Key Takeaways
- Law firm accounting, built for reality, including revenue recognition for time and fixed‑fee work, WIP valuation, unbilled receivables, deferred revenue, and monthly rollforwards.
- Trust accounting and retainers done right, with IOLTA segregation, client‑matter ledgers, three‑way reconciliations, dual approvals, and documented authorizations.
- Discipline around timekeeping and rates, standardized job costing by matter, and class tracking to expose true margins and improve realization.
- Internal controls that stand up to review, including segregation of duties, reserve analysis, and independent monthly reviews for audit‑ready financials.
- Automation across time, billing, and accounting, which shortens billing cycles, lowers DSO, and gives clear cash visibility.
Who We Serve and How We Fit In
You run an advisory‑driven firm that supports law practices, consultancies, and other professional services teams. You need a partner who can scale your capacity without risking quality or compliance. Accountably provides trained offshore professionals who join your workflows and tools, from practice management to GL. We deliver white‑label bookkeeping, WIP and trust accounting, payroll, KPI dashboards, advisory support, and comprehensive tax preparation and review.
We operate as an extension of your team, under your brand, with IRS, GAAP, cash‑basis, and SOC 2 controls. For legal clients, we add IOLTA, ABA Model Rules alignment, and state bar trust requirements.
What You Get From Accountably
Service Highlights
- Month‑end close with WIP, unbilled, and deferred revenue reconciliations
- Matter‑level job costing, utilization and realization analytics, and class tracking by practice, partner, office, or client type
- Trust accounting that includes three‑way reconciliations, client‑matter ledgers, and negative‑balance alerts
- Automated billing workflows, standardized rate cards, and approval paths that reduce write‑offs
- KPI dashboards for utilization, WIP days, realization, average billable rate, and DSO
- Tax support across federal, state, and multi‑state returns, including 1040, 1065, 1120, 1120‑S, 1041, and 990, plus property and payroll tax filings
- Audit‑ready workpapers with segregation of duties and independent review
Compliance You Can Rely On
Compliance is not a bullet point, it is the backbone of the engagement. We align your workpapers and policies with:
- IRS compliance and GAAP standards, with cash‑basis reporting where engagement terms require it
- ASC 606 for professional services, including time and materials, percent‑complete, milestones, or completed‑contract approaches, applied consistently
- IOLTA and state bar trust rules, with segregation, three‑way reconciliations, and documented authorizations
- SOC 2 certified processes, including access controls, audit logs, and data handling
- Payroll and employment tax compliance, plus property tax, multi‑state filings, and reconciliations
We document your revenue recognition policy, retainer rules, billing cadence, and review checkpoints, then we test them monthly. The outcome is simple, fewer surprises at audit time and faster, cleaner closes.
Revenue Recognition Built for Legal and Professional Services
Your revenue policy shapes cash flow, margins, and partner confidence. We translate engagement terms into clear accounting rules, then automate as much as your systems allow.
Time‑Based Work
- Capture hours daily at approved rates, then recognize earned fees as work is performed
- Reduce WIP and create unbilled receivables until invoiced, with aging and collectability checks
- Use standardized realization targets by role, and review variances monthly
Fixed‑Fee and Milestone Work
- Choose percent‑complete using objective progress measures, for example, actual hours over budget, or apply completed‑contract where appropriate
- Track unbilled revenue separately from deferred revenue, test collectability, and reconcile all three balances monthly
- Maintain granular job costing so percent‑complete and margin reporting remain defensible
- Time‑based, hours times rates, reduce WIP
- Fixed‑fee, percent‑complete or completed‑contract
- Separate unbilled and deferred, test collectability
- Reconcile monthly, document policy and apply consistently
Retainers, Trust Accounting, and IOLTA Controls
Trust funds are fiduciary, not operating fuel. We set up the retainer lifecycle so your clients stay compliant and you stay confident.
Retainer Lifecycle Best Practices
- Define retainer types in engagement letters, advance, security, or earned on receipt, with clear application rules
- Segregate IOLTA or escrow from operating, record client‑matter detail, and post daily
- Maintain client‑level trust ledgers that tie to bank statements, with partner or supervising accountant review each month
- Move earned fees to operating only after services are performed and the client is notified
- Use matter‑level controls, WIP tracking, negative‑balance alerts, and external reviews as needed
We pair strict segregation with practical automation. Dual signatures for large disbursements, documented approvals, cleared‑check review, and full audit trails are standard.
Trust Accounting Segregation, At A Glance
Control | Best Practices |
Segregated accounts | No commingling, separate IOLTA and operating |
Client ledgers | Daily balances with client‑matter coding |
Reconciliations | Monthly three‑way, include cleared‑check review |
Authorizations | Document transfers and disbursements, dual approvals |
Oversight | Independent reviews with issue tracking and remediation |
Rules vary by jurisdiction, so we maintain state‑specific checklists and retention schedules, commonly 5 to 7 years, and we coordinate with your CPA review and bar requirements. The goal is consistent, repeatable compliance that passes scrutiny and protects client funds.
Work in Process, Unbilled Revenue, and Deferred Revenue
Treat WIP, unbilled, and deferred as distinct, linked parts of one engine. When each is measured cleanly, you recognize revenue correctly, bill faster, and remove balance sheet noise.
Recognizing Work in Process
- Record WIP as earned but not invoiced based on hours or percent‑complete
- Reclassify WIP to receivables at invoicing, keep an eye on WIP aging so unbilled does not outrun billed AR
- Maintain realization targets by role and apply reserves for slow‑moving WIP when collectability is in doubt
- Track retainers as deferred revenue, release only as milestones are met and the client is notified
Managing Unbilled Revenue
- Enforce daily time entry, practitioner‑specific rates, and standardized WIP valuation
- Run monthly WIP rollforwards with aging, realization, and collectability analysis, resolve disputes before billing
- Recognize unbilled consistently, and apply timely write‑downs with documented rationale
- Monitor WIP days, unbilled as a percentage of revenue, and realization to tune billing cadence and cash flow
Handling Deferred Revenue
- Record client prepayments as liabilities, then recognize revenue under ASC 606 using time and materials, percent‑complete, or milestones
- Reconcile unbilled and deferred weekly to timesheets, retainers, and fee schedules
- Trigger billing when thresholds are reached, target 30 to 60 day conversion from WIP to cash
- Perform monthly partner reviews, age unbilled work, and eliminate uncategorized entries
- Define recognition methods and controls
- Automate WIP‑to‑bill triggers
- Reconcile balances frequently
- Monitor aging and DSO trends
Actual Job Costing, Class Tracking, and Profitability Analysis
Healthy top line means little without true matter‑level margins. We map every hour and expense to each matter, including non‑billable time, so you see real gross margin and where value is created or lost.
Focus Area | Action |
Job costing | Post actual labor, expenses, and write‑offs to matters |
Class tracking | Tag practice, office, and client type consistently |
Controls | Reconcile monthly, remove miscellaneous codes |
KPIs | Realization, collections, leverage, matter GP percent |
Decisions | Reprice, re‑staff, or exit loss‑making matters |
With class tracking across practice groups and offices, you can compare contribution margin, profit per partner, and effective hourly rate. That is how firms make confident pricing and staffing calls.
KPI Dashboards and Benchmarking
Move from static reports to live dashboards your partners actually use. We track utilization, target 70 to 85 percent depending on mix, realization, average billable rate per timekeeper, WIP days, aim under 60, and DSO, 30 to 60 is common. Segment by practice, partner, and client segment to detect where pricing, mix, or capture is off. For planning, we add pipeline conversion, win rate, average engagement value, and intake to start timing to forecast revenue and WIP.
- Daily open matters and missing time entries
- Invoice aging and cash risk by client
- Net revenue per lawyer and leverage ratio
- Overhead ratio and backlog trend
The outcome is a faster month‑end close, earlier visibility on cash risks, and fewer last‑minute surprises.
Internal Controls, Operational Reviews, and Risk Management
Controls keep your numbers trustworthy and your partners focused on work, not fixes. We separate duties for time entry, billing approval, and cash receipts so no one records time and approves payments. We run quarterly walkthroughs across timekeeping, billing, and trust accounts to catch mispostings and tighten weak points.
Control | Threshold | Action |
Late time | More than 7 days | Exception report and remediation |
Write‑offs | Above 1,000 | Owner signoff |
Trust balance | Negative | Immediate cure plan and review |
Monthly, we require WIP and unbilled reviews with variance investigations above 10 percent. We tie job costing and class tracking to actual hours and expenses, then reconcile to the general ledger. The payoff is cleaner audits and confident partner meetings.
Technology Stack, Time Tracking, Billing, and Project Accounting
Tools should reduce leakage and shorten the path from work to cash. We standardize integrated time capture, matter‑centric billing, and project accounting so WIP, unbilled, and deferred revenue stay aligned.
Integrated Time Capture
- Capture timestamps and activity metadata at the source, user, client and matter, and task code
- Replace manual timers with a unified stack that typically lifts captured time by 20 to 40 percent
- Feed entries directly into WIP and unbilled, updating utilization, realization, and leakage daily
- Pair cloud timekeepers like Clio, PracticePanther, or Replicon with billing engines that enforce rate cards and AFAs
- Use audit logs, rounding rules, and mandatory fields to cut miscoding
Real‑time WIP syncing enables daily accrual dashboards. Capturing non‑billable codes improves margin analysis and pricing decisions.
Automated Billing Workflows
- Connect time tracking, matter‑centric accounting, and a rules‑driven billing engine
- Recover missed time by integrating tools such as QuickBooks Time, Replicon, or Harvest
- Automate rate logic, tiered or blended rates, sliding discounts, and contingency triggers to eliminate manual errors
- Configure approval workflows with write‑off thresholds, then send e‑billing through secure portals with payment links
- Monitor utilization, unbilled WIP, AR, and realization in real time with native dashboards or BI tools
Clients pay faster when billing is clear, accurate, and on schedule. Your DSO and partner stress levels drop together.
Common Accounting Pitfalls and How We Fix Them
- Chart cleanup, remove unspecified and misclassified transactions, lock account mappings, and ban miscellaneous codes
- Weekly WIP and unbilled reviews, tie WIP schedules to the time‑entry system to reduce carryover and align recognition
- Daily time entry enforcement, correct rates, and monthly high‑variance audits to recover typical 3 to 8 percent leakage
- Full segregation of duties for retainers and client funds, daily trust reconciliations, and milestone mapping for advances
- Monthly variance analysis across revenue, WIP, unbilled, and deferred with documented remediation
We turn these fixes into repeatable SOPs, then we train your team and monitor adoption.
Taxation Support for Legal and Professional Services
Your clients expect clean accounting and accurate tax filings. We prepare and review federal, state, and multi‑state returns, including 1040, 1065, 1120, 1120‑S, 1041, and 990, and we handle property and payroll tax filings with matching workpapers. Our white‑label model means you stay the trusted advisor while we carry the heavy lift. Where cash basis is appropriate, we maintain both management and tax views, so partners see performance and tax exposure clearly.
Why CPA Firms Choose Accountably
- White‑label delivery that feels in‑house to your clients
- Offshore staffing trained on legal and professional services workflows
- SOC 2 certified processes, audit logs, and documented controls
- Clean integrations with your existing tools, not one more portal to manage
- A steady month‑end rhythm, which leads to faster closes and fewer escalations
FAQs
What is included in law firm accounting services?
You get WIP and unbilled management, IOLTA trust accounting with three‑way reconciliations, monthly close with revenue recognition, matter‑level job costing, billing automation, KPI dashboards, and tax support. Everything is delivered under your brand with documented controls.
Do you support ASC 606 for professional services?
Yes. We document your performance obligations, choose time and materials, percent‑complete, milestones, or completed‑contract as appropriate, and reconcile unbilled and deferred monthly. We keep evidence in workpapers to support audits or reviews.
Can you work inside our existing stack?
We do. We integrate with common tools used by law and professional services firms and align to your SOPs. Our team builds checklists and dashboards so your partners get fast, consistent reporting without changing systems.
How do you handle trust accounting and retainers?
We segregate client funds, keep client‑matter ledgers, and perform monthly three‑way reconciliations. Transfers require documented approvals, and earned fees move to operating only after work is performed and the client is notified. Controls are mapped to ABA Model Rules and state bar requirements.
What about security and data protection?
Our delivery uses SOC 2 certified processes with access controls, audit trails, and data handling standards. We operate with least‑privilege access, and we document every critical action for your review.
Do you provide white‑label tax services?
Yes. We support preparation and review for 1040, 1065, 1120, 1120‑S, 1041, 990, and related state filings, plus payroll and property tax. Workpapers are audit‑ready and align to your firm’s standards.
Ready To Build A Compliant, Scalable Back Office
If your legal or professional services clients need cleaner WIP, true margin by matter, and bulletproof trust accounting, we are ready to help. Accountably equips your firm with trained offshore staff, white‑label back office delivery, and a compliance framework that holds up under pressure. You keep the client relationship and strategy, we bring the capacity and discipline.
Book a discovery call, request a pricing proposal, or ask for a sample close pack. We will show you how your next month‑end can be faster, cleaner, and easier to explain.
