From Backlogged to Balanced: How Lawyers Behind on Their Books Can Get Back on Track
- KHJ
- Apr 2
- 4 min read
By: Keith Hill Jr.
If you're a lawyer running a growing practice, your to-do list is likely longer than your client intake form. Between meetings, handling client matters, and managing your business, administrative financial responsibilities can easily fall to the bottom of the pile. Before you know it, months, or even years, have gone by, and now your books are in disarray.
You're not alone. Many solo and small firm lawyers find themselves in this position. The good news? It's fixable.
In this article, you'll find 8 practical tips to help you get back on track – and stay there.
1. Don’t Panic…But Act Now
Avoidance only makes the problem worse. Falling behind can put your practice at risk with the Law Society or the CRA. It also clouds your ability to make informed business decisions. The best time to start fixing it is now, not next month. The longer you delay, the more the work piles up, more deadlines pass, details fade from memory, and penalties grow. Waiting only makes the cleanup more challenging and more expensive.
2. Find The Starting Points
Pinpoint the last time each of your accounts was fully reconciled—operating, trust and credit card; that’s your starting line. The goal is to start from the point where things went off track and move forward chronologically.
3. Get it Together
Before you can fix anything, gather everything. For each account, assemble all relevant documents starting from the point you identified as your last completed reconciliation
This includes:
Monthly statements (bank and credit card)
Invoices issued to clients
Receipts for expenses
Compliance documents (eg. Form 9A’s)
Payroll records
Previous reconciliation reports
Teraview reports (for Real Estate)
Etc.
4. Don't "Go It Alone"
It might seem prudent to do your own bookkeeping, and in some cases, that works. But there comes a point where being too deep in the weeds means you’re stepping over dollars to pick up dimes. If you're more than a few months behind, or if your trust account is involved, it’s wise to bring in a professional legal bookkeeper, even if it’s just to get you back on track.
The rules around client trust funds are strict, and unfulfilled requirements or errors, even unintentional ones, can lead to consequences with the Law Society or the CRA. An experienced legal bookkeeper knows what to look for, how to correct issues, and how to get (and keep!) you audit-ready.
5. Don’t Be the Bottleneck
Your firm’s cleanup can only move as fast as you allow it to. If you’re unavailable to answer questions promptly or slow to provide necessary documents, you’ve become the bottleneck. The last thing you want is to be the source of any delay. Delays at the top cause obstruction down the line. Make it a priority to respond, delegate, or get support.
6. Get Organized While You Catch Up
While going through the catch-up process, assess how your documents are organized. Use this opportunity to start or improve your system, whether digital, physical, or both. Keep in mind that you don’t have to do it all yourself. Here, again, an experienced bookkeeper can help set up an efficient system that also keeps you compliant.
7. Start a Routine
Once you're caught up, protect your peace by building habits and routines. For example:
Review trust balances monthly
Review P&L reports regularly
Ensure trust is reconciled by the 25th of each month
Consider setting a recurring day, like “Money Mondays”, to review or complete essential financial tasks. Choose a schedule that works for you, whether weekly or monthly. Even with a bookkeeper, internal or outsourced, you should (at the very least) familiarize yourself and stay on top of key financial reports. When it comes to your bookkeeping and accounting, don’t just set it and forget it; you’re still the captain of the ship.
8. Keep Your Hand on the Plow
“He who puts his hand to the plough does not look back.”
Once you commit to catching up on your financials, don’t stop until the job is done; every month is reconciled, every trust ledger is accurate, and every report is audit-ready. Don’t look back with regret, look ahead with purpose. Finish the job, and let momentum carry you forward. Momentum and consistency are everything. Stopping or delaying increases your risk of sliding back into the same chaos.
If you need help, reach out to a professional who understands legal bookkeeping as they will know exactly how to move things forward efficiently to get you from backlogged to balanced.
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Keith Hill Jr. is the Principal of Bookkeeping Matters Inc. (BMI), a leading provider of legal bookkeeping services for over a decade. Serving lawyers across Ontario and beyond, BMI has established a reputation for excellence in legal accounting. Drawing on his experience as a former Legal Accounting professor, Keith has also positioned BMI as a premier source of online legal accounting education. Specializing in various practice management software, BMI is dedicated to helping law firms optimize their financial operations.
Contact BMI at info@bookkeepingmatters.ca, 1-800-893-2820 or visit www.BookkeepingMatters.ca.
©2025 Bookkeeping Matters Inc. All rights reserved. Reproduction with credit is permitted.
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