Take Xero and Clio Manage, the integration lets your firm automatically connect your client invoices and expenses from your practice management software to your accounting software—streamlining the process. Law firm accounting software is a specialized accounting software designed to meet the unique needs of law firms. It can manage financial transactions, track billable hours, generate invoices, and provide reports on a law firm’s financial health. Clio is an excellent option for law firms seeking quick and efficient communication tools—its built-in text messaging feature allows you to communicate quickly with your clients and team members. You can also integrate the software with some of your favorite business management tools, and you can process unlimited documents in any Clio plan.
If clients aren’t being billed properly for your attorney’s time, the firm will lose money. Tabs3 is part of the Tabs3 / PracticeMaster suite of law firm software. Tabs3 provides essential “back-office” functionality including time, billing and accounting; PracticeMaster provides powerful “front-office” capabilities including client and matter management. While QuickBooks Online is extremely customizable, it has no legal-specific features that law firms need, such as trust accounting, legal billing, and legal-specific reports. This is why we recommend adding a LeanLaw integration, which is ideal for law firms with up to 30 attorneys. QuickBooks, PCLaw, Tabs3, Juris, ProLaw, LEAP, CosmoLex, and Centerbase are valuable tools, each offering diverse features and customization options.
Although user-friendly, there is a learning curve, particularly for users unfamiliar with accounting principles. The best accounting software for law firms right now is FreshBooks and Zoho Books. Even solo practitioners and small firms have to track and allocate hours to clients, account for retainers and manage a variety of rates and billing options. The most advanced accounting solution is worth next to nothing if it’s not convenient to use.
What Clients Say
You can enter trust records once in Clio, and that data automatically syncs with QuickBooks Online. On the downside, CosmoLex doesn’t have ample integration with third-party tools, which can be an issue if you’re using multiple software in your practice. For instance, you might need to look for an alternative if you want a solution with integrated CRM tools and client intake forms.
Legal billing is complex compared with billing in other small businesses. Legal billing structures are unique, and lawyers are subject to strict ethics and accounting regulations. Dedicated legal billing software can help your firm manage time tracking and invoicing more efficiently than general bookkeeping and invoicing software might allow. Absolutely, most law firm accounting software is designed to manage trust accounts meticulously, ensuring compliance with legal standards. No matter how big or small your law firm is, accurate, timely payroll is essential—but it can be time-consuming to complete manually.
- While the chart of accounts is customized to your law firm’s size, jurisdiction, and practice area, it typically includes five core categories in addition to numerous subcategories.
- (Some law firms try anyway, or worse yet, use an Excel spreadsheet to manage trust accounts).
- You can try it free for 30 days with no strings attached and no credit card number required.
- Cloud-based accounting software providers prioritize data security, employing advanced encryption and security protocols to protect sensitive information.
- This helps you in customizing the software according to your firm’s needs.
4.4 out of 5 stars based on user reviews collected by G2Crowd as of Spring 2022. Dennis was named an Ernst & Young Entrepreneur of the Year Finalist, and Uptime Legal has ranked among the Inc. 5000 list of fastest-growing private companies in America for the past eight consecutive years. Uptime Legal continues to innovate and disrupt the legal tech industry. Under Dennis’ leadership, Uptime Legal has grown organically and through acquisitions to become the nationally-recognized legal technology company it is today. Book some time for a consultation, and our support staff is happy to give advise you in the best direction to go. But they do not provide the “rest of accounting,” and instead integrate with applications like QuickBooks to complete the picture.
Sidebar: Legal Document Management
Whether you should take payments via payment apps, such as PayPal or Venmo, depends on whether clients are paying for earned fees or retainers. You’re required by law to place retainer fees in a trust account, which these apps don’t do. Clio lets you track and invoice for billable hours and expenses and get paid with a secure online payment link sales invoice for credit card, debit or eCheck payments. You can set up invoices to discount for early payments or add interest for late payments automatically. AbacusNext offers software solutions for firms of all sizes, but it’s the best one on this list for large, complex firms that could benefit from its Private Cloud and integrated accounting features.
Make sure when looking at attorney accounting software to not only look at the list of features but to actually see and demo them in action. Manually preparing invoices and following up on payments is time-consuming, inefficient, and sometimes detrimental to healthy client relationships. Features like automated accounts receivable management and invoicing take the stress out of billing.
Comprehensive reporting tools give you an accurate view of client deposits, transactions, and other expenses in real-time. This not only simplifies deposit reconciliation but gives you a strategic way to evaluate your budgets, cash flow, and financial forecasts. One thing that makes evaluating accounting solutions so tricky is that there is an abundance of software that classify themselves as “legal accounting software”. Added to that, many of these solutions have similar functionality, at least on paper. Firstly, many common, industry-agnostic accounting solutions seem perfectly fine for use in an attorney’s office because they feature legal use cases on their websites or sales material. However, that software is frequently not purpose-built to integrate with legal processes or follow financial rules set by state bar associations.
What to look for in a legal bookkeeper
Trust accounting is more specific to the legal industry; therefore, generic accounting options don’t usually offer these features. Legal accounting software helps law firms track time, bill clients, manage schedules and monitor business performance with financial reports. Accounting software options that are specific to law offices will ensure confidential client information is stored properly and complies with data security laws. QuickBooks Online is a useful accounting software for lawyers on its own. But its advantages multiply when you pair it with legal practice management software.
Accounting Software vs. Practice Management Software (The Differences and the Overlap)
With the accrual method, you record revenue when it’s earned and expenses when they’re incurred—whether they’re paid right away or not. This creates a better matching of costs to the revenues earned in a given month or year. It allows for more meaningful financial management that isn’t influenced by the ups and downs of cash flow.
Client information syncs securely and easily
Double entry accounting is a helpful practice for lawyers to know about, as it provides an extra guard against errors. Remember that the right accounting software should meet your current needs and be flexible and scalable enough to grow with your firm. It should be an investment that boosts your firm’s productivity, streamlines its operations, and ultimately contributes to its success. While PCLaw has received a rating of 2.5 out of 5 in customer experience and support, indicating room for improvement in user satisfaction and the level of support offered, the security aspect is rated 5/5. The software is considered slightly outdated, more so considering its tendency to crash and freeze, particularly with multiple users accessing it simultaneously.
Final thoughts on QuickBooks for Lawyers and Clio
For instance, you can integrate QuickBooks Online with LeanLaw to develop a powerful legal billing and accounting solution. CARET Legal (formerly Zola Suite) is a good fit for legal professionals seeking a legal accounting software with strong CRM features. It is also a great fit for firms handling a large volume of documents every day, especially if you’re using Office 365 or Google Workspace. As a fully customizable legal accounting software platform, QuickBooks lets you manage retainers based on your state’s specific IOTLA programs rules. When selecting accounting software, consider the learning curve involved, the level of customer support provided, and the ongoing cost.
For tips on data security for law firms and how to vet potential providers of cloud-based services for security, read our law firm security guide. Yes, most versions of QuickBooks Online let you create unique user IDs and customize access levels for anyone on your team so they can work in your legal accounting software with their own login. When it comes to accounting for law firms, whether you handle it yourself or hire someone, your bookkeeping system must maintain a consistent schedule for carrying out bookkeeping tasks. Just as your clients rely on your expertise with the law, there comes a point when you need to call in accounting professionals.
See how one law firm uses LexWorkplace to organize their documents and streamline their practice. In addition, your firm may need to supplement your other legal software with a dedicated Document Management System to securely manage firm documents and email. If you’re contemplating adopting accounting software for your firm, you may consider alternatives to QuickBooks Online. With the integration, it’s easy to sync financial information and print checks securely.