Why You Should Hire a Bookkeeper for Your Financial Reporting

As a lawyer who owns your own firm, you make your money on billable hours—meaning any and all work you do that’s not for a client is unpaid. The only way for your law firm to make money is for you and your employees to work as many billable hours as possible.

Do you know how many hours you spend trying to make sure your books are kept up? Or is bookkeeping something you’re constantly struggling to make time for? Does getting your financial reports together cause headache and stress?

Paying someone else to handle financial reporting can actually make you money—the more you sub out the tasks that syphon a ton of time away from your practice, the more time you’ll be able to spend directly working and directly getting paid. 

Let’s unpack this a little more. 

What is Financial Reporting?

Financial reporting gives you the bird’s-eye view of where your business is. While monthly bookkeeping is essential, it is only one part of the story. These reports are made by taking the monthly bookkeeping records—which include how much money comes in, how much money goes out, and what it’s being spent on—and tells the broader story of your firm’s financial status. Think of the bookkeeping records as individual trees, and the financial report as the entire forest. 

Financial reporting gives you a snapshot of every aspect of your firm, and it’s a good idea to go over a thorough report every month. Here are a few of the key components you should have on your financial report:

Accounts Receivable

Accounts receivable are the funds you are expecting to come in throughout the month. This includes money for projects either under way or that will begin that month, and the amount expected to be paid for each.

Accounts Payable

Accounts payable tells you how much money is expected to go out of your firm that month. This includes payroll, business expenses, and utility bills. This part of the financial report states how much each of these are expected to be, so you have a clearer picture of your expenses for that month.

Status of Monthly Bills

Monthly bills are paid at different times throughout the month, so this aspect of financial reporting tells you which bills have already been paid and what bills have yet to be paid and how much each is expected to be. This is an important aspect of Accounts Payable.

Cash on Hand

Cash on hand takes the estimated amount of money going out that month and subtracts it from how much money should come in. This gives you an idea of how much money your firm should have on hand. This is your projected profit for the month.

Why is Financial Reporting Important?

Knowing exactly how much money is coming in and going out of your business is key for planning the future of your firm and setting goals for success. Planning your budget, hitting financial goals, hiring more employees...this all depends on accurate and regular financial reports that help you keep the big picture in view.

As the owner of a law firm, you need to know about all the ins and outs of your business. However, you don’t need to be the one tracking finances and composing reports. Your time needs to be spent primarily on billable hours so you can pay your employees and yourself.

Brennan Bookkeeping: Your Ideal Financial Reporter

Here at Brennan Bookkeeping, we carefully and efficiently track your finances, invoices, and payroll. We also send you monthly financial reports breaking down every detail of your firm’s financial status. 

We work with you to make the ideal budget for your law firm, then we put it into action. Every business has unique considerations and priorities, and we make sure yours are seen to. And with our customized package of monthly reports, you will always be involved in the fiscal health of your firm.

Our goal is to do our best work for you so you can do your best work for your clients. Contact us today and start optimizing your billable hours!