As a small law firm, you might feel like you can do it all. However, one thing you shouldn’t try to do by yourself is accounting. As easy as it might seem to handle the nuances of your accounting on your own, this could position you for a lot of problems, and possibly even major tax burdens down the road.
If you’re waffling on whether to work with a professional accountant, here are some great reasons why it’s worth the expense.
One of the most important reasons you need a professional accountant providing oversight to your law practice is the question of taxes. Having someone knowledgeable to do your taxes is crucial because mistakes can cost you money in fees and penalties or even get you into legal trouble with the IRS. Experienced accountants can make sure that your debt to the IRS is properly satisfied each period and also help you save money by finding opportunities for deductions you may have missed.
A business accountant will know about payroll requirements and help to make sure you follow the federal, state, and local laws. Although they’re (usually) not lawyers, accountants can guide you on the right path so you pay your employees on time and never get in trouble with the IRS. An experienced business accountant can also help you anticipate future issues with payroll and correct them quickly.
Keeping track of your accounts and the ongoing transactions in your business should be a natural part of your process, but organizing and analyzing these files should be the work of a trained accountant and tax professional. An accountant can show you better ways to organize your files and can look for patterns that reveal key information about your business operations.
With the best invoicing software, you and your accountant can automatically generate and send invoices. This means that your clients will get their invoices faster, which can help to improve your cash flow. In addition, invoicing software can help you keep track of payments and identify any late-paying clients.
No matter how diligent you are at keeping track of your business’s finances, there’s always a chance you could make an error that ends up costing you. It’s important to have an accountant review your books, no matter how confident you are. They’re trained to spot errors, inconsistencies, fraud and theft.
A good accountant can help you to plan for the future. Assessing your current cash flow and helping you to choose a beneficial course of action is an indispensable service. You might also not perceive certain flaws in your business model until your accountant points them out to you.
Avoiding Financial Pitfalls
Your new law firm will benefit from a professional accountant working on your behalf. Consider how a professional can help you avoid potential mistakes that can cost you money such as incorrect filing. With the help of an accounting professional, you can spend more time with your clients and marketing your law practice.