QuickBooks Desktop Enterprise is a flexible software application that can be customized and used by many industries. QuickBooks also provides some industry-specific editions such as QuickBooks Desktop Enterprise for contractors, manufacturers, non-profit organizations, and retailers. For example, the contractor-specific edition provides options to generate customizable reports, record bids, estimates, job costing, work orders, and other options, which are specific to the construction industry. By building these editions, QuickBooks has designed unique and successful recipes for these industries.
However, legal work is administered by unique billing needs, confidentiality clauses, and complex accounting protocols. As QuickBooks does not have a customized edition for legal firms, it is required to customize a specific solution, per your requirements. This activity will pose many challenges. However, with strategic planning, you can chart out the workflows and use the already-available options in QuickBooks enterprise hosting to cater to your law firm.
Ensure that you are cautious while setting up billing and accounting details. QuickBooks experts can provide their guidance, wherever applicable and help you set it up, appropriately. Please check the terms and conditions or contact support to be aware of the level of guidance and support that you can expect from the expert team.
The ingredients that make up successful recipes for your legal firms include:
• QuickBooks Enterprise
• Client information
• Case details – like Case number, case hearing dates, documents relevant to the case
• Payment information
• Name of the attorney to whom the case is assigned
Although the ingredients might vary depending on the case, let’s consider the above-mentioned sample ingredients.
With these ingredients, you can create multiple recipes, like client reports, case file, advance, expenses, and the income summary, and so on which ultimately piles up to form a platter of dishes to celebrate your success in a legal case. However, it is required to set up your QuickBooks Enterprise appropriately to ensure that you can create your successful recipes.
Setting up QuickBooks
• Creating the appropriate Company File.
• Entering your client information and the case details is crucial. You can provide options to integrate your case files using Microsoft Word.
• You can assign the required attorney to a case. Attorneys in a law firm would be their employees. This is similar to assigning a task to an employee.
• Payment information is a challenging task and requires customizing as per your requirements.
As legal practitioners, you will have some challenges with respect to the payment information that needs to be captured.
Let us look at these challenges:
o When a client approaches you with a case, they might pay an advance fee. This advance fee must be captured in QuickBooks as a separate item. You must give receipts to the advance payments.
o When it is a legal firm, only a certain amount would go to the attorney as part of his legal fee.
o Eventually, parts of these advance payments will be converted to earned incomes as the attorneys render their services.
o Additionally, the attorney must keep track of all the expenses incurred towards the case and capture it appropriately.
So, it’s important to keep a track of every client’s advance amount and periodically record, earned income, incurred expenses, and to whom should it be paid. Therefore, ensure you have separate items or options to capture all this information.
Tracking the expenses and transferring the funds from the advance account to the income account is a crucial and very important activity. Legal firms need to customize their QuickBooks and make it mandatory to capture all this appropriately so that their bookkeeping records are not affected.
Note: Legal requirements vary from place to place. Ensure that you review the local legal requirements specific to your location before you set up QuickBooks for your legal firm.