A Beginner's Guide to Cloud Accounting For Law Firms

Many law firms find themselves bogged down by antiquated financial practices and systems that cost them time and money. Pivoting to cloud accounting can be a great way for practices to realize potential efficiencies in their financial processes, from cost savings to increased data visibility. 

In this blog, we’ll provide a high-level overview of cloud accounting, and explain how it can be advantageous for law firms in particular.

What is Cloud Accounting?

Cloud accounting represents a distinct departure from the desktop-based accounting software of old. Instead of being installed on the hard drive of a single desktop, cloud accounting software stores your data and information safely on a remote, cloud-based server that doesn’t need to be physically located at your office. This means you can sign in from anywhere, anytime, and take a look at your books. 

If you want more information on how cloud accounting software differs from desktop-based accounting software, check out our blog comparing Quickbooks Pro to Quickbooks Desktop to determine which solution is best suited to your business needs.

Why Cloud Accounting Comes Out On Top

Cloud–based software provides many benefits over on-premise solutions, leading many practices to make a switch over the past couple of years, particularly as remote work has become increasingly popular. Let’s break down the main benefits you can expect.

Ease of Access: The most obvious benefit of cloud accounting is its accessibility and availability. You can log into your account and check your books anywhere, anytime. This provides tremendous flexibility and visibility, which is difficult to achieve with a desktop application, particularly in a remote work environment. With a cloud-based solution at their fingertips,  your accounting team can be constantly plugged in and up-to-date on the most recent financial data, approving payments or sending invoices from the road or on the go to keep processes moving more efficiently.

Cost-Effectiveness: Another key advantage of cloud accounting for law firms is that it enables you to realize much-needed cost savings. Even if the solution itself is not more affordable on its face than its on-premise counterpart, the reduction in administrative tasks translates into countless hours saved. Your team can avoid time-consuming installations, back-ups, fixes, and exports, spending that time on more productive activities that can grow your practice. 

Data Visibility & Accuracy:  Gone are the days of manually updated Excel sheets and outdated financial reports. Cloud accounting software is far superior when it comes to data accuracy and visibility, eliminating many of the error-prone manual steps that are required when relying on spreadsheets. Real-time dashboards can be particularly useful for getting a snapshot of your practice’s finances at any given moment, as they provide excellent visualization capabilities, making it easy for anyone to understand your books. 

Integrations: One of the oft-underestimated benefits of cloud accounting for law firms is the integration capabilities and advantages that it provides. You can connect your main accounting software with other cloud solutions for tasks like payroll, AR/AP, billing, invoicing, and more. These synergies may not exist with typical desktop-based accounting solutions, and they can help you consolidate all of your financial data in one place to achieve a single source of truth. 

Scalability: If your law firm is growing, and growing fast, chances are your on-premises accounting solution won’t keep up with you very well. Desktop-based accounting systems typically offer limited functionality, which is sufficient for certain small companies, but incredibly frustrating for a thriving business. Cloud-based accounting software can scale to match your business needs, starting from basic accounting functionality and adding on new features and users as needed.

If you are considering transitioning to cloud accounting for your law firm, we can help. Request a consultation with Practice Alchemy to learn more about how our experts can help you get the most out of your firm’s accounting and bookkeeping. 

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If you are considering transitioning to cloud accounting for your law firm, we can help. Request a consultation with Practice Alchemy to learn more about how our experts can help you get the most out of your firm’s accounting and bookkeeping.