Law Firm Bookkeeping: The Nightmare Of End-Of-Year Tax Filing

Year-end tax filing is often a very stressful time for law firms that don’t have the proper team and technology in place to ensure that their books are spotless. Even firms with dedicated accounting departments can find themselves falling behind and lacking absolute confidence in their bookkeeping.

In this blog, we’ll look at why end-of-year tax filing is such a challenge for many law firms, and delve into how outsourcing your firm’s bookkeeping function can provide the accuracy and peace of mind you need.

Why Year-End Tax Is A Challenge

End-of-year tax filing is so daunting for many firms because in order for their books to be accurate, they must be entirely caught up. However, this is easier said than done for the vast majority of practices. The average firm has tons of money moving around, whether that be in the form of standard operating costs, retainers moving in and out, or catching up on client billing and chasing receivables. It is incredibly easy to fall behind.

And when firms do fall behind, they often kick the can down the road by filing for an extension, which provides temporary solace but results in additional costs. Even if a firm does not file for an extension, your tax accountant will charge extremely high rates to rectify your books if they are not in order come tax season. The same goes for accountants. If you wait until the last minute to reach out to an external accountant for help with your books, you’ll find yourself paying an exorbitant amount of money for something that could have been avoided entirely with proper planning and foresight. 

How Practice Alchemy's Bookkeeping Team Can Help

Industry Knowledge

Reaching out to the first accountant you see on Google is a sure-fire way to pay high fees for mediocre service. Few accountants have industry-specific experience in the legal field, and it makes a big difference! Practice Alchemy’s bookkeepers are well versed in the legal industry specifically (it’s all they do!), so they know the ins and outs of your business and what makes it tick.

Cost Savings

You shouldn’t just be reaching out to an experienced law firm bookkeeper when it’s time to file taxes. If you do that, you’ll continue to experience the anxiety of the year-end tax season, just with a better outcome. Instead, you want to engage a law firm bookkeeping agency that can provide year-long, part-time bookkeeping services to ensure your books are spotless at all times. These part-time services ensure you get the level of service needed without the costs of a full-time employee.

Mission Critical Info

An outsourced bookkeeper can provide you with comprehensive financial analysis and full financial visibility year-round, which empowers you to make better business decisions instead of operating in the dark. Our law firm bookkeepers don’t stop at data accuracy. They leverage best-in-class technology to provide the business insights and projections necessary to streamline your operations and fuel growth.

Giving You More Time To Focus On Your Practice

Your time is very valuable, and it should be spent practicing the law, not crunching numbers and worrying about the accuracy of your books. Our law firm bookkeeping team saves you hundreds of billable hours a year and provides you with the peace of mind that comes with knowing your finances are in good hands. A recent study conducted by Xero found that small businesses that hire bookkeepers increase their profits by 16% by virtue of freeing up that valuable time.

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If your firm is finding itself struggling with its end-of-year tax filing, our team of law firm bookkeeping experts can help. Access real-time financial dashboards and regain confidence in your books, while getting back time so you can focus on growing your practice. Request a free consultation to learn more about how Practice Alchemy can help your firm maximize its potential.