Best Legal Accounting Software
As a lawyer or paralegal, it is imperative that you are organized. Your records, clients, cases, and finances should all be in order to ensure clarity, cohesiveness, and legality. This is for your reference, that of the Law Society of Ontario’s (“LSO”) and for times when you are audited. The LSO has very strict rules and guidelines when it comes to handling your finances and the finances of your clients, often referred to as their trust accounts. If you mishandle these funds in any way, you could face serious disciplinary action. This is why proper recordkeeping, bookkeeping, and accounting are important.
If you are not comfortable with managing your company’s bookkeeping and accounting on your own, there are numerous tools and software available to assist in this way. Many of them are cost efficient and will save you time and money in the long run. Read on for more information regarding the best legal accounting software and resources currently available.
What is Accounting Software?
Accounting software is an important tool for any business. It helps with the day-to-day operations and keeps track of finances. There are many types of accounting software that can be used by Canadian businesses, but there are some key things to consider before beginning search.
The first thing to consider is the size of your company. A small company will have different needs compared to a larger company, so it's important to know what you need before deciding on which type of accounting software is best for you. The next thing to think about is whether or not you want a cloud or on-premises solution. Cloud solutions are more convenient because they can be accessed from anywhere and don't require installation on your computer, but some people prefer on-premises solutions because they want complete control over their data and don't want it stored offsite on someone else's server.
You will also want to consider how involved the software is. If It is too complicated for your understanding, it will be better to find a more intuitive software to ensure comprehension and leave little room for error. Most accounting software manage the transactions of the company. They also record the transactions in journals and ledgers. The transactions are then processed to produce the financial statements. Most software can also be used to generate reports that are required by law or by auditors.
Accounting is one of those fields where automation has been able to make a significant impact on productivity. With automation, businesses have been able to save time on manual processes as well as reduce errors that may occur during data entry.
What is Legal Accounting Software?
As the name suggests, legal accounting software is a set of software that is specifically designed to be used by lawyers, paralegals, and other legal professionals who work in the legal industry. Legal accounting software is used to manage the legal practice, which includes tasks such as billing, invoicing, and collecting fees. This type of software is typically used by law firms, sole proprietors, corporate law departments, government agencies, and other organizations that need to track their legal expenses.
Legal accounting is a process that ensures that all the money generated by a company is properly accounted for, while following all rules and guidelines provided. Legal accountants are licensed professionals that ensure that a company’s financial records are accurate and up-to-date. This is done by performing a number of tasks, such as analyzing financial statements, reviewing contracts, and calculating taxes. Legal accountants also advise companies on ways to save money and avoid costly mistakes.
Legal accounting can be broken down into four major areas: (1) accounting services, (2) tax services, (3) litigation support, and (4) investigations support. Legal accounting software can help law firms bill faster, automate time-consuming tasks, and increase the accuracy of work. For example, some systems allow you to create invoice templates that are personalized for different clients. This way you can save time on invoice creation when you have a lot of clients and projects.
What is Trust Accounting?
Trust accounting refers to the process of keeping track of and maintaining the funds of a client that are held in trust. For example, if you are a paralegal and your client retains you by paying a retainer fee of $1000, that money must be held in the client’s trust fund until you fulfill the service or services you have agreed to provide to them. Trust accounts are required in any instance where you are billing a client and receiving payment for a service you have not yet completed.
Trust accounts are intended to protect both the professional and the client because it is meant to provide a clear snapshot of the client’s funds and how they are being disbursed. Although certain jurisdictions may have their own requirements, most trust accounting processes must follow two main rules:
Funds placed in a trust account cannot mix with the rest of the firm’s funds or with the professional’s personal funds
The firm or sole proprietor must maintain detailed records of the money that comes in and out of the trust account because the client’s own money should be used for their own matters
A detailed ledger of each of your client’s funds should be kept at all times because once a client’s case closes and there are remaining funds, you are required to return the money to your client. When a client receives a settlement, the settlement funds are deposited into the client’s trust account and then you are responsible for disbursing the settlement amount afterwards.
If you have many clients, it is easy to see how confusion and disorganization can set in. Keeping properly maintained books, journals, and ledgers will ensure your business is operating legally and efficiently. It will also help prepare you to answer any questions from clients or auditors at a moment’s notice.
Why is Legal Accounting Software Important?
Regular accounting can become extremely involved and complicated depending on the type of business transactions occurring. When it comes to legal accounting, it can get even more complicated because there are multiple clients and trust accounts to manage. Using a good legal accounting software can alleviate some of the pressure stemming from this. Legal accounting software is important because the program will keep you organized behind the scenes. If you set up your software properly, you will not have to do much, if anything at all, to keep your records accurate and on track.
Best Legal Accounting Software
There are many legal accounting software for you to choose from so it is important to do your research. If you are able to find a free trial, you may want to use it because it will help you see how intuitive the software is, and whether it will be a good fit for your business. Even if you do end up choosing a software that is not right for you, you can always change it to better suit your needs. Sometimes the trial-and-error process is necessary.
Below are some of the best legal accounting software for your business. Read on to find out more.
PC LAW
PC Law is a set of software tools that are designed to help law firms automate the drafting of legal documents and accounting practices. It was created by two lawyers, David Perry and Jennifer Davis, who had been working in the industry for more than 30 years at the time of creation.
PC Law has a variety of features that make it useful for law firms. The software can be used to create agreements, wills, or any other legal documents. On the accounting side, vendor payments and business expenses can be accurately mapped. Checks can also be printed from banks or trust accounts which is extremely convenient. Banking processes and reconciliation can also be done in PC Law software, which can save you a lot of time. This software is also able to process payroll requirements with ease!
CLIO
CLIO is an accounting app that allows you to keep track of all your transactions in a single place. It connects to your bank account and automatically categorizes transactions for you. This app can also connect to your trust accounts and enact the same types of processes. The app was designed with the needs of freelancers in mind but can also be used by small businesses and large enterprises.
This cloud-based accounting software includes features like invoicing, financial statements, and expense tracking. These functions are important for paralegals and lawyers alike because they regularly bill clients and pay expenses – two practices that can easily become disjointed if not properly managed.
ESILAW
ESILAW software specializes in creating and delivering legal software solutions to businesses and individuals. Amongst other things, this software provides legal research, writing, and document automation solutions to legal professionals.
ESILAW has been providing legal research, writing and document automation solutions for more than 30 years. The company's software includes ESILAW Writer, ESILAW Document Manager, and ESILAW Legal Research. This software has the ability to check writing and electronic transactions, properly facilitate trust account transactions, conduct billing and payment functions, create and review account receivables and payables, complete bank reconciliation and credit card processing. This software can also create and automate transaction entries, draft transaction ledgers, create financial reports, and customizable chart of accounts.
These features are all highly sought after in the legal accounting world because legal professionals are typically trying to reduce and automate their work. By having software that can conduct all of these functions with accuracy and efficiency, these professionals have more time to focus on their cases and clients.
XERO
Xero is a cloud-based accounting software that offers a range of accounting and business management software for small and medium-sized businesses. A unique feature of Xero is seen in the fact that users can manage their finances from anywhere and integrate more than 1000 apps into the software!
Some of the other features provided by Xero include:
Paying bills
Claiming expenses
Banking connections
Accepting payments
Tracking projects
Pay runs
Bank reconciliation
Managing Xero contacts
Capturing data
Analytics
File storage
Reporting functions
Inventory capabilities
Sending invoices
Multi-currency options
Purchasing orders
Quotes
Sales tax calculations
Accounting dashboard
Managing fixed assets
Xero also has specific features for accountants and bookkeepers so that if you decide to hire one, they can use the same software as you and easily review your information.
HUBDOC
HUBDOC is a global accounting company that offers services in the fields of taxation, audit, accounting, and advisory. Their parent company is Xero. Hubdoc is classified as a data capture tool which extracts key data from documents and then creates transactions in Xero. An additional helpful feature is seen in the ability to email bills and receipts straight into Hubdoc which can then be transferred into Xero. Hubdoc also allows you to directly publish your documents and data to other accounting software like QuickBooks. The documents can even be snapped and uploaded using the app on your phone. This software is all about online convenience and it certainly does the job.
As a legal professional, you can easily upload receipts, documents regarding court filing fees, and other related legal expenses directly. This ensures that your documents are uploaded and saved in a secure place, ready to be journaled and organized when the time comes.
Hubdoc offers relevant services in:
Bookkeeping
Tax Preparation
Payroll Services
Business Consulting
Financial Reporting Services
QUICKBOOKS
QuickBooks is a personal accounting software that was developed by Intuit. It is typically used by small businesses, lawyers, paralegals, accountants, bookkeepers, and other professionals who need to do accounting tasks. The software provides a range of features like the ability to create invoices and statements, track bills, manage inventory and payrolls. This software is available via two main products: QuickBooks Online and the desktop version. The desktop version is more popular with small business owners because it offers an easy-to-use interface. QuickBooks Online was introduced in 2003, and it is now the world’s largest cloud accounting platform.
Although QuickBooks is intuitive and relatively easy to operate, some believe it is for the more tech-savvy or advanced individual who is well-versed in accounting practices and software. Like the other software mentioned, QuickBooks offers a variety of services that can assist in legal accounting. As such, you are welcome to use this software and then have your work checked by a bookkeeper or an accountant.
WAVE ACCOUNTING
Wave Accounting, also referred to as WaveApps, is a cloud-based accounting software that helps small businesses with the bookkeeping process. The software offers a simple, automated way to manage the accounting and bookkeeping needs of a small business. It helps in managing financial statements, taxes, and payrolls. It was designed to automate the accounting process, from data entry to financial reporting. It is a powerful tool for small and medium-sized businesses looking for an affordable and easy-to-use solution. This software provides users with the ability to manage their accounting processes in one single place.
The Wave Accounting software is based on cloud technology and is available for all platforms, including Windows, Mac OSX, Linux, Android, and iOS devices. The system also has an intuitive user interface that makes it easy for anyone to use without any previous accounting knowledge or experience.
Wave Accounting has features that allow for legal billing, bookkeeping, and management of client trust funds – all functions needed as a paralegal or lawyer running their business.
SOLUNO
Soluno accounting software is a cloud-based system that can be accessed from anywhere. They offer a free trial and have a variety of packages to choose from. Their financial and matter management features, alongside their trust accounting capabilities, ensures your firm can function easily in one place with no need for additional accounting packages.
Their software includes services for:
Bookkeeping
Payroll processing
Finance and productivity reporting
Tax preparation
Budgeting
Case and contact management
Time and expense tracking
Billing
Trust banking
Unlike some of the other mentioned software, Soluno specializes in and caters to legal professionals. Therefore, all of their features have been constructed with legal accounting practices in mind.
FRESHBOOKS
FreshBooks is a cloud-based accounting software that provides small business owners with the tools they need to manage their finances, send invoices, track time and expenses, and get paid quickly. FreshBooks has a wide range of features that are designed to make accounting simple for small business owners. These features include: a sleek dashboard, seamless integration with other popular apps like MailChimp and Slack, automatic syncing between devices, real-time customer support chat, and so much more.
FreshBooks makes it easy to create, view, and manage invoice payments quickly and efficiently. The accounting features FreshBooks offers include:
Balance sheets
General ledgers
Cost of goods sold tracking
Trial balances
Accounts payable
Chart of accounts
Accountant access
Journal entries
Some of these features may be more practical for an accountant or bookkeeper to use but if you are willing to learn, this software may be best for you and your firm.
ULAW PRACTICE
ULaw Practice software is a software that helps lawyers, paralegals, and law firms manage their practice. The software was developed by legal and tech professionals who envisioned creating a tool that would effectively assist and manage the day-to-day operations of a legal practitioner. This Canadian cloud-based solution has one-click automation, simplified trust and general accounting capabilities, and precise analytics to offer premium insight into your firm.
ULaw Practice is a brand that is recognized for their legal accounting features – making it a number one choice for paralegals and lawyers.
Features of uLaw Practice software include:
Time tracking
Billing
Client management
Document management
Calendaring
Automated court forms
Cloud integration
Simplified accounting
ULaw Practice also prides themselves on being compliant with the LSO, ensuring their software meets all outlined regulations and standards.
SAGE
Sage software provides accounting and financial management assistance to businesses of all sizes. They offer a full range of accounting and business management solutions, including payroll, inventory, purchase orders, and more. Sage also provides training programs to help their customers learn how to use their products efficiently.
Sage offers the ability to have unlimited users and automate all tasks. If you are a sole proprietor but need to enlist in the help of a bookkeeper or accountant, Sage may be right for you. Sage also offers 24/7 customer support availability, ensuring any questions you have will be answered immediately.
Some features Sage offers include:
Anticipated cash flow
Smart invoicing
Quick and easy payment capabilities
Easy receipt capture
Compliance assurance
Easily pay individuals
Ability to share access with others
Multi-currency availability
Tax features
Payroll features
Bank reconciliation
AutoEntry
OTHER - HIRE AN ACCOUNTANT/BOOKKEEPER
If you are more comfortable hiring someone to do your legal bookkeeping or accounting, there are options! Not everyone has the time to learn a software and use it effectively to ensure their entries are correct and accurate. Implications for incorrect entries can be large, especially after an audit or during tax time so it is important to be honest with your abilities and seek help when necessary. If you are financially able to, you should consider hiring an accountant or bookkeeper to manage your legal records.
What is an Accountant?
An accountant is a professional who records financial transactions, analyzes them, and prepares financial reports. They are trained to be analytical and detail-oriented. They need to be able to work with numbers, solve problems, and make decisions based on the information they have.
Accountants are responsible for many tasks, such as:
Reconciling bank statements
Preparing financial statements
Making sure that transactions are recorded accurately
Paying bills and managing cash flow
Preparing tax returns
If you are searching for an accountant, make sure they have attained their Certified Public Accountant (“CPA”) designation at a minimum. This designation validates their expertise in tax, compliance, risk management, forensic accounting, and in other areas.
What is a Bookkeeper?
Similar to an accountant, a bookkeeper is a person who records the financial transactions of a business. They are in charge of maintaining the books, and make sure everything is up to date. A bookkeeper typically has a background in accounting and has completed formal training in bookkeeping, usually from a vocational school or college program.
A bookkeeper is responsible for the day-to-day bookkeeping of financial records, whereas an accountant analyzes these day-to-day transactions and provides overall advice about it. Depending on your business size and records, you may be fine seeking the assistance of only a bookkeeper. Their services tend to be more cost-efficient and at times, they are just as knowledgeable as an accountant.
Accounting for your legal business can be incredibly overwhelming. There is pressure to not make a mistake or miss a transaction. This is why it is recommended that you use the help of legal accounting software or hire a professional. Using the resources available to you will assist you in running your legal business in the best way possible.
Which legal accounting software do you use?
