Should Law Firms Outsource Trust Accounting?
Legal process outsourcing has become a substantial cost-saving measure for law firms. Today, instead of hiring internal resources to take on specific legal tasks, experienced outsourcing companies have begun taking on these services. As a result, outsourcing can not only help lawyers get ahead but save them money in the process.
Yet, even with all these benefits, many law firms are still hesitant to take this jump and start outsourcing their back office. This is often because they are not sure what services they are allowed to outsource or how this process can help them in the long run. That is why, in this post, we will talk about one of the more critical tasks that many law firms have recently started outsourcing — trust accounting. We hope with the below information, you will have a better understanding of what this task actually involves and how Back Office Legal can take on this service and start helping you build a more profitable practice.
What is Trust Accounting?
Trust accounting is essentially the need to keep track of client funds and keep them away from the law firm’s operating funds.
Although, conceptually, the principle of trust accounting is relatively straightforward — keep money that is not yours in a separate account so that you do not spend it. In practice, however, it gets much more complicated, especially when attorneys deal with banks that are unclear on these rules or staff that are not as detail oriented as they should be when it comes to these essential accounts.
What to Look For When Outsourcing Law Firm Trust Accounting
While outsourcing can be a cost-effective and efficient solution, allowing you to delegate tasks that take up too much time, such as bookkeeping and accounting projects. It is important to find a company that has the experience and knowledge to take on these tasks and specializes in working with law firms.
You should also look for a company that is known to provide their clients with top-notch services and can help these firms with various back office issues and duties such as:
- Human resources services
- Reporting services
- Back office legal accounting services
- Trust accounting services
- Bookkeeping services
In addition, because accuracy in trust accounting is so vital, this outsource company needs to be detail-oriented and capable of reviewing client ledgers, deposits, and anything else in a trust account, while still ensuring these accounts are appropriately managed.
Benefits of Outsourcing Trust Accounting
As a law firm owner, it is up to you to ensure that all aspects of your firm are handled properly and that your accounts are up to date and accurate. Even a simple mistake with a trust account can lead to bar sanctions, bar complaints, and other consequences that can impact your livelihood and future.
Fortunately, when you work with an experienced outsourcing trust accounting company, you will no longer have to worry about these issues. For instance, when you outsource your trust accounting to Back Office Legal, you can rest assured that your records and finances will remain accurate and comprehensive.
In addition, when we take over your trust accounting needs, we can also:
- Reduce your overhead expenses by limiting salary costs and eliminating training expenses.
- Provide you with detailed records regarding your expenses and your income, which will allow you to keep track of your trust assets, taxes paid, and even disbursements to your beneficiaries.
- Set you up with experts that specialize in trust accounting so that you can work with professionals that can provide you with exceptional oversight of your trust accounts, and make sure that your processes meet statutory requirements.
- Organize your trust asset inventory and provide you with information regarding all of your accounts, invoices, and receipts.
Get the Help You Need with Your Trust Accounting
If you are considering outsourcing your trust accounting or would like further information regarding these services, contact Back Office Legal today and let our team show you how we can help you and your firm.
