4 Keys to Managing Your Firm's Trust Accounting for Lawyers and Attorneys

as a lawyer you know how important trust accounting is to your business today we're going to cover the four necessities of managing your own trust accounting to get a better handle on how entrepreneurs running law firms can manage their own trust accounting we asked hoon accounting CFO Scott Rathbun what it takes to do your own accounting Scott gave four things entrepreneurs need to handle their own books here are the four things every attorney needs in order to manage their own trust accounting number one a disciplined approach to capturing activity as it occurs when you pay for something with a credit card what is done with a receipt every time you provide a service to a client how do you remember that activity so that it will be billed this process can be very simple keep a calendar take pictures with a smartphone but it needs to be consistent and organized and lead directly to the next process number two a bookkeeping system to process the above activity into most practice management software does not include bookkeeping a system is needed to track and report the financials of the company to assist with business decisions and growth and in this case with trust accounting this system can be very simple but it needs to have the basic components of financial reporting bank reconciliations income statement balance sheet accounts receivable and accounts payable if you use cleo practice management software you can use Xero cloud accounting software to integrate with your practice management tool and that is what we use here at accounting software we use Xero cloud accounting number three a disciplined approach to load and enter items into your system if you aren't quickly in religiously putting activity into your accounting system your books could be an accurate kit and when it comes to trust accounting this information has to be accurate this should be done daily or weekly at the absolute latest you need to know how these items are loading into your system a simple mistakes a recording a transfer into your practice management software not making the actual transfer from accounts or misrepresenting credit card transfers it could result in severe penalties or misappropriation of funds number four a strong understanding of trust accounting and borrower requirements at Kahuna accounting for example we promote education to our clients because the best financials and accurate books only take a business so far lawyers that understand their financials and can use them to grow the business are the ones that stand out from competitors and reach our goals for trust accounting you want to know specifics of trust accounting and how each state is different how each bar is different you want to know the common mistakes and pitfalls so you can avoid them so let's go ahead and recap and then we're gonna give you the next step a free guide it's completely free and doesn't even require a download so the four keys to managing your own trust accounting are number one a disciplined approach to capturing activity as it occurs number two a bookkeeping system to process that activity number three a disciplined approach to load and enter items into your system and number four a strong understanding of trust accounting and Bar requirements that leads us to the best next step for you to take after watching this and thank you for sticking with us we've created a totally free guide on how to create a system for your firms trust accounting now that you know the keys to be able to do your own trust accounting this guy can help you put a system in place it goes far more in-depth than this video so visit Kahuna accounting com backslash trust accounting for small law firms will also put a link for you in the video description below please do utilize this free resource we created this based on our experience working with hundreds of firms and if you do need help with your firm's bookkeeping you should definitely give Kahuna calm a visit we can help your firm and get the burden of accounting and bookkeeping off of your shoulders thank you again this has been Michael Luke ease with Cahoon accounting don't forget to read our free guide on putting a trust accounting system in place

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