In this episode, Sherri Mansell, Director of Bookkeeping That Does Not Suck shares reliable and actionable bookkeeping practices that will help law firm owners be more profitable. Sherri shares her passion for numbers and how understanding the story behind the numbers empowers law firm owners to make datadriven decisions.

The Seven Key Monthly Reports

Sherri outlined the seven essential reports every law firm (and small business) owner should examine monthly regardless of their practice area or billing model.

1. Balance Sheet

2. Profit and Loss (P&L) Statement

3. Budget Variance Report

4. Accounts Receivable (A/R) Report

5. Work in Process (WIP) Report

6. Cash Flow Forecasting Report

7. ThreeWay IOLTA Trust Reconciliation

She emphasized the importance of looking at Balance Sheet and P&L Statement on a rolling 12month basis to identify trends and spot areas for improvement. Sherri shared three of the most common questions and stressed the importance of receiving timely reports from your bookkeeper, ideally by the 8th business day of the month and no later than the 20th of the month.

The Consequences of Neglecting Your Numbers

Sherri shares cautionary tales of law firm owners who put off dealing with their finances, leading to stress, panic, and potential loss of their license when faced with a bar audit. She encouraged listeners to schedule a regular time each month to review their numbers.

Key Takeaways

Review the seven key financial reports with your bookkeeper every month
Use detailed charts of accounts to make datadriven business decisions
Breakdown payroll expenses by department for accurate labor ratio analysis
Address any IOLTA discrepancies within 30 days to remain compliant with your state bar
Links Mentioned

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Ep 36 Take Flight: Elevate Your Mindset
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Key Moments
1:06 Welcome
1:45 The Difference Between Successful & Unsuccessful Law Firms
3:57 Speaking "Bookkeeperese" with Sherri Mansell, Director of Bookkeeping That Does Not Suck
6:32 A Different Approach to Bookkeeping
8:27 The AHA! Moments
9:45 Speaking The Same Language aka Financial Literacy
11:26 7 Key Monthly Reports
14:45 Rubber Band Policy
16:34 The Same 7 Reports No Matter Your Practice Area
20:44 Profit First For Lawyers Workshop https://htm.live/workshop
21:43 Three FAQs
25:48 Have "The Talk" With Your Bookkeeper
27:15 Getting Serious With Your Numbers
30:17 It's Not Too Late...Get Started Now
32:25 Recap of the 7 Key Monthly Reports
33:30 Practical Advice
35:32 Hear Real Client Calls With Bookkeepers https://profitfirstforlawyers.com/action'>https://profitfirstforlawyers.com/action
36:05 Close Out