Accounting Services Trusted by Top Law Firms

CPA Firm Serving PA, NJ, NY, & DE

Legal Accountant in Philadelphia

SD Associates, P.C. is dedicated to providing legal clients with the highest quality service and expertise. Our CPA firm specializes in tax planning, accounting services, and more for law firms. We take pride in our ability to provide personalized attention to each client’s unique financial needs while utilizing our vast experience and knowledge to ensure the best financial solutions. Our legal accountant in Philadelphia is committed to providing the highest level of service and advice to our clients, with a focus on understanding their goals and objectives.

Common Legal Accounting Mistakes

Mishandling trust accounts: Trust accounts are a critical part of legal accounting and must be handled exceptionally well. Mismanaging or mishandling trust accounts can lead to serious consequences for the attorney, including sanctions from professional licensing boards.

Failing to keep detailed records: The legal field has stringent recordkeeping requirements that need to be adhered to in order for attorneys to remain compliant. Failure to properly document transactions can lead to costly penalties or, worse yet, criminal charges.

Not being aware of applicable laws: Every state has its own set of laws and regulations concerning legal accounting. It is critical that attorneys familiarize themselves with the statutes in the state in which they practice so as not to violate any requirements associated with the practice of law.

Incorrectly identifying income as revenue and vice versa: The terms ‘income’ and ‘revenue’ are often confused, leading to confusion in the accounting arena. It is important for lawyers to understand the difference between these two terms when dealing with legal accounting.

Entering data incorrectly: Even small errors in data entry can lead to serious mistakes when it comes to legal accounting. It is important that attorneys pay careful attention to all transactions so that any irregularities or inaccuracies are caught quickly and rectified.

Eschewing professional help: Experienced legal accountants are able to provide invaluable guidance and assistance in the complex world of legal accounting. Attorneys who fail to take advantage of professional help when necessary may find themselves in a difficult situation as they may not be aware of important laws or regulations that could have been avoided with the right advice.

Trust Accounting

Trust accounting is a common practice amongst law firms and accountants to keep client funds secure and separate from the firm’s operating accounts. Examples of these funds can include settlement funds, court fees, advanced costs, and fees paid as retainer. It is critical to properly handle trust accounts, as they prevent commingling of client funds with business funds. Improper handling can lead to financial mismanagement and a lack of accountability.

At SD Associates, P.C., we understand the importance of trust accounting and view it as an important cornerstone of legal accounting. Our team of professionals is highly trained in proper trust accounting procedures and ensures that all funds are handled with the utmost care and professionalism. We strive to ensure transparency in all transactions and provide clear reporting of client accounts.

IOLTA Account Management

An IOLTA (Interest on Lawyers’ Trust Accounts) is a special trust account used by lawyers to hold their clients’ funds. It is important for firms handling IOLTA accounts to maintain proper oversight of the accounts, as well as ensure compliance with state regulations.

At SD Associates, P.C., we offer comprehensive IOLTA account management services for law firms. Our experienced team of legal accountants can help you manage your trust accounts so that you remain compliant with all applicable state laws and regulations, minimize risk, and maximize profitability. We provide detailed reporting that allows you to keep a close eye on all your trust accounts, manage financial resources effectively, and make informed decisions.

Legal Bookkeeping

Keeping organized, comprehensive records is an essential task for any business  – for law firms, it’s even more important. SD Associates, P.C. offers comprehensive legal bookkeeping services for private businesses and organizations that need help managing their accounting needs. Our team of experienced professionals will ensure all transactions are accurately recorded and reported to the appropriate parties as required by law. We take pride in our high-quality service and guarantee satisfaction on every project we undertake. With our legal bookkeeping services, you can rest assured that your finances are in the hands of knowledgeable professionals.

Legal Accounting FAQs

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

SD Associates, P.C. is well-versed in the various tax implications associated with different legal structures and can help you to choose the one that best suits your needs. For example, if you are operating as a sole proprietorship or partnership, the business income and expenses will be reported on your personal tax return. On the other hand, if you are operating as a corporation or LLC, you may need to file separate company and personal tax returns. In any case, SD Associates, P.C. can provide invaluable assistance in understanding how the legal structure of your law firm impacts its taxes.

 

What should I do if I am being audited?

Being audited can be a stressful and overwhelming experience. At SD Associates, P.C., we are committed to helping you navigate the audit process with ease and confidence. We understand that an IRS audit is highly complex and can involve meticulous scrutiny of financial records. Your Philadelphia legal accountant will help you prepare your documentation, review the audit results, and offer sound advice.

 

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 strongly recommended for law firms in order to provide a clear and accurate picture of their financial performance. SD Associates, P.C. can help you understand the GAAP standards that apply to your law firm.

Contact Our Legal Accountant in Philadelphia Today

Trustworthy legal accounting is essential for the success of any law firm. At SD Associates, P.C., our Philadelphia legal accountant offers services that are tailored to meet each client’s individual needs. Contact us today at (215) 517-5600 to learn more about how our experienced team can help you manage your finances effectively and keep your business on track.