Lawyers can’t afford to lose on client cost advances
I was recently engaged to help a personal injury law firm clean up their books. The first thing we did was setup QuickBooks Online and transfer their desktop file. That way we were both looking at the same set of books. Next we reconciled the last six months of bank statements in QuickBooks. Then we setup up simple transaction report to show all disbursements for client cost with the associated client file in one column. This one action saved the firm $5,000.
By performing the above procedure for the last three months, we highlighted 6 checks that were written for client costs that were not associated to a client. When these cases were ready to be settled these client advances would have been missed. The six checks totaled $5,000. We also ran the report for the prior years. We found 4 checks totaling $3,000 that were not associated with a client file. The cases had been settled and all funds disbursed. That $3,000 was lost. In addition we found more checks in prior years totaling almost $15,000 that we were able to identify and code correctly so we could recoup the money on settlement.
The next step we took in QuickBooks Online we set up the same report to show the client costs transaction for the prior week. We then set up an email schedule in QuickBooks Online so the managing lawyer and the bookkeeper received the client cost by client report each Monday morning. This simple report will insure that the problem would not occur again.
This is one of the basic procedures in our system.
Using the email notification system inside QuickBooks Online is a great feature to allow the lawyer to focus on what’s important and automatically receive the information they need so they can focus on marketing and settling cases