• December 4, 2023
 Know your law firm inside out – with Management Accounts

Know your law firm inside out – with Management Accounts

Law firms, like any other business, rely on accurate and timely financial information to make informed decisions and to manage their operations effectively. Management Accounts provide this information by regularly summarising a company’s financial performance and position. Budgets, cashflow projections and expert advice are crucial to knowing where your law firm is and predicting where you are going.

With the current economic times, it is more important than ever to have access to this data. So why should your firm be using Management Accounts and what are the benefits to you?

Accuracy & transparency

Whilst lawyers have access to their own firm’s finances, this raw data can be difficult to decipher into meaningful information that can be used to support the business. Management Accounts provides you with detailed information on budgets, cashflow projections, performance analysis, and more. Raw data is transformed into easy-to-read visual illustrations that have the power to add value across the entire business. The right and accurate data gives you more control over what is happening in your firm, and the transparency of management accounts gives firms more control, allows for better strategy planning and helps avoid penalties. This information supports organisational growth and stakeholder management. On top of this, transparency is valued by clients, strengthening client relationships and engaging new ones.

Compliance & efficiency

Management accounts helps firms to manage their cashflow more efficiently, by the creation of budgets and forecasts, supporting firms’ growth. As well as budgeting and cashflow, Management Accounts also identifies areas in which firms can improve efficiency and reduce costs.

For example, a firm may realise they are spending too much on office supplies that are not needed as much as new technology to streamline operations.

In law firms, compliance is key. Law firms are required to file financial reports and tax returns on a regular basis. Management Accounts helps to ensure that firms follow all relevant regulations and avoid penalties for non-compliance.

Time saving

Management Accounts provides information to support your firm in improving overall performance. Calculations are made from time spent on clients’ tasks as well as identifying inefficiencies and time-wasting tasks. This in turn helps firms avoid bookkeeping and accounting problems by reducing the risk of overbilling and underbilling clients for work, which not only saves firms time and effort, but contributes to client satisfaction. Management accounts allow firms to be prepared for a range of scenarios which could arise, such as potential financial risks and opportunities, changes in the legal market or fluctuations in demand for certain services. Having predictions through monthly or quarterly management accounting means firms can save time in their response and have clear plans in place before such events happen.

Good management accounting is crucial to the success of a law firm, and it should be done by an expert in legal accounting. Outsourcing Management Accounts to Cashroom allows your firm to focus on what matters – your clients. Not only freeing up time but also allowing your firm’s partners and managers to make strategic and operational decisions based on accurate and reliable data.

At Cashroom we recognise how important this service is and provide our clients with a developed standard reporting package that meets the requirements of the banks’ annual review.

Have a look at our whitepaper to find out more about Cashroom’s management accounts services or talk with our team to find out how we can help your firm.

E: info@thecashroom.co.uk 

P: 01695 550950

This article was submitted to be published by Cashroom as part of their advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills and Probate.

The Cashroom


The Cashroom Ltd exists to deal with the day to day administration of a law firm’s finance function, ensure compliance with the Solicitor’s Accounts Rules, and provide firms with management information and Management Accounts. We provide the time and the information allowing solicitors to focus on their business. The Cashroom provides a specialist accounting service to the legal profession, comprising an outsourced legal cashiering service, and an outsourced management accounting service. We now do this for almost 150 clients in the UK. Our legal cashiering service is delivered remotely by a team of qualified cashiers, working in our offices. We use our client’s own practice management system (there is no need to change system), logging on remotely to run their cash room, as if we were in the room next door. We also provide an outsource management accounting service delivering management accounts and management information to law firms quickly and economically, often to firms who could not afford to employ a full time accountant. More importantly, we work with clients to analyse that information, helping them understand their firm’s finances more clearly. Lawyers are not accountants and employing, supervising and managing a cash room, was a worrying prospect for many solicitors. Our Legal Cashiering Service takes away that worry, running and managing a firm’s cash room, on an outsourced basis, and ensuring compliance with the Accounts Rules. And we usually do it for around two thirds the cost of running an accounts function in house. Few small to medium sized firms produce the management information they need to run their business effectively. Few produce monthly Management Accounts, few have annual budgets, and fewer still track performance against budget on a monthly basis. Our Accountants combine “best practice” from a number of firms to create a finance function, which produces Management Accounts and management information quickly and efficiently. The Cashroom produces annual budgets, monthly management accounts, monthly management information and cash flow projections. More importantly, our Accountants spend time with our clients making sure they understand the information, and what it tells them about their business. And, again, we do it for a fraction of the cost of employing a Finance Director. We also run a full outsourced payroll including auto-enrolment services for firms of all sizes. Key Contacts: If you are regulated within the English and Welsh market then please contact: Alex Holt T: 07817 420 466 E:  alex.holt@thecashroom.co.uk English Office The Cashroom, West Lancashire Investment Centre, White Moss Business Park, Maple View, Skelmersdale , Lancashire, WN8 9TG Tel: 01695 550 950 If you are regulated by the Law Society of Scotland, please contact: Gregor Angus T: 07875 598 593 E: gregor.angus@thecashroom.co.uk. Scottish Office, Livingston The Cashroom, Craglea House, 7 Quarrywood Court, Livingston Village, Livingston, West Lothian. EH54 6AX Tel: 01506 401 270