What is Law Firm Financial Reporting?

Your law firm’s financial management is extremely important; however, it can be complex, especially if you are not a financial strategy expert. Learning to understand and manage your firm’s finances will assist you in your profit and revenue growth, and will ultimately add to the overall success of your law firm.

Financial reporting can help you to read and understand your key financial statements and will allow you to analyse them to understand your business better, identifying your firm’s strengths and areas that require improvements.

Law firm financial reporting is the process of preparing and presenting financial information about a law firm’s operations and performance. It involves collecting, analysing, and reporting financial data to stakeholders, such as partners, shareholders, investors, regulators, and clients.

The financial reporting of a law firm typically includes financial statements such as the balance sheet, income statement, and cash flow statement. These statements provide information about the firm’s assets, liabilities, income, expenses, and cash flow for a specific period, typically a year.

Law firm financial reporting is important for several reasons. Firstly, it helps the firm’s management to assess the financial performance of the firm and make informed decisions about future operations. Secondly, it provides stakeholders with the information they need to evaluate the firm’s financial health and make decisions about investing, lending, or engaging the firm’s services. Thirdly, it is often required by regulatory bodies and can help the firm to comply with legal and regulatory requirements.

Overall, law firm financial reporting is an essential process for law firms to track and manage their financial performance, inform stakeholders about the firm’s financial health, and comply with regulatory requirements.

Our team at Legal Practice Support have many years of experience in dealing with law firm software and technology, which includes a range of reports and tools to keep track of all aspect of your business. Financial, Management Practices and Management Information, Dashboard, KPI and Trend Reporting are some of the key areas in which we are skilled.

If you are looking for more information on law firm financial reporting or have any questions surrounding how our team of developers can assist your firm then please do not hesitate to get in touch with a member of our team today. We can be contacted using the details at the bottom of the page and one of our experienced developers can talk you through your queries.

Financial Reports for Law Firms

The reporting of law firm finances involves tracing, analysing and reporting the income statements of the firm. This involves the use of financial statements, such as profit and loss statements, balance sheets and cash flow statements.

Financial reports may also be retrieved from case management systems, such as the Proclaim Accounts function. Proclaim Accounts is an additional package which can be integrated with the Proclaim Practice Management Software.

It is law firm accounting software which, if developed fully, can be extremely useful in assisting with financial management and financial position. Some of the main benefits of using Proclaim Accounts include increased efficiency and productivity owing to its useful features, such as auto bank reconciliation, cheque printing, smart slip posting and financial reporting.

The ability to report on any data in the Proclaim System is a key benefit of Proclaim Accounts, as well as some other case management systems. Some examples of the type of financial data that could be reported on include:

• Slips which have been requested by fee earners and have not yet been posted.
• Value of cases billed on a daily, weekly and monthly basis by:
• Fee earner
• Case type
• Source of work
• Disbursements paid out for a given time period
• Anticipated disbursements that have not yet been paid

Law Firm Financial Reporting: KPIs

Key Performance Indicators (KPIs) for law firms are specific metrics used to measure the firm’s performance in achieving its strategic goals and objectives. KPIs provide a way to track progress, identify areas for improvement, and make data-driven decisions. Some of the main KPIs which are reported on include:

• Monthly billed revenue
• Monthly revenue collected
• The firm’s debts including loans and credit cards
• Financial projections based on previous months
• Anticipated annual costs and outgoings
• Operating account balance
• Outstanding accounts receivable
• Age of accounts receivable
• Difference between projected annual revenue and anticipated costs
• Net income as a percentage of revenue

Law Firm Financial KPI Dashboard 

A number of law firm financial KPIs can be visualised using a dashboard, as long as you have the data, it can be extracted, and data visualisations can be produced and shown on a dashboard.

Profitability is paramount to your legal firm success. An insight into your business finances can help you to understand where money is being wasted, and where it is best spent. It can also provide you with easy-to-understand data on your realization rate, monthly revenue billed, firm debts, anticipated yearly costs, and so much more.

Making use of dashboard software to visualise financial data can have a number of benefits for your law firm. The main benefits are listed below:

• Complete visibility into your company – All of the important financial information about your business can be visually measured, interpreted and analysed using a simple dashboard tool. A dashboard reporting system can help management to understand what is working and what isn’t within their business decisions to help you make adjustment.
• Improved results – Having the ability to measure significant financial data provides business owners with the ability to identify strengths and weaknesses. This, in turn, will help them to make better decisions to improve upon those results.
• Improved efficiency – All financial data that you would usually record by manually typing into an excel report or spreadsheet can be automatically extracted from a data source and shown visually on a dashboard. The dashboard report can be updated as often as required to ensure live data is shown.
• Increased profitability – The ability to visulaise areas of business weaknesses allows management to focus on these areas and to improve upon the same. It may also identify areas where funds are being essentially wasted, so decisions can be made on which areas should not be funded to increase sales and profits.

How Legal Practice Support Can Assist

A key facet of any successful business is the ability to recall and analyse data as and when needed in a meaningful manner. Whilst many case management systems, such as Proclaim, come with many out of the box reports, most businesses soon find they need to develop their own bespoke financial reports to cover their unique business needs.

At Legal Practice Support, we have many years of experience in creating versatile and detailed reports to provide a range of different business functions. Financial, Management Information, Dashboard, KPI and Trend Reporting are some of the key areas in which we are skilled.

In the creation of financial reports, we have been able to enable many of our clients to obtain and analyse information, which in turn has aided them experience both the short term and long term growth they desired.

We are experts in legal software and can use your data points to create interactive law firm dashboards. We can retrieve data from your Proclaim or other case management system to help you understand your data better.

We are experienced in taking the out-of-the-box Proclaim system and adapting it to your exact requirements, making it a bespoke system for your law firm. This ultimately will improve your business processes as it will be individualized for your firm, saving you time and money on tasks you would have otherwise have to do manually.

Whilst we excel in building advanced case management reports, perhaps more importantly its our ability to spot where your business would benefit from a report that really makes the difference. Our Developers are experts are creating bespoke software solutions for our clients, adapting Proclaim to suit you and your business.

If you would like to discuss how a developer from the LPS team could assist your law firm, please do not hesitate to contact enquiries@legalpracticesupport.co.uk for further information or get in touch with us via Live Chat or the contact form, below.