PCLAW Law Firm Management Resolutions

-By Steven J. Best

Best is a principal of Affinity Consulting Group. He is regular presenter at ABA TECHSHOW and is Vice Chair of the 2015 Expo and Conference. Best is also author of The Lawyer’s Guide to PCLaw (ABA LPD Publishing, 2015). He originally posted a version of these resolutions for law firms managing their practices with PCLaw on his LegalTech Blog.

Attendees of ABA TECHSHOW will be able to Meet the Author on Thursday, April 16, from 11:45 AM-12:30 PM.

RESOLUTION # 1 – Keep your bank accounts concurrently reconciled
Nothing is a better indicator of an issue with your general bank, trust bank, or general ledger (GL) than problems found when reconciling your bank accounts. We recommend that you keep your accounts reconciled and up to date. This doesn’t necessarily mean that you close your accounting months contemporaneously with your bank reconciliation(s). Just know that keeping your account reconciliations as current as possible will only help you as you move through the next calendar year (as error free as possible) as bank reconciliations usually catch GL and bank journal errors right away.

RESOLUTION # 2 – Stop Making Journal Entries to Control Accounts (that means both you AND your C.P.A. too)
Because PCLaw is a “one-write” software system (i.e, entry of data into one portion of the program may affect data tables in other parts of the program – such as a general receive payment – which affects your cash balance, your bank journals, your billing tables and your client ledgers), making journal entries to what are known as control accounts (such as the general bank) is a dangerous practice. In certain circumstances, you SHOULD make a journal entry to a control account, but you should do so cautiously and only under specific circumstances. To review which GL accounts are control accounts, simply review (version 11 and higher of PCLaw) OPTIONS: LISTS: GL ACCOUNTS and select tree/list view). There is a control account identification column reference to each GL account in the list. With rare exception, you should always make adjustments to your control account balances with receipts, checks and the change/write-off bill function only.

RESOLUTION # 3 – Close your months and years
Many PCLaw users fear closing a month or year because, in doing so, you lock out changes to your general ledger and, in some instances, you can’t edit expenses on invoices. However, this is a fallacy. The developers have given us plenty of methods to correct expense entries on invoices, even after a month is closed. And, by closing your months and years, you keep your accounting reports current, you are able to archive matters that are truly “zeroed” out in closed months, and you prevent your non-accounting users from making changes to your reconciled, reviewed and approved GL balances. Further, as you close months and years, reports typically run faster and more accurately as well. Under normal circumstances, this writer will recommend keeping 2-4 prior months open (except at this time of year, you may wish to close the 2014 fiscal year by running END OF YEAR, after your taxes are filed by your CPA)…and that may mean April 2015 or later.

RESOLUTION #4 – Stop processing payroll in-house and subscribe to a payroll service
In-house payroll is fine under limited circumstances, but for the most part, you are busy and you don’t need to bear the ever-increasing and ever-changing burden of payroll. Payroll services are experts in ensuring that your payroll is on time, correct and current. Payroll services typically send you an email reminding you when it’s time to process payroll, calculate wages and deductions, deposit and file federal, state and local payroll taxes — with guaranteed timeliness and accuracy, can pay your employees by direct deposit (or paycheck, if you prefer) and notify them of payment by email, provide employees 24/7 online access to their paystubs. Further, these services normally provide W-2’s, and other payroll information, provide you and your accountant 24/7 online access to payroll reports, provide you customized labor law posters and other resources to help keep you in compliance, work with the IRS and other tax agencies on your behalf, if ever needed. The price of the services is practically nominal if you compare it to the cost of your time and effort maintaining and performing payroll responsibilities in-house.

RESOLUTION # 5 – Review the GL Reconciliation Report MONTHLY
Many PCLaw users have never run the GL Reconciliation Report (REPORTS: GL RECONCILIATION). This report is probably the most comprehensive report to help you ensure that your client ledger, billing and bank journals and the general ledger are in balance with one another. If you find a discrepancy, you can immediately begin to review your monthly transactions to find the entry that is causing your information to be out of balance. The longer you wait when you see a discrepancy, often times the hard it is to repair it. The more data that has to be analyzed, the more time-consuming it is. Running the GL Reconciliation Report monthly not only gives you peace of mind knowing that your accounts are in complete balance, but also allows you to fix problems quickly when you see an imbalance.

RESOLUTION # 6 – Review productivity reports monthly and review them with the partners
We also recommend taking a look at, and proactively reviewing, advanced productivity reports such as the Fee Allocation Summary, the Daily Time Summary, the Client WIP Billing and Collection Summary and the Productivity by Client reports. Further, it is possible to design reports to pull data out of the database in such a way that you can avoid taking PCLaw data and keying same into Excel spreadsheets.

RESOLUTION # 7 – Review the Cash Flow Planner at least once per week
It’s not just important to know HOW MUCH cash you have in the bank, but it is equally and possibly more important to know your aged receivable balances, aged payable balances, work in process balances, cash received and cash paid out. All of this is readily available on the cash flow planner report. (REPORTS|CASH FLOW PLANNER).

RESOLUTION # 8 – Consider PCLaw Credit Card processing
Credit card processing from Open Edge (formerly Payment Processing Inc.) (www.paypros.com) works directly from the PCLaw receipt screens (Trust, General Retainer, Payments and Quick Bill). One entry updates all relevant information, including the client ledger, bank journals, reports and general ledger. And, it all happens securely, over the internet and your bank account is updated too with an electronic deposit. Finally, there are no machines, paper rolls, ink or batch processing responsibilities.

RESOLUTION # 9 – Save a tree and start e-mailing your bills in PDF format
PCLaw version 14 has vastly improved the ability to email your bills to your clients. And, since you’re emailing a PDF, you can design your bill templates to optimize them for PDF printing (including color, cool fonts and logos). Of course, be sure and select PDF as the output type when designing your updated bill template. Then, if you fill out the recipient’s email address in the “EMAIL1″ field in the matter manager and then turn on “Use Invoice E-Mail Queue” in System Settings (billing tab). When you restart PCLaw, you can update your matters to always send bills by e-mail, always send bills to the printer, or both. Not only will you save printer, toner and paper expenses, but your bills will be received faster. And, if you begin to use PCLaw’s internal credit card processing feature (see tip #8 above), clients can call, fax or email in credit card information for you to immediately run their card and receive payments all that much faster.

RESOLUTION #10 – Keep Time Contemporaneously

I’d be remiss for skipping this exceptional piece of advice advocated by just about every practice management consultant and time/billing expert that I know. Get your team together and create a policy in the firm requiring EVERYONE to enter his/her billable time before the end of each work day. Recreating time at the end of the month is like throwing cash out the window; you simply won’t be able to recall everything you did from weeks or even days before.

Let’s put real numbers behind this. Let’s say you bill at $200 an hour (if you bill at a higher rate…the numbers I’m about to share with you are much greater), and you neglect to track a quarter-hour per day (just 15 minutes…perhaps 1-2 phone calls or emails). Your firm then loses $50.00 per day, $250 per week, $1075 per month, and $12,900 per year PER TIMEKEEPER! A ten timekeeper law firm could be missing out on more than $129,000 per year in revenue. And the easy answer to rectify this issue is simply to bill for everything contemporaneously as you do it. And EVERY industry expert agrees.

So, thanks for reading this. I hope you find it helpful. More useful tips can be found in The Lawyer’s Guide to PCLaw.