Streamlining year-end financial tasks with TimeSolvPay
As the year draws to a close, it’s time to get proactive about key financial tasks. TimeSolvPay can help law firms manage these activities with greater accuracy and efficiency, leaving you more time to wrap up client work.
1. Review firm financials
Conduct a detailed analysis of your financial statements and reports. This should include:
- Profit and loss statement
- Balance sheet
- Cash flow statement
- Accounts receivable
- Work-in-progress (WIP) reports
As you review your firm’s financials, it’s also important to look at metrics like revenue, expenses, profit margins, and cash flow. This data will help identify areas of improvement. To spot trends and issues that need attention, compare this year’s performance with those of previous years and your budget targets.
2. Make sure all clients are invoiced
Don’t let billable hours go unpaid at the end of the year. Track all hours worked through November and December and run an accounts receivable report to see what payments are still outstanding. Send final invoices to collect outstanding payments. If there are any uncollectible balances, assess what you can write off.
Using TimeSolvPay simplifies this process by offering easy-to-track invoicing and payment collection, helping you settle balances faster.
3. Settle outstanding bills
Just like you need clients to pay all their outstanding bills by end of year (EOY), you should do the same with your invoices. Settle all vendor invoices and outstanding expenses before year-end. If necessary, allocate funds to clear these payments to close your books accurately.
TimeSolvPay allows you to process these payments quickly, ensuring all transactions are documented and streamlined.
4. Review trust accounts
Ensuring that your firm’s trust accounts are properly managed is vital to your firm’s standing, and the year-end financial management is an excellent opportunity to cross-check everything.
As you evaluate reports, check that client ledgers are balanced and that earned fees are moved from trust to the operating account. Review your WIP report to track any remaining time and expenses.
Trust accounting can be complicated and unwieldy. TimeSolvPay helps by seamlessly managing these transfers, ensuring accurate tracking of trust account movements.
5. Tackle year-end tax strategy
Meet with your accountant to discuss year-end tax strategies. What potential deductions could you make? Have you met your state and local tax obligations? Are any estimated payments required before December 31?
TimeSolvPay’s reporting tools can generate detailed financial summaries to assist in your tax planning.
Planning for the next fiscal year
Just as year-end financial tasks let you end on a strong note, they also help you start off strong, too.
Set your budget and forecasts
First, there is a need to set budgets and revenue forecasts consistent with a firm’s strategic objectives. This calls for looking at the firm’s past financial performance and seasonal fluctuations in business, and considering anticipated changes in demand by clients or market trends.
With TimeSolvPay’s financial tracking, projecting cash flow for future budgets becomes more efficient. Your firm’s latest financial information will go a long way to help plan and manage resources through a detailed budget of prospective expenses, investments, and revenue sources.
Identify your financial goals
Aside from budgeting, the establishment of financial objectives and the development of action plans are essential in both guiding and delineating the growth trajectory of the firm. These should be SMART:
- specific
- measurable
- achievable
- relevant
- time-bound
Once those types of goals have been established, develop action plans that delineate the steps required to achieve those goals—whether training programs for attorneys, marketing campaigns, or technology investments—to set a clear trajectory.
Reassessing such goals and action steps on a regular basis helps the firm stay on course toward its financial goals for the year.
Communicate with clients
Finally, year-end client communication is not just a formality but a valuable opportunity to engage in solid relationships for the coming year.
If there are any changes in firm billing and payment policies that will take place in the new year, make sure clients are informed. Similarly, now is a good opportunity to solicit feedback from clients about their experience with your firm during the past year. This kind of proactive communication positions your firm as a responsive and trustworthy provider who cares about the level of service being delivered.
Make your year-end financial management stress-free with TimeSolvPay
Assessing your law firm’s financials, as well as objectives, goals, and KPIs, is a vital step for year-end wrap-ups and new-year planning. It is clear that having the most up-to-date financial information is the driving factor that will set the tone for strategies.
With TimeSolvPay, you can manage billable time and invoices with ease on a secure platform that is convenient and efficient for both you and your clients.