Installing good software does not automatically create a good finance function. A firm may use Clio for matter management and billing alongside Xero for business accounting, yet partners can still struggle to understand WIP, debt, profitability and cashflow. The problem is rarely the existence of the systems. More often, Clio and Xero for law firms…
![How to Reduce Law Firm Lock-Up and Get Invoices Paid Faster]()
A law firm can have plenty of work, report a profit and still struggle for available cash. Often, the money is simply stuck between doing the work and receiving payment. That delay is known as law firm lock-up, and reducing it can have a direct effect on the amount of cash available for salaries, tax,…
![Law Firm Financial Management: A Practical Guide for Small Law Firms]()
Introduction A successful law firm needs more than accurate accounts. Partners need to understand how quickly work is being converted into bills, how quickly those bills become cash, where money is becoming trapped and whether the firm has enough financial headroom to recruit, invest and grow. This is where financial management differs from bookkeeping. Bookkeeping…
![A Better Billing Process for Small Law Firms]()
For many small practices, the billing problem is not a shortage of work. It is the gap between completing the work and turning it into an accurate invoice that reaches the client. Time is recorded late. Draft bills wait for approval. Disbursements are missed. Completed matters remain in WIP longer than they should. A stronger…
![Why Profitable Law Firms Still Run Out of Cash]()
A law firm can be profitable on paper and still feel short of cash every month. That apparent contradiction is familiar to many Managing Partners. The firm is busy, fee earners are billing and the management accounts show a healthy profit. Yet salaries, tax, supplier payments and partner drawings still create pressure on the bank…
![SRA Accountant’s Reports: What COFAs Need to Know About the Proposed Changes]()
For many law firms, the annual accountant’s report has traditionally been a contained compliance exercise. Since a 2014 rule change, only qualified reports have needed to be submitted to the SRA — an unqualified report would generally remain on file rather than being sent to the regulator. That position is now changing, and it has…
![How to Build an Effective SRA Breach Register for Compliance]()
Mistakes can happen in even well-managed law firms. The real test is how quickly a firm identifies an issue, records it and prevents the same problem from happening again. A well-maintained SRA breach register gives the COFA and senior management a clear record of compliance failures. More importantly, it turns individual incidents into useful information…
![What is a Three-Way Reconciliation? A Guide for Law Firms]()
When a law firm holds client money, it needs to know that every pound recorded on individual matters can be reconciled back to the money actually held at the bank. That is the purpose of a three-way reconciliation. It is one of the fundamental financial controls within a law firm and a specific, named requirement…
![Law Firm Client Money and SRA Compliance: A Practical Guide]()
Introduction Managing client money is one of the most important financial responsibilities within a law firm. The challenge is that compliance does not depend on one reconciliation, one policy or one person. It depends on a connected system of controls covering how money is received, recorded, held, authorised, transferred, reviewed and ultimately returned or applied…
![What Happens If Your Three-Way Reconciliation Doesn’t Balance?]()
You’ve completed the reconciliation, but the numbers do not agree. The client bank statement shows one figure, while the cashbook or total client ledger balance shows another. It may be tempting to assume that the difference is a minor posting error and move on. That is precisely when the investigation should begin. When a three-way…
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