Top Bookkeeping Challenges Faced by Attorneys – and How to Fix Them
For attorneys, legal knowledge is second nature – but bookkeeping often isn’t. Law firms face unique accounting challenges that can lead to bar violations, unhappy clients, and costly mistakes if not managed properly.
Download Our Free Brochure →Here are the top bookkeeping challenges attorneys face – and how to solve them:
1. IOLTA and Trust Account Compliance
Most firms struggle to properly track retainers and manage IOLTA compliance. Even a small error can trigger a bar audit.
Fix: Use a bookkeeper experienced in legal trust accounting and ensure monthly reconciliation.
2. Misapplied Retainers
Without proper account mapping, retainer deposits can get booked as income too early, leading to incorrect financials.
Fix: Set up a liability workflow in QuickBooks or integrate with legal billing software.
3. Lack of Timely Reports
Many law firms run months behind on P&L or balance sheet reporting – especially if they’re relying on part-time staff.
Fix: Use a service like RemoteBooksOnline to deliver CPA-reviewed monthly reports.
4. No Separation of Operating and Trust Funds
Using the same bank account can cause serious ethical and financial issues.
Download Our Free Brochure →Fix: Maintain separate bank accounts and ensure your books reflect it properly.
5. DIY Errors and Software Confusion
Many firms try to manage bookkeeping themselves or hire untrained staff – resulting in QuickBooks chaos.
Fix: Outsource to a legal-specific bookkeeping firm that understands your needs.
Test Case
A criminal defense firm in New York failed an audit due to mismanaged trust funds. Within 10 days of onboarding, RemoteBooksOnline reconciled all accounts, corrected retainer allocations, and provided CPA-reviewed reports for submission to the bar. Compliance was restored with no penalties.
FAQs
Do you handle retainers and IOLTA?
Yes. We’re experienced in legal trust accounting and bar compliance.
Can you clean up past issues?
Yes — we offer QuickBooks cleanup and backdated trust reconciliation.
Do you integrate with Clio or PracticePanther?
Yes. We support major legal billing tools.
Are reports ready for bar audits?
Absolutely. All reports are CPA-reviewed and audit-ready.
Is this service secure?
Yes. We use encrypted portals, SOC-compliant processes, and MFA.
Legal professionals trust our bookkeeping for lawyers to handle trust accounts, billing, and compliance.
Need to fix errors or outdated data in QuickBooks? Start with our expert QuickBooks cleanup services.
Struggling with trust accounting, retainer tracking, or bar compliance? Let us clean up your books and deliver consistent, CPA-approved reports.
