Understanding how QuickBooks Online fits into your firm’s toolkit
Some mid-market law firms do not consider QuickBooks to be a financial software solution. But did you know that Intuit came out in 2019 with a new product: QuickBooks Online Advanced? It’s an enterprise solution for the mid-market. Paired with LeanLaw, it’s a home run for the mid-market law firm.
Here are some things to know about as you consider QuickBooks Online or QuickBooks Online Advanced for your law firm:
QuickBooks as a General Tool:
QuickBooks Online is not full-featured for all industries — Intuit relies on best of breed apps to fill in the gaps. If you think of QuickBooks Online as a platform, like iTunes, where you shop around for apps for the functions and features you need, you’ll have a new perspective that you can use to your advantage.
But Can QuickBooks Online Work for Larger Law Firms?
LeanLaw, a QuickBooks Online app, has clients that include law firms with 20+ lawyers. Although many law firms believe the myth that QuickBooks Online will not work for their law firms, LeanLaw finds this not to be the case. We’ve already addressed the Myth That QuickBooks Can’t Work for Attorneys, but let’s get into why larger law firms in particular have this conception. Following are some of the issues that have been brought up by these larger firms:
Reporting: Alone, QuickBooks might not be able to supply all the data needed by law firms to understand their profitability. With the addition of Fathom reporting in QuickBooks Advanced as well as forecasting apps, CRM apps, and specifically, LeanLaw, law firms can find insight on timekeeper details, client, attorney productivity, and where applicable, compensation. LeanLaw also facilitates reporting related to client origination, and firm share models. This is done in real time, showing what was billed and what was collected.
Trust Accounting: Although QuickBooks can accomplish trust accounting on its own, it’s a much more fluid workflow with LeanLaw. This is one of LeanLaw’s greatest features: our ability to simplify trust accounting into a few simple clicks. Your bookkeeper and accountant will love you: no more manual work, reconciling two sets of books. You are always in sync and reporting IOLTA trust accounts is in compliance.
Oversight: A comptroller for a larger law firm expressed concern that changes in the financial records might not be recorded in QuickBooks. She worried that someone could make a correction and she would not be alerted to the change. This is a misconception: each transaction in QuickBooks has an audit trail. You can also assign very specific user rights, ensuring the correct visibility and control over your staff access to the financials: eg, general partner, timekeeper, bookkeeper, etc. Some users will have access to all the data and others can be limited to data input. With LeanLaw’s real-time communication with QuickBooks Online, even users who don’t have access to QuickBooks Online can see live AR, Trust balances including specific transactional details.
Online vs. Desktop: All of the above information only works if you use the Online version of QuickBooks. Desktop does not work with LeanLaw or with many other apps. We see a near-future conversion to QuickBooks Online (from Desktop) as a must for any law firm that wants efficiency, accuracy and the lifestyle of a modern law firm.
The Law Stack:
The following apps have a focused expertise, thus the workflows and features tend to produce better results as compared to all-in-one apps such as law firm practice management software. With the right apps and the right support, QuickBooks Online becomes a finely-tuned machine for law firms — or any professional niche. We call our list of add-ons “The Law Stack.” (More on that in another post.)
Imagine a law stack including: LeanLaw for the timekeeping/billing/reporting. Collbox for debt collections, Invoice Sherpa or Chaser for accounts receivable management, Hubdoc for financial document collection and storage, Expensify or Bill.com for receipt tracking and expense management, and QuickBooks Payments (CC and ACH) to expedite invoice delivery and payments. And so on.
Niche Into Law:
QuickBooks ProAdvisors have the opportunity to advise their law firm Desktop clients to migrate: the short term pain is well worth the investment: Reduced IT, an abundance of tools to meet specific compliance requirements, any time / anywhere access, and real-time data access and transparency to your team. This is an investment that will pay dividends down the road. Modernizing the most important workflow of the law firm, how it gets paid, and how it delves into its data is crucial to longevity and profitability.