It’s tough to mange and grow a thriving legal practice when your finances are in disarray. That’s why financial cleaning is one of the most important tasks on your law firm to-do list. Let’s get started.
Check in on your firm’s reconciliation
Failing to reconcile your accounts is an easy bad habit to fall into, especially if your firm is on the extra-small side and your staff is already strapped for time. But when you don’t regularly reconcile your accounts— comparing your bank statements to your client invoices — you’ll never knowhow much money you’re owed. It’s akin to running a business while blindfolded.
Ideally, your firm should reconcile its finances monthly to ensure you stay on top of your books and help protect your cash flow. Smokeball’s built-in bank reconciliation tools draw from your matter data to streamline the entire process. Meanwhile, features like invoice reminders improve your lawyers’ accountability around collections by putting reconciliation details at their fingertips. That way, they can have informed conversations with overdue clients, instead of immediately jumping to punitive repayment action.
Reviewing your income allocation report
Your Smokeball income allocation report reveals each fee earner’s earnings and whether they have collected on what they are owed. This information plays a key role in creating and enforcing equitable incentives or bonus structures. There’s no guesswork around which fee earners have been most profitable to your firm.
Firms can use their income allocation report to reward lawyers that bill and collect more than their peers. This goes hand in hand with delinquency. Lawyers who successfully collect their fees by having few (if any) delinquent clients will be more valuable to the firm — meaning firms should reward them accordingly.
Bill more without your clients paying more
Lawyers often tend to put in very long hours because this translates into successful matters and happy clients. What we fail to do is accurately record those hours and actually get paid for them.
AutoTime, Smokeball’s automatic time tracking technology, will revolutionise the profitability of your firm across both your time billed and your fixed fee matters.
Multiple large scale studies have shown that the average firm is only billing 2.02 hours per fee earner per day. With AutoTime, firms are billing 4.1 hours per fee earner per day on average. This equates to an additional $135k per fee earner annually.
Automatic time tracking allows us to show your firm the profitability of your fee earners, your practice areas, and your individual clients and matters, no matter whether the work is time billed or fixed fee. Smokeball’s unique Law Firm Insights feature can help your business’s health to allow you to optimise profitability across your practice.
Get ahead of your firm’s fiscal year and avoid fines and audits with early tax planning.
Smokeball provides a wide range of accounting and billing features. It also integrates directly with Xero to provide an all-in-one portal to analyse your firm’s receipts, check travel expenses, review outstanding tax obligations and more.
Dive into Xero to review your financial data, identify your tax deductions to prepare accurate tax returns and ensure you don’t pay an extra dime in taxes. Conduct forward-thinking tax planning now to set your firm up for future financial success.