It’s tough to spring forward when your finances are in disarray. That’s why financial spring cleaning is one of the most important tasks on your 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 know how 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 attorneys’ 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 attorneys that bill and collect more than their peers. This goes hand in hand with delinquency. Attorneys 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.
Your firm likely understands most of the perks and pitfalls of contingency billing, including budgeting and billing. But there’s one financial factor that can’t be forgotten — your incurred expenses. While your clients aren’t required to pay your legal fees unless they win, they’re still responsible for filing fees, expert witness testimony, printing fees, discovery costs and other bills you paid on their behalf.
Many firms wait until the case is over before charging for these costs. But if your case is unsuccessful, you run the risk of clients skipping out on paying your incurred expenses. Automate your billing with Smokeball’s legal billing software, and make sure your incurred expense bills are paid up long before a verdict is delivered.
If your firm is exploring a move to contingency billing, Smokeball’s Law Firm Insights feature can help. Analyze your historical matter-type profitability data to learn which client types are most successful and profitable, and compare your billed time to your hourly rate to set your contingency fees.
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 QuickBooks Online to provide an all-in-one portal to analyze your firm’s receipts, check travel expenses, review outstanding tax obligations and more.
Dive into QuickBooks 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.