“Nobody wants to look at ugly data,” says Tyler Chapman.
He finds offering stakeholders sloppy and unpolished reports is one of the biggest accounting blunders law firm accounting staff can make. Instead, the LexisNexis business consultant recommends staff consider the audience first and customize reports for easy absorption.
Polished reports are a function of process – and good process breeds efficiency. How many law firms find themselves in a mad dash at the end of a fiscal quarter, year, or a looming tax filing deadline?
Simply by putting a few best practices in place throughout the year, attorneys can take charge of the law firm’s accounting needs. It helps avoid the fire drills and also puts firms in a better position to file their taxes without added headaches.
Here he offers six of his best-kept secrets about how firms can better navigate some of their biggest accounting challenges.
1. Place Info where it can be Easily Found
“I can’t find the information I’m looking for when I need it.” This is the number #1 accounting challenge Mr. Chapman hears on a daily basis. Attorneys don’t always think about how they are inputting information, or how this is going to affect them when they need to retrieve it. In a twist on the old adage, Mr. Chapman likens this to, “putting a needle in a haystack.”
A better approach, involves entering data in such a way that it can be easily accessed at a later time. Allocating transactions with some type of code so they can be readily identified and pulled up quickly, is a good start. For example, coding a specified transaction as health insurance related, and then sub-coding it as either, a client or employee related transaction, can make a world of difference.
2. Don’t Use Ugly Data
Don’t be shy about looking into using custom reporting tools to make accounting reports look more professional. For example, law firm financial management tools such as the Juris® software have custom reporting options. Customized reporting meet specific law firm need and automate some reports to save time.
And don’t overlook standard reports already in the software a firm owns. A 2014 small law billing survey found 67% of law firms that have purchased software with standard reporting features that go unused.
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3. Hire a Process Management Consultant
Sometimes attorneys simply don’t have the time to analyze what it takes to make a firm’s accounting process more efficient. In this case, hire a process management consultant to do it. These individuals offer an outside perspective and have the expertise to assess what changes need to be made.
4. Know When to Relinquish Control
Mr. Chapman recalls a time when he consulted with an attorney whose firm was undergoing a rapid expansion. The firm tripled in size, yet the founding attorney was still trying to manage the firm’s accounting in addition to servicing his clients. In other words, he was having trouble relinquishing control of the back-end of the business, which was causing inefficiencies.
The lesson was learning to delegate non-legal work to support staff. This is a savvy move that frees attorneys to focus on practicing law and entrusts in administrative staff to do the tasks they were hired and trained to complete.
5. Develop a Process Management Guide
It’s important to have a continuity plan in place for the firm. This ensures if a member of the support staff is unexpectedly away, all members of the firm, including the attorneys, know how to do the generic day-to-day tasks.
This starts by having a well-documented set of procedures in place for the firm. Selling the idea to attorneys and staff is easy, adds Mr. Chapman, just tell them the phone won’t ring while they are away.
Better yet, by putting these efficiencies in place, perhaps the only time the phone will ring, is when a happy client is on the other end.
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