reconciliation for the supervising attorney's signature and closes the operating books within five business days.
What is outsourced bookkeeping?
Outsourced bookkeeping means a remote accounting team records, categorizes and reconciles your business transactions instead of an employee doing it in-house. You keep ownership of the accounting file and the bank relationship. The provider works inside your software on a fixed schedule, so the books are ready for reporting, tax and lending whenever you need them.
What we handle for law firms and solo practitioners
- Post fee invoices from Clio or LeanLaw to operating revenue when earned
- Record filing fees, experts and court reporters as costs advanced by matter
- Mirror every trust deposit, disbursement and transfer to the client ledger
- Reconcile operating, trust and credit-card accounts each month
- Prepare the three-way reconciliation package for attorney review and signature
The KPI that matters here
Operating close and three-way reconciliation package delivered within 5 business days of month-end.
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
- Xero
- Bill.com
- Clio
- LeanLaw
- CosmoLex
- PracticePanther
- LawPay
- All 50 platforms
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Frequently asked questions
How do you keep trust transactions out of the operating books?
Trust activity is recorded in the practice management system's trust ledger against a named client, and the operating ledger carries only a mirrored trust liability and trust bank balance that must equal each other. No fee is recognized from a trust deposit until an invoice is issued and the attorney authorizes the transfer. The two systems are reconciled monthly.
What counts as a cost advanced and how is it posted?
Any amount the firm pays on behalf of a client and matter, such as court filing fees, expert witness invoices, deposition transcripts and process servers. We post each to a client-cost receivable tagged to the matter, not to firm expense, and rebill it on the next invoice. Unbilled advanced costs older than 60 days appear on the weekly note.
Do you work in Clio or in QuickBooks?
Both, because they do different jobs. Clio holds matters, time, billing and the trust ledger; QuickBooks Online or Xero holds the operating general ledger. We keep the Clio sync healthy, post what the sync does not carry and reconcile the two so partner reports and tax figures come from a single agreed set of numbers.
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