Professional services and law firms
Trust accounting that reconciles. Partner comp without the spreadsheet.
ProvenCFO keeps the books and runs finance for law firms, accounting practices and other businesses that bill for their time. We reconcile trust accounts three ways every month, track billable hours and collections by person, book revenue the way each engagement is written, and keep partner draws on plan. Law firms are the deepest part of our bench.
| Component | Balance | Status |
|---|---|---|
| Bank statement, trust account | $418,650.12 | Reconciled |
| Trust ledger (book) balance | $418,650.12 | Matches |
| Sum of client ledgers | $418,650.12 | Matches |
| Utilization, firm | 71% | Two associates under 60% |
| WIP unbilled over 60 days | $84,300 | Bill this cycle |
Partner draws are $12,000 ahead of plan for the quarter. Recommendation: hold October distributions until the unbilled WIP is invoiced.
Sound familiar?
- The trust or IOLTA account has never been reconciled three ways, and the bar could ask any time.
- Nobody knows which clients are profitable because hours live in one system and dollars in another.
- Partner draws run ahead of profit and the tax bill arrives with no reserve.
- Unbilled work sits in WIP for months and gets written off at year end.
- The practice management system and the ledger disagree, and the office manager reconciles them by hand.
- Growth means a hire, and nobody has modeled what it does to cash in the first six months.
Software we work in
QuickBooks Online, Xero, Clio, PracticePanther, MyCase, Harvest, Toggl, BILL, Ramp, Gusto.
Bookkeeping from $400 / mo
What ProvenCFO does for you each month
Trust and IOLTA accounting
Three-way reconciliation every month (bank, trust ledger, client ledgers) with the exception report your bar or auditor expects. Client sub-ledgers kept current.
Utilization and realization by person
Billable hours, utilization, realization and effective rate by partner, associate and team each month, pulled from Clio or your practice system and tied to payroll cost.
Revenue recognition that matches the engagement
Retainers, flat fees, contingency and hourly recognized as earned, with deferred revenue and unbilled WIP on the balance sheet. The P&L stops swinging with invoicing.
Client and matter profitability
Revenue, direct labor and cost by client, matter and practice area, so renewals, rates and staffing are decisions and not guesses.
Partner compensation and distributions
Draws against a plan, reserves for taxes, and a quarterly view of what each partner has actually earned.
Hiring and capacity model
Before the offer letter: what the hire does to utilization, cash and margin over the first year.
Questions
Do you handle IOLTA and trust accounting?
Yes. We reconcile trust accounts three ways every month, keep client sub-ledgers, and produce the report your state bar or auditor requires. It is the first thing we set up for a law firm.
How do you treat retainers and flat fees?
A retainer paid in advance is a liability until the work is delivered. We recognize revenue as hours or milestones are delivered, so the P&L reflects what the firm earned that month rather than what it collected.
Can you tell us which clients and matters make money?
Yes, if time is tracked by client and matter. We pull time monthly, cost it at loaded rates, and report contribution by client, matter and practice area.
What does it cost for a 12-person firm?
Typically bookkeeping plus controller at $1,650 to $2,800 a month, more with multiple entities or trust-heavy practices. CFO Foundation adds $1,500 for the cash forecast and monthly session. See pricing.
Can we keep our office manager on the books?
Yes. Many firms keep someone in-house doing daily entry and use us for the trust reconciliation, the close, the reporting and the CFO work.
Start here
Find out what your numbers are telling you.
A 20-minute call. We look at how your books run today and tell you what we see. Nothing is sold on the call.