CPA Firm Serving PA, NJ, NY, & DE

Legal Accountant in Philadelphia

At SD Associates, P.C, we have a team of skilled accounting professionals who offer full-service legal accounting in Philadelphia. Our firm is dedicated to providing services that cater to your unique needs and preferences. We specialize in various areas, such as tax planning and preparation, financial statements, and consultation services. Our commitment to quality service ensures that we exceed our clients’ expectations.

SD Associates, P.C is a trusted provider of top-notch financial management support and guidance to law firms. Our expertise extends to individuals in need of tax assistance, corporations requiring financial statement filing, and law firms seeking accounting assistance. You can rely on our unwavering commitment to delivering the highest level of service.

Common Legal Accounting Mistakes

Mishandling trust accounts: The management of trust accounts is a critical component of legal accounting. Failure to do so can lead to significant consequences, including heavy fines.

Failing to keep detailed records: In legal accounting, maintaining proper documentation is imperative. Neglecting to document transactions, accurately categorize expenses, and maintain current records can result in substantial compliance issues.

Not being aware of applicable laws: Every state has its own set of legal accounting rules and regulations. Attorneys must be familiar with the legislation of the state in which they practice.

Incorrectly identifying income as revenue and vice versa: The phrases ‘income’ and ‘revenue’ are frequently used interchangeably, which causes misunderstanding. When dealing with legal accounting, it is critical for attorneys to know the distinction between these concepts.

Entering data incorrectly: Even minor errors in data input can have significant consequences in legal accounting. Attorneys must exercise utmost care when reviewing transactions to identify any errors.

Avoiding professional assistance: Accountants with expertise in the complex field of legal accounting can provide invaluable guidance. Attorneys who fail to seek expert support may be subject to penalties if they are unaware of critical rules or regulations.

Trust Accounting

Trust accounting is a common practice used by law firms to keep client funds separate from the firm’s operating finances. These funds include settlement monies, court fees, advanced charges, and retainer fees. Proper management of trust accounts is crucial to avoid commingling of client and corporate cash. Mishandling of funds can lead to financial mismanagement and a lack of accountability.

At SD Associates, P.C., we understand the importance of trust accounting services. We offer comprehensive solutions to ensure that account activity is handled according to industry best practices. Our team has years of experience providing reliable guidance, and we take great care in recording all transactions.

IOLTA Account Management

An IOLTA (Interest on Lawyers’ Trust Accounts) account is a unique financial tool specifically designed for attorneys. They are used to keep trust funds separate from operating funds, allowing attorneys to manage money that is received on behalf of clients.

SD Associates, P.C. provides full IOLTA account management services to law firms of various sizes in Philadelphia. Our Philadelphia legal accountants can assist you in establishing, overseeing, and managing your IOLTA accounts. We adhere to the highest ethical standards, and our comprehensive reports detail the activities in each client’s IOLTA account.

Legal Bookkeeping and Accounting Solutions

SD Associates, P.C. offers complete bookkeeping and accounting solutions to legal firms. Our team of proficient experts has a wealth of experience in financial record-keeping, cash flow projections, report generation, and client payment collection. We recognize that legal organizations have distinct requirements that necessitate specialized care. That’s why we take the time to comprehend each client’s operations and tailor our services to meet their specific needs.

Legal Accounting FAQs

Does the legal structure of my law firm have an impact on my taxes?

Depending on the legal structure of your law firm, there may be different tax requirements. For example, a partnership, limited partnership or LLC may be subject to different tax requirements than a sole proprietorship. Our Philadelphia legal accountant can help you understand how your firm’s legal structure affects your taxes and provide advice on the most beneficial taxation options for your specific situation.

What should I do if I am being audited?

If you are being audited, it is important to seek professional advice from a qualified legal accountant. We can provide comprehensive assistance with resolving tax compliance issues, including an audit. We have extensive experience in dealing with IRS and state agencies and can help ensure that the process goes as smoothly as possible.

Does GAAP apply to law firms?

Privately-held companies are not required to disclose their financial information. However, adhering to GAAP (Generally Accepted Accounting Principles) is generally recommended in order to maintain accurate and consistent financial information. Our team at SD Associates, P.C., can provide guidance on how to apply GAAP principles to your law firm’s accounting system.

Contact Our Legal Accountant in Philadelphia Today

At SD Associates, P.C., we understand the significance of your law firm’s finances and the requirement for expert handling. Our skilled legal accountant in Philadelphia can provide extensive support and recommendations for the management of your trust accounts, taxes, bookkeeping, and other accounting needs. Please call us at (215) 517-5600 to schedule a consultation and learn more about our legal accounting services.