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Financial management
Financial management and trust accounting for small law firms
Manage accounting, trust funds, billing, and financial reporting in one system connected to your matters and operations.
Financial management
Financial management built for law firms
Financial management in law firms is often handled separately from practice management. Billing is managed in one system, accounting in another, and trust accounting in yet another. This separation creates inefficiencies, reconciliation effort, and limited visibility into financial performance.
This legal accounting software for small firms includes full financial management as a core capability, not an afterthought. Because it is built on Microsoft Dynamics 365 Business Central, you have access to a complete accounting platform where financial data flows directly from matters and billing into accounting, eliminating manual processes and improving accuracy. This allows firms to manage financial operations, compliance, and reporting in one system.
Accounting functions
A complete small law firm accounting system
The financial management capability covers the full range of accounting functions a law firm requires:
General ledger
Maintain a complete chart of accounts with full transaction history.
Accounts receivable
Track outstanding invoices, manage payment terms, and chase overdue balances.
Cash management
Manage bank accounts, reconcile transactions, and maintain accurate cash positions.
Expense management
Record and track firm expenses and billable disbursements.
Financial period management
Close periods, produce management accounts, and prepare for external reporting.
Budgeting and forecasting
Set annual budgets, track actuals, and project future financial performance.
Budgeting and forecasting
Set annual budgets, track actuals, and project future financial performance.
Trust accounting
Trust accounting software for small law firms
Trust accounting is one of the most regulated areas of legal practice. The system allows firms to manage client funds with full transparency and control, ensuring compliance with regulatory requirements. Trust transactions are linked to matters, providing clear visibility into how funds are held and used.
- Client funds are held in segregated trust accounts, clearly separate from the firm's own operating accounts.
- Every deposit, withdrawal, and transfer is recorded against the relevant client and matter.
- Automated reconciliation flags any discrepancies between trust account balances and client ledgers.
- A full audit trail is maintained for every trust transaction – who approved it, when it was processed, and what it related to.
- Trust accounting reports can be produced on demand for compliance reporting and external audits.
Financial dimensions
Financial dimensions for deeper reporting
One of the most powerful capabilities of Business Central is its financial dimensions framework. Firms can analyze revenue, costs, and profitability across multiple dimensions simultaneously, without maintaining separate records or building custom reports.
Analyze financial performance by practice area, partner, department, or office.
Apply dimensions consistently across all financial and operational data.
Produce multidimensional reports without duplicating data.
Connect dimension data to Power BI for advanced budget-versus-actuals analysis by partner, practice area, or cost centre.
This allows firms to understand profitability drivers beyond basic client-level reporting, and gives partners clear visibility into their own portfolio without waiting for manually assembled reports.
Multi-entity
Multi-entity and multi-office support
For firms that operate across more than one office, jurisdiction, or legal entity, Business Central supports multi-entity configurations. This enables centralized financial management and reporting while preserving local operational autonomy.
Multiple legal entities and intercompany scenarios
Support for multiple legal entities and intercompany scenarios.
Consistent financial processes across offices
Consistent financial processes across offices without losing regional flexibility.
Centralized finance with local operational control
Centralized finance with local operational control.
Designed for firm growth
Supports firm growth, mergers, and new office launches without requiring a platform change.
Collections
Collections and credit control
Business Central includes mature accounts receivable and collections functionality, giving firms structured visibility of outstanding invoices and overdue balances.
- View customer balances and ageing across all clients.
- Collections-focused views of overdue invoices by age, client, and value.
- Automated payment reminders for outstanding balances.
- Customer account statements available on demand.
- Clear visibility of open, disputed, and overdue invoices to prioritise collection activity.
Financial planning
Financial planning at matter and firm level
The solution supports financial planning at both the matter level and the firm level:
Set budgets per matter and compare against recorded time and costs in real time.
Monitor work-in-progress and billed-but-unpaid revenue against cash flow projections.
Produce firm-level budget vs actuals reports by practice area, partner, or cost centre.
Use forecasting tools to model different revenue and cost scenarios.
Solution overview
What the solution includes
General Ledger
Full chart of accounts, journal entries, period management, and financial statements.
Trust accounting
Segregated client funds, automated reconciliation, full audit trails, and compliance reporting.
Accounts receivable
Invoice tracking, payment recording, aged debtor reports, and automated reminders.
Bank reconciliation
Match bank transactions to general ledger entries with automated matching suggestions.
Matter-level budgets
Set and monitor time and cost budgets at the matter level with real-time variance tracking.
Financial reporting
Profit and loss, balance sheet, cash flow, and management accounts available out of the box.
Financial dimensions
Analyze revenue and costs by partner, practice area, department, or office without duplicating data.
Collections and credit control
Structured collections views, payment reminders, and aged debtor management.
Why it matters
Benefits for small law firms
For small law firms managing both practice operations and client funds, having financial management software that connects matters, billing, and accounting in one place removes a significant administrative burden.
Eliminate the need for a separate accounting system; billing and financials are in the same platform.
Meet trust accounting compliance requirements without specialist add-on tools.
Give partners real-time visibility into firm finances without waiting for month-end reports.
Reduce the time your accounts team spends on manual reconciliation and data re-entry.
Analyze profitability by partner, practice area, or office using financial dimensions, without manual report building.
Manage multi-entity structures from a single platform as the firm grows.
FAQs
Does the system handle multiple bank accounts, including trust accounts?
Yes. You can manage multiple bank accounts within the system including one or more trust accounts with separate reconciliation and reporting for each.
How are trust account withdrawals controlled?
Trust account withdrawals require an authorized matter record and are subject to configurable approval rules. Every transaction is logged with user identity, date, and approval status.
Can we produce management accounts from the system?
Yes. Standard management accounts such as profit and loss, balance sheet, and cash flow can be produced from the system. These can be filtered by practice area, partner, or period.
Is this system suitable for a firm with a dedicated bookkeeper rather than a full finance team?
Yes. This legal accounting software is designed to be used by a small finance function. Automated processes such as invoice posting, bank reconciliation suggestions, and trust reconciliation reduce manual workload significantly.
Does this replace a separate accounting system entirely?
For most small law firms, yes. Unlike standalone practice management tools that require a separate accounting package, this solution includes a full general ledger, accounts receivable, trust accounting, and financial reporting built in. This accounting software covers both legal operations and financial management in one system removing the need to reconcile data between platforms.
Does the system support firms with more than one office or legal entity?
Yes. Business Central supports multi-entity configurations and intercompany scenarios, making it suitable for firms operating across multiple offices, jurisdictions, or legal structures.