Krishi Chowdhary has half a decade of experience writing buying guides and product reviews for numerous leading technology websites. He spent two years writing for…
The best accounting software for law firms of every size, even individual solicitors. It allows you to add payment links in the invoice itself, plus there’s no dearth of tracking and management features either.
The best accounting software for law firms allows lawyers and solicitors to better tend to their clients by automating tasks such as billing, sending payment reminders to clients, mileage tracking, and consolidation of financial accounts, amongst others.
Dedicated legal accounting software comes with tailor-made tools for trust, asset, and matter management, besides providing expert assistance on processes related to taxation and expense monitoring.
Show Full Guide
We’ve put FreshBooks ahead of the rest for its ability to cater to law firms of all sizes and its superb compatibility. However, every accounting software solution has something unique to offer, and it really all boils down to what you’re looking for. Here’s our ranking:
Here’s a roundup of the best accounting software for lawyers with the help of a table highlighting only the most important aspects:
Let’s now dive deeper and look at the best features, pros, and cons of each of the best accounting software tools so that you can zero in on the best one for your needs:
FreshBooks is one of the few legal accounting software solutions that can work with law firms of all sizes. It has separate plans for freelancers, self-employed legal professionals, and large law firms.
With FreshBooks, you can onboard your accountant (if you have one) to review your financial reports. Small businesses also praise the software as it’s very easy to use thanks to the clean interface, so even non-accountants will be able to get going in no time at all.
A notable feature of this legal invoicing software includes recurring billing, where you can charge regular clients automatically each month. You’ll also be able to track the time you spend on a client, so there’s no confusion about what you’re owed.
Plus, the ability to turn estimates into invoices is a huge plus. All this takes the hassle out of billing for both parties and ensures you get paid on time. Freshbooks also further simplifies the process by allowing you to add payment options directly to the invoice. You can add links to your provided payment option, making it easy for your client. The easier you make it for clients, the faster they’ll pay you.
Automatic tracking is available for transactions made via a bank or credit card, meaning it’ll be more seamless for you to file taxes at the end of the financial year. On its highest plan, you’ll enjoy lower credit card transaction fees – something large law firms will benefit from quite a lot.
Although there’s no free plan, Freshbooks is a complete powerhouse as it comes integrated with industry giants such as PayPal, Basecamp, WordPress, and MailChimp, amongst ample others. Device compatibility is superb too, and you’ll have free Android and iOS apps to use Freshbooks on the go.
Oracle NetSuite allows you to manage your fixed assets – you can track the complete lifecycle of an asset (both depreciating and non-depreciating) right from its purchase to disposal. Numbers such as a change in value will come in handy when you want to calculate your law firm’s overall worth and market valuation or do your taxes.
Oracle NetSuite is particularly great for large law firms as it offers a slew of functionalities, from financial consolidation and reporting to project and asset management, and even a great CRM (customer relationship management) software for tending to clients.
For day-to-day accounting, NetSuite lets you maintain a general ledger where you can record your transactions along with complementary details such as transaction number, summary, and currency. At the end of the day, you can have your account automatically reconciled to ensure accurate tracking – budding law firms will find this automation very useful.
Account Reconciliation is the process of tallying your record of a particular period’s expense with the bank’s records to ensure you haven’t missed any entries. This feature also helps you prevent unauthorized transactions from ill-intentioned employees and help you establish a solid reputation for your law firm.
To further simplify the management of your books, NetSuite divides your transactions into two parts — accounts payable and accounts receivable. The former lists down the payments your law firm is due to make. You can link your bank/card and automate these payments to avoid late payments.
Account receivables contain payments that others owe to you. In this case, it’s your clients. Here too, you can automate the process and have NetSuite automatically send invoices to your clients, process their payments and keep a record of the transaction.
Zoho Accounting stands out for its free forever plan and its dedicated customer portal. Here, you can ask your clients for feedback on their experience and discover areas that could use improvement. You can also communicate with your clients and expedite estimate requests, quote approvals, and other queries.
It’s a more efficient way to deal with your clients instead of conventional routes such as emails. This portal also allows your clients to make payments, either in bulk or individually, so that they don’t have to depend on your team for any transaction, which is also a benefit for your team.
Zoho Accounting also provides a similar portal for vendors, which has the same features as the customer portal. However, you might not need it much as a law firm unless you’re leasing your resources or outsourcing your work.
Zoho Books is undoubtedly the best free accounting software, and you’ll enjoy invoice customization, bank reconciliation, and mileage tracking, among others, for free, all of which are premium features with other tools.
Expense management is super simple, but one of our favorite features is the audit trail. From deleted entries to new additions and edited numbers, you can track every small change. This way, if an employee tries to manipulate the numbers, you’ll find out right away. Plus, collecting payments from your clients is a breeze with Zoho Accounting, too.
Just like Freshbooks, it lets you add payment methods to your invoices so that your clients can pay you directly from there. The only difference between the two is that Zoho Accounting offers more payment options. With Freshbooks, it’s limited to credit cards and ACH, whereas Zoho offers up to 10 options, including Paytm, Razorpay, and Eazypay.
Other than this, Zoho Accounting nails the basics with automatic payment reminders, recurring billing, expense monitoring, and time tracking, amongst ample more. Almost all of these features are available in the completely free plan.
Xero allows you to send and receive payments in up to 160 currencies, which is a blessing for law firms that have a global user base or those that deal with international clients. The foreign exchange rates are taken from XE.com and updated on Xero every hour, with the official rate of the day being finalized at 11 PM.
However, if you’re in a different time zone, the time might slightly vary for you. To get started, you’ll need to choose a base currency and then add a foreign currency that you can use on invoices and quotes. It’s worth noting that once you’ve added a base currency and foreign currency, it can’t be changed.
If your law firm deals with a lot of paper bills, you’ll also be happy to know that Xero has partnered with Hubdoc and now lets you capture all your bills and receipts and store their digital copy. This way, you can keep your office clutter-free yet have a copy of all your expenses for tax season.
Small and growing law firms will love that Xero allows you to onboard unlimited users no matter your plan — company-wide accounting has never been more cost-effective. 24/7 support, straightforward budgeting, and configurable reports further enhance the overall experience.
Along with the default plans, Xero also offers several paid add-ons for your expanding accounting needs. One of its most popular accounting add-ons is Expense Claim management. This tool can be used by your employees to record company-oriented expenses and submit them to the necessary department for quick reimbursement.
This feature comes with a separate dashboard where you’ll have a copy of the expense receipt along with additional details such as subject, date, amount, and employee name. At a glance, you’ll have everything you need to verify the claim. And since your bank accounts will be connected to Xero, you can directly reimburse the claims from within the platform, just as you pay bills.
Bonsai’s unique selling point is that it’s one of the few legal accounting tools that let you create a bank account — a Bonsai banking account. Setting up is super simple, and there’s no minimum balance that you’re obliged to maintain. Also, there are no hidden fees, and you’re FDIC-insured for up to $250K.
Just like your regular bank account, a Bonsai account also comes with a physical card which you can use to make quick payments. But what’s unique is that it provides you with a virtual banking card that you can use to speed up online payments. Apart from that, you can also use your Apple Wallet to make payments.
The software also comes with a rich database of templates. From invoices to estimates, you’ll find a professionally designed template for every purpose, which is particularly helpful for new businesses with minimal experience.
In any business, especially law firms, it’s important to come across as professional to give clients confidence in your expertise, and much of that can be shown in the way you design your documents. That’s why we recommend Bonsai’s pre-designed templates.
Beyond all this, Bonsai establishes its place as one of the most well-rounded accounting software for law firms thanks to its tax estimates which also include an option to track dedications for accurate tax reporting. Another benefit of using Bonsai is that it offers hybrid plans – even in its accounting plan, you’ll find some of the best CRM and client management features.
One such feature is scheduling. Using this, your clients can access your calendar, find a slot when you’re available, and book a meeting. This saves you the hassle of going back and forth on email threads to schedule a session. You can also charge for the session upfront using Bonsai so that you don’t have to chase the client afterward.
Sage Accounting is a haven for small law firms and solicitors thanks to its myriad of financial solutions that meet both basic and extensive needs. The plans are nicely divided, with high-end features such as asset management reserved for superior plans.
Besides a plethora of helpful guides, year-end tips, and a community forum, there’s also a Sage University for added support for first-time accounting software users.
With Sage, you can create and manage your invoices, track your expenses, and have your account reconciled to tally the entries. Also, there’s a handy mobile app for use on the go. As one of the best cloud-based accounting software, Sage Accounting is also available for use on web browsers.
The tool will help you estimate the revenue from a project and then use your past records to calculate the total cost for the job to ultimately maximize your profits. This feature is further supported by a real-time reporting feature where you get to run unlimited reports on your expenses and profits.
As an add-on, you can also connect your account with its payroll service to automatically send out employee salaries at the end of each month. Automation and categorization abilities are brilliant, too. For instance, the general ledger is brightly labeled to show net income, and the real-time numbers on the top always tell you what’s your current profit or expense.
This is brought to you by an accurate recording of transactions and collaboration with your accountants and bookkeepers in real-time. All of this will help you make informed decisions and churn out more profit. Plus, law firms with clients overseas will benefit from its ability to accept multiple currencies. So, despite limited integration options, Sage Accounting offers practically everything to meet most needs.
QuickBooks is the ideal accounting software for beginners, as every user, regardless of the plan they subscribe to, gets a free guided setup. Here, a QuickBooks expert will help you get your account up and running, connect your bank accounts to it, and also enlighten you on the best practices that’ll help you get the most out of the tool.
QuickBooks’s miles tracking is ideal for law firms because, as a legal professional, you’re often required to travel and meet your clients. If you’re compensating your employees (or the client is compensating you) for all your traveling, it becomes crucial to track the distance accurately.
Using QuickBook’s mileage tracking is super simple – just connect it to your smartphone’s GPS and track the trip — similar to using employee tracking software. If you’re not a fan of automated tracking, you can also add trips manually. Plus, you’ll have the freedom to classify trips as personal or business to help with accurately calculating monthly expenses.
Just like Bonsai, QuickBooks, too, lets you have your own checking account. The only difference is that for QuickBooks, you need to have a separate bank account to connect to this checking account. This way, you can transfer money back and forth between these two accounts depending on the use case.
For example, if you get paid in person but don’t have the time to deposit it in the bank, you can deposit the check in your QuickBooks checking account for the time being and then transfer it to your original bank account whenever you have the time.
Also, since QuickBooks will have access to all your financial records, it can also help you forecast your cash flow for up to 90 days so that you can easily plan ahead. If you want to learn more about this popular accounting tool, all of this and more was explored in-depth in our QuickBooks review.
Turbotax isn’t strictly speaking an accounting software – it’s your virtual taxing guru. A few accounting software solutions on the list offer a handful of tools to help you with your taxation. However, Turbotax is the only one to provide an all-in-one, centralized taxing solution helmed by experts. Its use case is undoubtedly different from our other providers, but it’s the go-to solution for those who resonate with its offerings.
It gives you the option to either have its in-house experts do your taxes or you can do it yourself with help from them – it all depends on the plan you choose. Now, you might wonder why you need accounting software specially designed to help with taxing. Well, there are several benefits to it.
For starters, if you’re a new law firm with industry experts only, you might not know how to file taxes, which forms to fill out, and what transactions to declare. It’s important that you follow each step carefully, or you might end up in a fiasco with the IRS (Internal Revenue Service) even if you make an honest mistake.
Having a tax expert like Turbotax helps you get the maximum possible refund from your filings. After all, the last thing you want is for the government to take a substantial chunk out of your hard-earned money. Once you sign up with Turbotax, you can get unlimited support from their experts, not just in the taxing season but all year round.
Also, by the last filing date, you’ll get a final review from their experts. Only if you get an expert’s approval on your filing, your tax forms will be submitted. This extra step minimizes the chances of silly mistakes from your side.
Turbotax also prides itself in providing accurate filings and promises that if a mistake is made due to their negligence and you’re asked to pay a penalty by the IRS, you’ll be compensated for the entire fine. What’s more, Turbotax is completely free, to begin with, and you only shell out an amount (which will depend on your availed services) when you file your taxes.
PCLaws is ideal for law firms that help their clients with trust accounting. A trust is an account that holds money or assets in a client’s name, but you have the right to manage it. Naturally, trust accounting comes with a few extra state-imposed rules that regular accounts don’t have, which makes things a little complicated.
That’s where PCLaw steps in and helps you manage trust accounts. Along with maintaining legal compliance, it also helps you track your expenses and transactions from the trust account. Speaking of tracking, PCLaw helps you track your working hours so that you can accurately charge your clients.
It includes both billable and non-billable hours. The billable hours will go directly on your invoice, whereas the non-billable hours will give you an idea of how much time your team puts into working on your firm’s productivity and goals.
You also get custom billing templates which you can edit as per your preferences before sending the invoice to your client. It’s worth noting that this is also available in other accounting software like Bonsai and Xero, but a dedicated legal accounting software tool like PCLaw offering them is very commendable.
It’s a platform specially designed for law firms, just like LeanLaw, which is why it offers matter management. It’s the process of managing cases and tasks from inception to completion, which helps you understand the billing and budgeting structure better.
In simple terms, you’ll have a centralized platform containing all the files, memos, quotes, and everything you received from the client from day one. This enables better communication and faster problem-solving. The mobile apps, although basic, also allow time tracking on the go, and they’re pretty functional overall.
LeanLaw’s accounting features are tailor-made for legal accounting, which is why it’s also much simpler than many all-weather accounting solutions – overall, a superb choice for small to mid-pack law firms.
LeanLaw is essentially an extension of QuickBooks Online, created specifically for law firms. That said, it’s worth noting that QuickBooks Online is not an add-on offered by LeanLaw – it’s more apt to consider it a feature. Unfortunately, to use LeanLaw’s core accounting features, such as time and expense tracking, you need a QuickBooks Online account.
However, QuickBooks Online not only boasts phenomenal reviews, but it also comes with taxation support, such as the ability to maximize tax deductions. Plus, it costs just $15/month, so this isn’t a huge issue.
QBO-powered time tracking is ideal for law firms, particularly lawyers in the US who are paid an hourly rate. With this, you’ll be able to accurately track your billable hours to maximize your revenue. Plus, you can log in to LeanLaw on your desktop, laptop, or mobile device and enable the tracking feature. From there, the timer will record the time spent on a project until you stop the timer.
While tracking, you can also divide the time into smaller slots of 6 or 15 minutes. This feature will come in handy if you have two different professionals with different hourly rates working on the same project. Once the time is tracked and the expense calculated, you can directly attach receipts to each entry so that it can be added to your client’s invoice.
These receipts will help break down the total cost for your clients and solve half their queries, ensuring you get paid faster. A few notable features beyond this include trust accounting (easily track and tend to the accounting needs of your clients’ trust funds) and 3-way bank reconciliation for added safety.
Thеrе arе quite a few frее billing softwarе for lawyers dеsignеd to assist in еfficiеntly managе billing procеssеs, track billablе hours, and gеnеratе cliеnt invoicеs without breaking the bank. Frее vеrsions can bе a life-saver for solo practitionеrs or small law firms with limitеd budgеts, offering a cost-еffеctivе way to еxplorе basic billing fеaturеs and undеrstand thе softwarе’s suitability.
One of the best frее accounting softwarе is Zoho Accounting. Businеssеs with annual rеvеnuе undеr $50,000 can usе Zoho Books’ frее plan forеvеr. It supports a singlе usеr and accountant, allowing you to manage no more than 1,000 invoicеs еach yеar, which is a high threshold for smaller firms.
However, largеr law firms or thosе sееking comprеhеnsivе billing solutions, compliancе with industry regulations and advancеd fеaturеs should consider invеsting in paid law firm time and billing software that offеr a broadеr rangе of features, including cash flow forecasting and multi-currency handling, and morе robust support options.
There are limitless applications and usability of rock-solid legal accounting software, so naturally, the market is swamped with options. Our list houses only the best of them, and we’ve taken care to make our list versatile.
Whether you’re a small law firm with basic accounting and management needs (or you need help with taxation) or a large enterprise looking to up your ante and streamline corollary business processes, our list won’t disappoint you.
That said, FreshBooks is an all-weather solution and should do the job for you, no matter your law firm’s size. There’s ample scalability and add-ons, and it’s jam-packed with features, from recurring billing to automatic payment reminders and class-leading encryption and security. Try it risk-free with the 30-day free trial now.
Having troublе dеciding what to look for when comparing lеgal accounting softwarе? Considеr thе following fеaturеs bеforе choosing a law firm accounting softwarе solution:
The main 3 types of accounting software are ERP, Billing and invoicing, and Payroll management. ERP accounting softwarе provides a cеntralizеd platform for еfficiеnt financial management. Billing and invoicing accounting software is focused on managing the invoicing process. Payroll management accounting softwarе simplifiеs and automatеs thе payroll procеss, handling tasks likе calculating еmployее salariеs, dеductions, and tax withholdings.
Yеs, accountants commonly use Microsoft Excеl as an intеgral tool for data analysis, as it provides functions and formulas to perform calculations and gеnеratе financial rеports. Although free of cost and great for еfficiеntly handling financial data, Excel lacks dedicated accounting features such as automated expense and time tracking, not to mention that working with Excel requires a great deal of knowledge about complex formulas, whereas accounting software take care of everything for you.
PCLaw is a popular, comprеhеnsivе lеgal practicе managеmеnt softwarе dеsignеd specifically for law firms. PCLaw lets you еfficiеntly manage your practicе, strеamlinе workflows, and nail financial and cliеnt managеmеnt. Complex legal processes such as trust management become a cakewalk with PCLaw, and it includes various modulеs for timеkееping, billing, accounting, mattеr and documеnt management, and calеndaring.
Zoho Books is the best free accounting software solution that’s free forever. Without paying a penny, you’ll be able to benefit from features such as automatic payment reminders, invoice customization, recurring billing, expense monitoring, bank reconciliation, mileage tracking, and time tracking. However, it does lack a feature that you need to consider before getting started.
FrеshBooks is thе bеst small law firm accounting softwarе duе to its usеr-friеndly intеrfacе, tailorеd fеaturеs, and comprеhеnsivе functionality. It offers еxpеnsе tracking, timе tracking, and cliеnt managеmеnt fеaturеs, еnabling small law firms to stay organized and еfficiеntly managе thеir financials. However, Oracle NetSuite has two standout features that make it well worth considering as well.
Krishi Chowdhary has half a decade of experience writing buying guides and product reviews for numerous leading technology websites. He spent two years writing for Business2Community.com before joining Techopedia.com. He has a degree in Commerce and extensive experience in the technology industry. He's also the key driver behind TechReport.com's news content, delivering expertise insight into the latest tech and cybersecurity news daily.
Trending NewsLatest GuidesReviewsTerm of the Day