GPSolo Magazine - December 2003

Accounting

Accounting software for law firms can run the gamut from a full-fledged accounting system that gives all of the reporting and functionality of an accounting practice to a simple program that keeps track of time. Shopping for features that appeal to and accommodate the level of financial management your firm wants can be made simpler by understanding all the software options available. These can be as varied as the functions that need to be managed in the firm. From time tracking to general ledger statement generation, the options for law firms when it comes to accounting software are many.

Time Tracking

Keeping time is often the bane of an attorney’s existence; time-tracking software can help. Such software generally also tracks expenses as well as time and can be found in off-the-shelf models starting at less than $100.

Time entries are entered directly into the timekeeping applications via entry screens that list client or matter name, type of activity or expense, start and end date of the work, description of the work, amount of time worked, and rate for the work. Billing codes may be preset to include items that are common to general law practices. Another option is pop-up timers for measuring the actual time spent on a particular task. Time entries also may be brought into the software via links or import processes from legal case management systems. Online and PDA time entry also is quite popular.

Time-tracking software can stand alone and therefore may be less expensive than more comprehensive systems. More commonly, however, it is a part of time and billing software.

Time and Billing

Billing is arguably the most important management process in a law office. Not all law firms handle accounting in-house. Law office billing software is often the choice for firms utilizing outside accountants or bookkeepers to handle account reconciliation, statement generation, taxes, and other advanced financial management tasks. Good billing software is very flexible and can cost anywhere from just over $100 to as much as $350 per license. Good applications include pre-billing options and the ability to undo and reprint billing statements, along with various options for the format in which information is displayed on bills and for how bills are transmitted (i.e., PDF, HTML, or RTF). Tracking accounts receivable for client matters also is standard in billing software. In addition, reports can be drawn from the systems that cover issues such as productivity, work in progress, profitability, and accounts receivable. The better applications also have overview or recap screens that put all billing and receivable information for a client matter in one place.

Billing software is useful for tracking client funds or trust accounts and can be set to pay off client bills automatically. The software records payments and other transactions, and some systems even allow users to generate and track deposit slips for operating and trust accounts. Most programs will generate an income report broken out into fees, costs, and interest.

Billing software can keep track of money transactions for client matters, but this generally is limited to simply tracking time and expenses and then generating bills for these. The systems usually do not perform general ledger accounting or check writing, as does integrated general ledger accounting software.

Integrated General Ledger Accounting

Full general ledger accounting systems for law firms start at about $300 per license. These programs differ from general business accounting packages because they consider trust accounts as short-term liabilities when calculating the profitability of the firm, and can incorporate trust activity with actual billings. Using a general business program generally means the firm will have to customize the application to fit its needs. For instance, many general programs will generate service invoices but not the type of professional statements usually used by law firms. Having to customize the software can be burdensome, especially if it’s not done when the software is first implemented. This scenario makes legal-specific products more practical for most firms.

General ledger accounting programs usually come with a chart of accounts; the legal accounts make for easy monitoring of income and expenses for the firm. Like billing software, billing functionality also is built into general ledger accounting applications, so instead of tracking money activity only for clients, they also track money activity for the firm. Monthly reconciliation is automated, and generating not only bills but also general ledger statements showing firm profit and loss and overall worth is simple to do. Check writing is another standard in general ledger software but usually is not found in stand-alone time and billing applications.

With advanced reporting for accounts payable and electronic billing, firms can utilize software with more client information management features like calendaring and contact management. Larger firms may prefer systems that are truly integrated with full practice management, so that payroll, accounts payable, cost recovery, and online time entry and accounting are included. Unfortunately, the cost of such systems can be steep. Small firms usually can add these features by buying specific modules, at $125 to $500 per module.

QUICK SOFTWARE COMPARISON

Billing Matters by DATA.TXT Corporation (www.timematters.com) is a time tracking and billing program. The Professional Edition costs $300 for the first user and $150 for each additional user; the Enterprise edition costs $600 for the first user and $300 for each additional user.

BSA Pro by SeaBILL (www.seabill.com) is a time tracking and billing program that offers a module for the Palm operating system. The Silver Edition (up to two timekeepers) costs $339.90; the Gold Edition (up to ten timekeepers) costs $439.90.

DLS (Dapix Legal Software) by Dapix, Inc. (www.dapix.com) combines time tracking, billing, general ledger accounting, accounts payable (in a module), payroll (in a module), and check-writing functions. The Personal Edition license costs $499; the Professional Edition license costs $799; and the Enterprise Edition license costs $999.

Juris from Juris, Inc. (www.juris.com) combines time tracking, billing, general ledger accounting, accounts payable, payroll, and check-writing functions, and it comes with modules for the Palm and Pocket PC operating systems. The small firm startup edition costs $1,700 to $6,950; licenses for 20 to 80 timekeepers costs $15,000 to $40,000.

PCLAW by Alumni Computer Group, Inc. (www.pclaw.com) combines time tracking, billing, general ledger accounting, accounts payable (in a module), payroll (in a module), and check-writing functions, and it comes with modules for the Palm and Pocket PC operating systems. Licenses for a single user and two timekeepers cost $295; a network version for up to five timekeepers costs $495; the PCLaw PRO version for up to ten timekeepers costs $1,795; modules cost $125.

RTG Bills by RTG Data Systems (www.rtgsoftware.com) is a time tracking and billing program that offers a PDA module. It costs $75 per license, and $15 per additional license and $15 per additional timekeeper.

TABS3 by Software Technology, Inc. (www.tabs3.com) combines time tracking, billing, general ledger accounting (in a module), accounts payable (in a module), payroll (in a module), and check-writing functions, and it comes with a module for the Palm operating system. The Jr. version costs $295 for a single user and two timekeepers; the Network version costs $995 for up to ten users and five timekeepers; modules costs $200.

Timeslips by Best Software SB, Inc. (www.timeslips.com) is a time tracking and billing program that offers a PDA module. The Sole Practitioner version costs $199.99; the Network version (single station) costs $399.99.

Natalie R. Thornwell is director of the State Bar of Georgia’s Law Practice Management Program. She can be reached at natalie@gabar.org.

 

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