Trusted by Legal Professionals Since 1983

CPA Firm Serving PA, NJ, NY, & DE

Law Firm Accounting Services in Montgomery County

Law firms have special needs when it comes to accounting. At SD Associates, P.C., we understand that legal accounting requires a unique combination of tax and financial knowledge, technical proficiency, and understanding of the ever-changing regulations in the legal industry. We have the resources and expertise to provide law firm accounting services in Montgomery County that meet these requirements.

Whether your firm requires complex tax planning, business structuring, or support, SD Associates can help you navigate the complexities of legal accounting. Our staff includes experienced CPAs and accountants with a deep understanding of the legal industry who are dedicated to helping you protect your financial interests. We offer a wide range of services including bookkeeping, tax preparation, financial planning, audit and assurance services, and more. Our goal is to create an environment that promotes trust and confidence between you and your legal accountant – one that ensures you receive the best advice and support for all of your accounting needs.

Common Legal Accounting Mistakes

Mishandling trust accounts: A common practice amongst law firms, trust accounts are essential to the success of legal accounting. It’s important to ensure that all transactions in and out of these accounts are handled correctly, as mistakes can lead to financial losses and create compliance issues with local regulators.

Failing to keep accurate records: Every legal firm should keep accurate records of all financial transactions, whether it’s creating invoices for clients, tracking payments and receipts, or generating reports for audits. Without these records, it may be difficult to make important decisions about your firm’s finances.

Not being aware of applicable laws: It’s essential that legal accountants stay abreast of applicable laws to ensure the firm’s financial operations are compliant. This includes both federal and local regulations specific to legal accounting, such as client trust rules, taxation information, and fee splitting requirements.

Incorrectly identifying income as revenue and vice versa: Understanding the difference between income and revenue is vital to legal accounting. Revenue is the total amount of money a business collects before taking any expenses into account. Income, on the other hand, is the amount of money a business makes after subtracting all of its business expenses. Mixing up these two concepts can lead to inaccurate budgeting and financial decisions being made.

Entering data incorrectly: Entering data incorrectly is one of the most common mistakes in legal accounting. This can lead to incorrect financial statements, inaccurate billing and invoicing,  and other costly errors. It’s important to double check all data entry before finalizing any documents or reports.

Avoiding professional assistance: Legal accounting can be a complicated and time-consuming task. If your firm doesn’t have the capability to handle these responsibilities in-house, then it’s important to turn to professional legal accountants such as SD Associates, P.C., who are knowledgeable in all aspects of financial management for law firms.

Trust Accounting

Trust accounting is a practice that attorneys, accountants, and other fiduciaries use to manage client funds. Trusts may include funds received from clients, settlements, or other sources and are typically held in a separate bank account. At SD Associates, P.C., our experienced legal accountant team can help you manage your trust accounts with ease.

We understand the importance of accuracy and transparency when dealing with client funds, which is why we ensure that all trust accounting practices are compliant with applicable laws and regulations. We can provide detailed records of transactions, reconcile accounts on a monthly basis, and review journal entries to ensure accuracy.

IOLTA Account Management

An IOLTA (Interest on Lawyers’ Trust Accounts) is a type of account that attorneys use to separate client funds from firm operating funds. SD Associates, P.C. law firm accounting services in Montgomery County specializes in IOLTA account management services to ensure compliance and relevant state bar standards.

Our experienced staff can help you establish an IOLTA, manage it on a daily basis, reconcile all accounts regularly, and provide timely reports. Additionally, SD Associates, P.C. can provide assistance with trust account audits and reviews as needed to ensure all accounts meet the necessary compliance standards.

Legal Bookkeeping Solutions

Bookkeeping is an integral part of the legal profession, and SD Associates, P.C. is a trusted resource for bookkeeping services for law firms in Montgomery County. Our accountants have extensive knowledge in accounting principles and are dedicated to providing our clients with accurate results that meet their unique needs.

From basic bookkeeping tasks such as tracking invoices, bills, and payroll to more complex financial operations such as budgeting, forecasting, and risk management, SD Associates, P.C. can provide comprehensive bookkeeping solutions that will enable you to stay on top of your finances and make sound decisions for your business.

Legal Accounting FAQs

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

Yes, the legal structure of your law firm has a significant impact on your taxes. For example, if you are operating an LLC or partnership, you may be liable for self-employment tax and pass-through taxation. Conversely, if you have chosen to incorporate as a C corporation, there may be double taxation involved at both the corporate and individual level. Our legal accountants at SD Associates, P.C. can help you analyze the tax implications of your law firm’s structure and make educated decisions about the best options for your business.

 

What should I do if I am being audited?

An audit doesn’t have to be a stressful experience. If you are selected for an audit, the best thing to do is stay calm and contact our legal accountants at SD Associates, P.C. immediately. We can help you navigate the complexities of an IRS or state audit by providing reliable advice throughout the process and making sure that all paperwork is accurate and filed correctly. Our experienced staff can also help you understand the outcome of your audit and what steps to take should additional measures need to be taken.

 

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 recommended as the accounting standard for most law firms. SD Associates, P.C. can help you understand and comply with GAAP to ensure your books are accurate and up to date. We also offer tax compliance services to make sure that your business remains in good standing with the Internal Revenue Service and other state agencies.

Contact Us for Law Firm Accounting Services in Montgomery County Today

SD Associates, P.C. is your CPA firm of choice. Are you still searching for law firm accounting services in Montgomery County? Just read some of our amazing Google reviews! Our Montgomery County legal accountants can provide you with personalized advice and help you make well-informed decisions about your business finances. Contact us today at (215) 517-5600 to learn more about our services and get started on the path to financial success.