Tips on how to manage your law firm’s budget
As a law firm, you’ve got plenty to think about: managing client data appropriately, handling cases, good client care, and managing your accounts. Your accounts may not be something you specialise in, but they’re one of the most important aspects of your firm.
You need to keep on top of them and manage them accurately and efficiently. This week we’ve highlighted some key tips on how to do just that.
Invest in automated budgeting software.
No matter your level of expertise, we’re all capable of human error. When it comes to your budgeting, your firm may (quite literally) not be able to afford making those mistakes.
With an online accounting software, you can manage your bookkeeping, invoicing and expenses together. This makes it easy to create, send, track and record invoices to your accounting without switching between software. This largely minimises the risk of inaccuracies. It’s quicker, more efficient, and much more secure.
Do your research.
It’s never wise to go in blind, and that goes for any industry you work in. Every firm will be different. You’ll have specific clients with specific needs, and you’ll need to budget accordingly.
When you know exactly what you need to invest for your firm to be successful, you’ll be able to manage your budget much more efficiently. An informed budget always makes for a better budget.
Make realistic projections and goals.
We all like to dream big. However, when it comes to accounts, be realistic. If you overestimate your profits and revenue, that will influence your budgeting, and you could face financial difficulties.
Making realistic goals will help inform your projections, and vice versa. Try short-term and long-term goals, and make sure to keep it updated.
Make variable predictions as well as fixed ones.
During your predictions, bear in mind that some costs won’t be fixed. Travel, postage, events: all of these are examples of items in your budget that may vary in price. Make sure that when you’re drafting your budget, you factor that into your projections.
Set some money aside for contingencies.
Running any kind of business can be unpredictable, let alone running a law firm. It’s always worth setting aside between 5-10% of your budget in case of emergency.
Not only does it protect the accounts, it also eases the pressure off of you if something does come up. You can focus entirely on solving the problem, rather than worrying about how it will affect the accounts.
Check and update it regularly.
We’ve touched on this already, but it’s worth repeating. At the end of the day, when it comes to running a law firm, things can change. You need to make sure you’re keeping your budget updated according to those changes.
Checking it regularly helps you to see what’s working and where improvements need to be made. For example, if you’re continuously overspending, you’ll notice quickly and will be able to adjust before it affects your financial goals too drastically.
Outsource your accounts.
If you don’t want to bear the responsibility of managing your own accounts, let an outsourced expert manage them for you.
At Numero, we specialise in helping firms manage their accounts so that they work with their business, not against them. Get in touch with Numero today to find out more about our services.
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