Accounting Clerk responsibilities include keeping financial records updated, preparing reports and reconciling bank statements. You will also run accounting software programs (e.g. SAP) to process business transactions, law firm bookkeeping like accounts payable and receivable, disbursements, expense vouchers and receipts. A successful accounting assistant should be familiar with all accounting procedures and have a flair for numbers.
Regardless of the size of your law firm — even if you’re a solopreneur — it’s important to know accounting and bookkeeping basics. By learning the fundamentals of accounting, you can make sure your firm is compliant with ethics rules while finding ways to optimize your cash flow. If you want your firm to stay compliant, be financially successful, and grow, you need to have an accurate and clear bookkeeping system for your law firm to follow. This could mean taking on bookkeeping tasks in-house or hiring a professional bookkeeper with experience working with law firms. This is because a professional legal bookkeeper and accountant can help you manage your firm’s revenue and ensure your firm’s financial transactions are handled ethically and accurately.
What Are the Key Responsibilities of the Finance and Accounting Departments in a Small Business?
The key to good accounting is keeping detailed records of every single transition coming in or going out of your IOLTA. It doesn’t belong to you, and if you claim it as such, you could face the consequences from regulators and have a more challenging tax season. To do so, you’d first need to transfer that money into your business account. Law firms are expected to have a separate but essential trust account, typically called an IOLTA.
- Bookkeeping is one thing that pops into just about anyone’s mind when they think of accounting, and there is a good reason why.
- This would make bookkeeping and accounting much simpler and more efficient for the law firm.
- Account numbers of the chart of accounts are structured to suit the needs of your law firm, the jurisdiction, and the practice area.
- While you might think your attitude towards bookkeeping is trivial compared to cold hard cash, it affects your business.
- In many cases, failure could have been avoided if the owners had applied sound financial principles to all their dealings and decisions.
For instance, a firm might accept the risk and start as unincorporated to avoid the incorporation fees. Over time, as additional owners move into the entity structure, the firm can add additional shareholders or can reorganize as a partnership. No doubt you have plenty of questions about how to set up a new firm and get off to a great start. The BLS is committed to providing data promptly and according to established schedules.
Ensure you have the right bank accounts set up
Whether you hire an accountant, a bookkeeper or both, ensure they’re qualified by asking for client references, checking for certifications or performing screening tests. A CIA is an accountant who has been certified in conducting internal audits. To receive this certification, an accountant must pass the required exams and have two years of professional experience. CPAs have passed the Uniform CPA Exam ― a challenging exam that tests knowledge of tax laws and standard accounting practices. AIPB certification requires bookkeepers to have at least two years of full-time work experience and pass a national exam.
There are several types of accounting certifications that accountants obtain to expand their skill sets and gain positions within larger organizations. In addition to CPA credentials, other common accounting designations are chartered financial analyst (CFA) and certified internal auditor (CIA). However, if your accountant does your bookkeeping, you may be paying more than you should for this service as you would generally pay more per hour for an accountant than a bookkeeper. To earn the certified public bookkeeper license, bookkeepers must have 2,000 hours of work experience, pass an exam and sign a code of conduct. They must take 24 hours of continuing education each year to maintain their license.